Why Paytm share price surged over 6% despite regulatory concerns

Paytm shares rose over 6% after One 97 Communications reported a Q4 profit and its first annual profit. The results signalled improving payments growth and margins even as regulatory concerns remained in focus.

In Short

• One 97 Communications shares rose 6.06% after first full-year profit
• Q4 net profit Rs 184 crore vs loss last year; FY26 PAT Rs 552 crore
• Quarterly revenue rose 18.4% while EBITDA turned positive with a 5% margin

Shares of Paytm parent One 97 Communications surged over 6% in early trade on Thursday after the company reported a sharp turnaround in profitability and posted its first-ever full-year profit.

The stock rose 6.06% to Rs 1,177.55 in morning trade. Over the past one year, the stock has gained more than 34%, outperforming the benchmark Nifty 50 index.

The rally comes after the company reported strong March quarter earnings and a return to profitability despite regulatory challenges linked to Paytm Payments Bank.

PAYTM POSTS Q4 PROFIT

Paytm posted a net profit of Rs 184 crore in Q4 FY26, compared to a loss of Rs 540 crore in the same period last year.

The company also reported its first-ever annual profit, with profit after tax (PAT) of Rs 552 crore for FY26.

Revenue for the quarter rose 18.4% year-on-year to Rs 2,264 crore.

Meanwhile, EBITDA turned positive at Rs 132 crore against a loss of Rs 88 crore a year earlier. EBITDA margin stood at 5%, helped by operating leverage and cost discipline, the report said.

STRONG GROWTH IN PAYMENTS AND LENDING

Investor sentiment was also supported by continued growth in Paytm’s payments and lending businesses.

Consumer UPI gross transaction value rose 46% year-on-year during the quarter, while monthly transacting users increased to 7.7 crore.

Revenue from financial services climbed 37% to Rs 750 crore, while payment services revenue stood at Rs 1,265 crore.

The company’s contribution profit rose to Rs 1,254 crore, with contribution margin improving to 55%, reflecting better operating efficiency and scaling benefits.

REGULATORY ISSUES STILL IN FOCUS

The strong earnings come at a time when Paytm is trying to stabilise its business after regulatory action against Paytm Payments Bank disrupted parts of its ecosystem last year.

The company has since shifted to a partner-led model for payments and UPI operations.

Despite the regulatory overhang, investors appeared encouraged by the company’s improving profitability, revenue growth and operational performance.

WHY INVESTORS ARE CHEERING THE RESULTS

Analysts and investors are closely watching whether Paytm can maintain profitability after years of losses.

The latest results indicate:

• improving operating performance
• growth in core payments business
• stronger lending revenue
• better margins
• and improving user activity.

The company’s return to annual profitability is being viewed as a key milestone for the fintech major.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)

- Ends