Paytm Reports 10-Fold Profit Surge to ₹225 Crore in Q2 FY27

Paytm's parent company, One 97 Communications Ltd, announced a remarkable increase in its net profit for the second quarter of fiscal year 2027. The company posted a profit after tax of ₹225 crore, over ten times higher than the ₹21 crore recorded in the same quarter last year. This marks the sixth straight quarter of profitability for the firm.

Operating revenue also saw strong growth, rising 28 percent year-on-year to ₹2,648 crore. This increase was fueled by steady progress across both merchant and consumer segments, alongside enhanced monetisation strategies and the integration of artificial intelligence (AI) technologies.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) climbed 90 percent year-on-year, reaching a record ₹270 crore. The EBITDA margin expanded to 10 percent, hitting double digits for the first time and reflecting improved operational efficiency. For the first half of FY27, net profit more than tripled to ₹445 crore, compared to ₹144 crore in the previous year.

When excluding the Payments Infrastructure Development Fund (PIDF) incentives that Paytm receives until December 2025, the underlying growth metrics appear even more robust. Operating revenue grew 33 percent year-on-year on a comparable basis, while EBITDA nearly quadrupled. The EBITDA margin widened significantly from 3 percent to 10 percent.

Paytm continued to strengthen its position in the consumer UPI payment market, gaining market share for the sixth consecutive quarter. The value of Paytm UPI transactions expanded by 42 percent during the quarter, more than twice the industry average growth rate of 19 percent. Monthly active transacting users increased by 10 million year-on-year to reach 85 million, the largest user addition in nearly three years. This growth was attributed to product improvements, better user acquisition and retention, and AI-driven personalisation efforts.

The company’s payment services revenue grew 25 percent year-on-year to ₹1,434 crore, while net payment revenue rose 21 percent on a comparable basis, reaching ₹644 crore. This growth was supported by a structural enhancement in payment processing margins, which now comfortably exceed 4 basis points. The improvement was driven by increased volumes of higher-margin payment instruments such as credit cards on UPI and Paytm Postpaid, alongside market share gains.

Merchant subscription plans also saw growth, with an increase of 2.7 million merchants year-on-year, totaling 16.4 million merchants on subscription. Paytm noted that strong merchant retention, payment revenues, and loan distribution contributed to higher revenue per merchant.

The financial services distribution segment experienced a 49 percent year-on-year increase in revenue, reaching ₹912 crore. This was propelled by rapid growth in merchant loan distribution, personal loans, Paytm Postpaid, and enhanced monetisation of Margin Trade Funding (MTF) and Paytm Gold. More than half of merchant loan disbursements were to repeat borrowers, and the number of key financial services customers rose 35 percent year-on-year to 880,000.

AI technology is playing a growing role in Paytm’s operations. The company has implemented sophisticated AI models and agents across consumer and merchant services, engineering workflows, risk management, collections, fraud detection, and personalisation. These AI-driven efficiencies helped reduce indirect expenses relative to revenue from 52 percent last year to 46 percent this quarter. Additionally, Paytm has started offering its AI platform to enterprise merchants.

In its earnings release, Paytm highlighted the large addressable market and accelerating revenue growth supported by AI-enhanced operating leverage. The company expects these factors to contribute to sustained revenue increases and margin improvements, fueling long-term profit growth.

Cash reserves stood at ₹13,617 crore as of September 2026, providing ample flexibility for future business expansion initiatives.