Paytm Shares Fall 1% Despite 1st Ever Quarterly Profit To Rs 123 Cr In Q1FY26

Last Updated:July 23, 2025, 09:43 IST

Paytm shares will be in focus after fintech reported its first-ever quarterly profit of Rs 123 crore in Q1 FY2025-26, driven by AI and higher income.

Paytm Share Price: Paytm shares fell into the red territory in the morning session on Wednesday despite having a turnaround story of swinging back into profit of Rs 123 crore in Q1FY26 against Rs 840 crore loss in the same quarter last year. The scrip slid 1 per cent after having a green start at Rs 1081.40 apiece compared to the previous close of Rs 1,051.05 apiece.

At 9:35 am, shares were trading at Rs 1039 with a fall of 1.14 per cent.

Paytm on Tuesday reported a net profit of Rs 123 crore for the first quarter of the financial year 2025-26, compared to a loss of Rs 840 crore a year ago. It is driven by AI-led operating leverage, disciplined cost structure and higher other income, said the company.

The fintech major’s operating revenue rose 28% year-on-year to Rs 1,918 crore during the quarter ended June 30, 2025.

The company’s contribution profit stood at Rs 1,151 crore, up 52% YoY, with a contribution margin of 60%. This growth was led by improved net payment revenues, a stronger financial services portfolio, and reduced direct expenses. Paytm also reported a positive EBITDA of Rs 72 crore — a margin of 4% — indicating early signs of sustainable profitability.

The company said its net payment revenue was up 38 per cent to Rs 529 crore, led by growth in high-quality subscription merchants and an increase in payment processing margins.

Distribution of financial services revenue increased by 100% YoY to Rs 561 Cr, driven by growth in merchant loans, trail revenue from DLG portfolio, and improved collection performance.

As of June 2025, Paytm had 1.30 crore subscription-based merchants. The company sees a long-term potential of catering to 10 crore merchants, out of which 40–50% are expected to subscribe to its services.

Paytm Share Price Target 2025

JM Financial in its report has given ‘BUY’ rating to One97 Communications (Paytm), stating that it is expecting a very sharp ramp-up in Paytm’s profitability to reach Rs 14.5 billion in PAT in FY27. The brokerage sets the target at Rs 1320 apiece.

“We find Paytm attractively positioned considering the robust operating performance along with multiple growth optionalities such as MDR on UPI and return of Paytm wallet. We reiterate BUY with Jun’26 TP of INR 1,320, valuing Paytm at 40x Jun’27 Adj. EBITDA multiple,” the brokerage added.

Jefferies has upgraded Paytm to ‘BUY’ from its earlier rating of ‘HOLD’ following the robust quarterly earnings. The brokerage has raised the target price on Paytm to Rs 1250 from earlier Rs 900.

Jefferies believes that while the Monthly Transacting Users (MTU) and Gross Merchandise Value (GMV) growth on a sequential basis is encouraging, but contributing margins will stabilise a little lower over the next two to three quarters.

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Varun Yadav

Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More

Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More

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