Paytm Q2FY27 net profit jumps 10-fold to ₹225 crore, revenue up 28 %

Fintech company Paytm announced a remarkable 976% year-over-year increase in its consolidated net profit for Q2 FY27, reaching Rs 226 crore. This marked a sharp contrast to the previous quarter's profit of Rs 21 crore. Revenue from operations also surged 28% YoY to Rs 2,648 crore. However, profits rose only 3% sequentially from Rs 220 crore.

The significant profit boost was attributed to a lower exceptional charge, with Paytm recording Rs 4 crore less in exceptional expenses compared to the same period last year. Profit before exceptional items rose 9% to Rs 229 crore, while EBITDA increased 90% to Rs 270 crore, marking a 10% improvement in EBITDA margin from 7% YoY.

Paytm credited its expanding merchant network, financial services distribution, and AI adoption for the profit surge. Financial services, particularly the distribution of loans, emerged as a key growth driver, with revenue from this sector rising 49% YoY to Rs 912 crore. Merchant loan disbursements grew 35% to 8.8 lakh, with repeat borrowers contributing more than half of the disbursements.

Paytm's consumer lending operations, including personal loans and Paytm Postpaid, also showed improvement. The company expects EBITDA to continue improving despite higher upfront expenses from growth in loan distribution. In the payments business, revenue from services increased 25% YoY to Rs 1,434 crore, driven by a 26% rise in gross merchandise value to Rs 7.1 lakh crore.

Merchant numbers grew to 1.64 crore from 1.37 crore, marking a 27 lakh increase. Net payment revenue rose 8% to Rs 644 crore, with payment processing margin remaining above four basis points. Paytm also reported its sixth consecutive quarter of market share gains in consumer payments, with UPI gross transaction value growing 42%, outpacing industry growth of 19%.

The proposed merchant discount rate on certain UPI transactions could further boost Paytm's payment processing margin by around 2.5 basis points.