Paytm Q2 Results
Paytm reported a steep 98% year-on-year decline in consolidated net profit for Q2FY26, with revenue at Rs 21 crore compared to Rs 928 crore in the same period a year ago. The profit decline was caused by a one-time impairment charge of Rs 190 crore related to the First Games Technology joint venture. Excluding this, profit after tax (PAT) stood at Rs 211 crore.Despite the profit decline, operating performance remained strong.
Operating revenue rose 24% year-on-year to Rs 2,061 crore, supported by merchants with higher subscriptions, higher payments GMV and growth in financial services distribution.
Contribution profit grew 35% year-on-year to Rs 1,207 crore, with contribution margin improving by 5 percentage points to 59%, helped by higher net payment income and lower DLG costs. Net payments revenue rose 28% y-o-y to Rs 594 crore, while financial services distribution revenue rose 63% y-o-y to Rs 611 crore, led by trade loan distribution. improvements and integration of AI features. It outlined four key focus areas: strengthening merchant leadership (online and offline), expanding full-stack offerings (payment gateway, QR, Soundbox and All-in-One POS) and scaling credit and financial services.
Citi maintains target of Rs 1,500
Citi reiterated its buy rating with a target price of Rs 1,500, citing strong growth momentum in UPI credits (including RuPay and Postpaid), which drove over 4 bps improvement in net payment margins in the second quarter. The brokerage raised FY26-28 margin estimates to around 4.2 basis points and highlighted improved unit economics due to lower equipment costs.
Citi also increased FY26/27/28 EBITDA forecasts by 33%, 19% and 13% respectively. It noted that Paytm exceeded expectations on EBITDA (Rs 180 crore) and EBIT (Rs 40 crore) in the second quarter, supported by lower D&A costs. The brokerage pointed to robust growth prospects in payment aggregation, UPI credit and equity brokerage.
MSCI inclusion
As part of its November 2025 half-year review, MSCI announced a realignment of its Indian indices. One of the key changes is the inclusion of FSN E-Commerce Ventures (Nykaa) and One 97 Communications (Paytm) in the MSCI India Standard Index, reflecting the changing market capitalization dynamics.
As of market close on November 24, MSCI added six stocks to the India Domestic Index and removed three. New additions to the Standard Index include:
– Fortis Healthcare
– FSN E-Commerce Ventures (Nykaa)
– GE Vernova T&D India
– Indian bank
– One 97 communication (Paytm)
– Siemens Energy India
(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times)
#Paytm #shares #early #trade #weak #secondquarter #results #reasons