Paytm Q1 profit surges 79% on payment growth, no bonus shares
Paytm parent One97 Communications posted a 79% jump in first-quarter profit as accelerating payment volumes drove a sharp margin expansion, though the board shelved a bonus share issue to prioritise growth capital.
One97 Communications reported net profit of ₹220 crore for the quarter ended June, up 79% from a year earlier, as revenue climbed 28% to ₹2,448 crore. The results, released after market hours, highlight a continued shift toward sustainable profitability for the Paytm parent. Sequentially, revenue grew 8% from the March quarter, indicating sustained momentum rather than a seasonal spike.
The top-line acceleration was primarily driven by the core Payment Services segment, where revenue rose 33% year-on-year to ₹1,384 crore. Underpinning this growth, gross merchandise value (GMV) accelerated to 31% year-on-year, up from 27% in the preceding quarter and 24% in the quarter before that. The company attributed the pickup to continued investments in products and merchant distribution, specifically noting the deployment of 2.7 million Soundboxes over the past year.
Management also pointed to strong momentum in the online merchant business following the receipt of its online Payment Aggregator licence last year. High merchant retention and improving payment processing revenue are driving better payback periods on these hardware deployments. Meanwhile, marketing services revenue remained largely stable at ₹239 crore.
High-margin financial products provided a further boost to the bottom line. Revenue from the distribution of financial services surged 45% to ₹814 crore, driven by robust traction in merchant loans and personal loans. This mix shift toward lucrative businesses, combined with cost efficiencies as revenue outpaced operating expenses, pushed reported EBITDA up 182% to ₹203 crore.
The EBITDA margin expanded sharply from 4% to 8%. On a comparable basis excluding government incentives, EBITDA still surged to ₹195 crore from ₹18 crore a year ago. Adjusted net profit followed a similar trajectory, jumping 207% to ₹212 crore.
Despite the robust earnings, the board decided against proceeding with a proposed bonus share issue. Management stated that prioritising business growth and compounding profitability remains in the best interest of shareholders. For investors, the decision signals a deliberate choice to retain capital for expansion rather than deploy it for cosmetic equity returns, underscoring confidence in the ongoing monetisation of its payment ecosystem.
