Paytm slips as board shelves bonus issue despite strong Q1 earnings

One 97 Communications (Paytm) fell 1.94% to Rs 1,321.40 after the company's board decided not to proceed with a proposed bonus issue, despite reporting strong Q1 FY27 earnings.

The board said it had evaluated the proposed bonus issue from the perspective of long-term shareholder value and, after due deliberation, decided not to proceed with it at this stage. The company said it will continue to focus on compounding growth and profitability to create long-term shareholder value.

The digital payments and financial services company reported a consolidated net profit of Rs 220 crore in Q1 FY27, up 78.86% YoY and 20.22% QoQ.

Revenue from operations rose 27.63% YoY and 8.13% QoQ to Rs 2,448 crore in the quarter ended 30 June 2026.

Profit before tax stood at Rs 220 crore in Q1 FY27, up 58.27% YoY and 35.80% QoQ.

EBITDA surged 181.94% YoY and 53.79% QoQ to Rs 203 crore, while EBITDA margin expanded to 8% from 4% in Q1 FY26 and 6% in Q4 FY26.

On the cost front, total direct expenses increased 43% YoY and 8.71% QoQ to Rs 1,098 crore, led by a 37% YoY increase in payment processing charges to Rs 794 crore and a 143% YoY rise in promotional cashback and incentives to Rs 90 crore. Indirect expenses rose 6% YoY to Rs 1,147 crore. Employee costs increased 15% YoY to Rs 742 crore, while marketing expenses rose 27% YoY to Rs 79 crore. Software, cloud and data centre expenses declined 5% YoY to Rs 159 crore. Finance costs increased 75% YoY to Rs 7 crore, while depreciation and amortisation expenses fell 21% YoY to Rs 131 crore.

Payment Services revenue increased 33% YoY to Rs 1,384 crore, while Distribution of Financial Services revenue rose 45% YoY to Rs 814 crore. Marketing Services revenue declined 3% YoY to Rs 239 crore.

Operationally, gross merchandise value (GMV) increased 31% YoY to Rs 7.1 lakh crore. Merchant transactions rose 28% YoY to 1,669 crore, while total transactions increased 36% YoY to 1,989 crore. The number of registered merchants grew 12% YoY to 5 crore, subscription merchants increased 21% YoY to 1.57 crore, and key financial services customers rose 34% YoY to 7.6 lakh. The average number of sales employees increased 12% YoY to 43,715.

Looking ahead, the company said AI-led operating leverage, accelerating revenue growth and expanding EBITDA margins position it for long-term sustainable profit growth. It reiterated that it has better visibility to achieve its previously indicated 15-20% EBITDA margin over the next two to three years, supported by faster top-line growth and AI-driven efficiencies.

One 97 Communications operates Paytm, a digital payments and financial services platform offering merchant payments, financial services distribution, lending, insurance and wealth management products.

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