Paytm Q1 profit jumps 79 per cent as payments business powers growth

MUMBAI: Paytm’s growth story found its rhythm at the checkout counter, even as its advertising engine missed a beat. The fintech major delivered a strong first quarter for FY27, with its high-margin payments services business driving revenue and profit growth, while its marketing services segment continued to face headwinds despite higher customer acquisition spending.

Revenue from payment services rose 33 per cent year-on-year to Rs 1,384 crore during the April-June quarter, up from Rs 1,044 crore a year earlier, reinforcing the company’s growing dependence on its core payments franchise.

In contrast, marketing services revenue slipped 3 per cent to Rs 239 crore, compared with Rs 246 crore in the corresponding quarter last year, highlighting softer demand in the segment.

Despite the slowdown, Paytm increased its investment in customer acquisition and retention. Marketing expenses climbed 27 per cent year-on-year to Rs 79 crore, from Rs 62 crore a year ago.

The company said the higher marketing and promotional spending was already yielding results through improved customer retention and continued market share gains, indicating that the investments were beginning to generate returns.

Overall, the quarter reflected strong operational momentum. Operating revenue increased 31 per cent year-on-year to Rs 2,440 crore, while EBITDA surged 182 per cent to Rs 203 crore, compared with Rs 72 crore in the same period last year. Net profit rose 79 per cent to Rs 220 crore, up from Rs 123 crore a year earlier.

The company, however, reported lower other income, which declined to Rs 182 crore. Paytm attributed the fall to reduced returns on the reinvestment of maturing investments following the cumulative 125-basis-point repo rate cuts over the past year. It expects other income to remain broadly stable through the rest of FY27.

Paytm ended the quarter with a cash balance of Rs 13,529 crore, an increase of Rs 657 crore from a year earlier, giving it considerable financial flexibility to pursue future growth initiatives.

The company said it remains well-capitalised and is evaluating both organic and inorganic growth opportunities, while seeing encouraging early traction in areas such as margin trading funding (MTF). At the same time, it stressed that capital deployment would remain disciplined, with investments being made only where they offer attractive long-term returns.

The quarter underlines Paytm’s evolving business mix. While its payments franchise continues to gather momentum and bolster profitability, the company is balancing growth investments with prudent capital allocation as it looks to strengthen its position in India’s increasingly competitive fintech landscape.