Mumbai: Shares of One 97 Communications, which operates Paytm, surged over 6 per cent in early trade on Thursday after the company reported a sharp turnaround in profitability, including its first-ever full-year profit.
The stock rose 6.06 per cent to ₹1,177.55 during morning trade, extending its strong performance. Over the past year, the stock has gained more than 34 per cent, outperforming the benchmark Nifty 50.
The rally follows robust March quarter earnings, signalling improving business fundamentals despite ongoing regulatory challenges.
Paytm posts strong Q4 and annual profit
One of the key triggers for the stock surge was the company’s return to profitability. One 97 Communications reported a net profit of ₹184 crore in the fourth quarter of FY26, compared to a loss of ₹540 crore in the same period last year.
For the full financial year FY26, the company posted its first-ever annual profit, with profit after tax (PAT) of ₹552 crore.
Revenue for the March quarter rose 18.4 per cent year-on-year to ₹2,264 crore, reflecting steady growth across its business segments.
Operational performance also improved significantly. EBITDA turned positive at ₹132 crore, compared to a loss of ₹88 crore a year ago. The EBITDA margin stood at 5 per cent, driven by operating leverage and disciplined cost management.
Payments and lending drive growth
Investor confidence was further boosted by strong growth in Paytm’s core business segments, particularly payments and financial services.
Consumer UPI gross transaction value increased 46 per cent year-on-year during the quarter, indicating robust user engagement. Monthly transacting users rose to 7.7 crore, underlining the platform’s expanding user base.
Revenue from financial services grew 37 per cent to ₹750 crore, while payment services revenue stood at ₹1,265 crore.
The company’s contribution profit rose to ₹1,254 crore, with contribution margins improving to 55 per cent. This reflects enhanced operational efficiency and the benefits of scaling its business model.
Regulatory concerns remain
The strong earnings come against the backdrop of regulatory challenges faced by Paytm Payments Bank, which had disrupted parts of Paytm’s ecosystem in the previous year.
In response, the company transitioned to a partner-led model for payments and UPI services. While regulatory risks remain a key factor to watch, the latest results suggest that Paytm has managed to stabilise its operations.
Why investors are optimistic
The market reaction indicates growing investor confidence in Paytm’s long-term prospects. Analysts highlight several key positives from the results:
- Sustained improvement in operating performance
- Strong growth in payments business
- Expansion in high-margin lending segment
- Improved profitability and margins
- Rising user engagement and transaction volumes
The company’s return to annual profitability is being viewed as a major milestone, especially after years of losses following its public listing.
Market outlook
Going forward, investors will closely monitor whether Paytm can sustain its profitability trajectory while navigating regulatory challenges. The company’s ability to maintain growth in payments and lending, along with cost discipline, will be critical.
Conclusion
The sharp rise in One 97 Communications shares reflects renewed investor confidence driven by strong financial performance and a return to profitability. While regulatory concerns persist, the latest results position Paytm on a firmer footing as it aims for sustained growth in India’s competitive fintech space.
