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Why it matters
Paytm's results show how its business has shifted towards arranging loans for banks and finance companies. For merchants and users, the company says it does not need a fee on UPI payments to stay profitable, while it expects higher loan guarantee costs in the festive quarter.
Paytm’s parent, One 97 Communications, reported a net profit of ₹225 crore for July to September 2026, up from ₹21 crore a year earlier. Revenue from operations rose 28% to ₹2,648 crore, according to the company’s Paytm Q2 results release of 26 October 2026. The quarter is the second (Q2) of the 2026-27 financial year.
That headline Paytm profit jump looks bigger than the business change behind it. Most of the gap comes from a one-off charge a year ago, as the company’s own numbers show.
Paytm Q2 results: why the profit looks 10 times bigger
Some reports said Paytm profit rose more than tenfold; others said it rose 9%. Both are right, because they measure different lines in the same table. In the July to September quarter of 2025, Paytm booked ₹190 crore of exceptional items, one-off costs outside normal business, which cut that quarter’s profit to ₹21 crore. This year, exceptional items were only ₹4 crore.
| ₹ crore | Jul to Sep 2025 | Jul to Sep 2026 | Change |
|---|---|---|---|
| Profit before exceptional items | 211 | 229 | +9% |
| Exceptional items | (190) | (4) | |
| Net profit (after tax) | 21 | 225 | about 10.7 times |
| EBITDA (operating profit) | 142 | 270 | +90% |
The underlying business still grew. EBITDA, earnings before interest, tax, depreciation and amortisation, nearly doubled to ₹270 crore, and the EBITDA margin rose from 7% to 10% of revenue. Two items held back the profit line: tax went up to ₹67 crore from ₹10 crore, and other income, earned outside the main business, fell to ₹182 crore from ₹222 crore.
Compared with the previous quarter, April to June 2026, Paytm profit rose from ₹220 crore to ₹225 crore. For the first half of the financial year, One 97 Communications earned a profit of ₹445 crore against ₹144 crore a year earlier.
Where Paytm’s ₹2,648 crore revenue came from
Payments still bring in the most money, but lending distribution is growing fastest. Paytm does not lend from its own books; it arranges loans that banks and finance companies give, and earns fees for that.
- Payment services: ₹1,434 crore, up 25%, about 54% of revenue by NewsPlainly’s calculation.
- Distribution of financial services (mainly loans): ₹912 crore, up 49%, about 34% of revenue.
- Marketing services (ads and similar): ₹287 crore, up 26%.
- Other operating revenue: ₹15 crore, down from ₹77 crore.
That last fall in the Paytm Q2 results is almost entirely an incentive that has wound down. Paytm received incentives under the Payments Infrastructure Development Fund (PIDF) until December 2025, the release says: ₹74 crore in the quarter a year ago and ₹12 crore this quarter, a drop of ₹62 crore, the same as the fall in other operating revenue. Leaving PIDF out on both sides, revenue grew 33%, the company said.
Paytm users, merchants and fees on UPI
Paytm said 8.5 crore people used the app for a transaction each month on average, 1 crore more than a year earlier. It has 5.2 crore registered merchants, and 1.64 crore of them pay a subscription for devices such as its Soundbox speaker. Merchant payments handled, or GMV (gross merchandise value), rose 26% to ₹7.1 lakh crore in the quarter.
| Measure | Jul to Sep 2025 | Jul to Sep 2026 |
|---|---|---|
| Monthly transacting users (average) | 7.5 crore | 8.5 crore |
| Registered merchants | 4.7 crore | 5.2 crore |
| Merchants paying for devices | 1.37 crore | 1.64 crore |
| Total transactions in the quarter | 1,658 crore | 2,156 crore |
| Average sales staff | 44,154 | 51,832 |
The Paytm profit growth came while the company added sales staff: its average sales team grew by about 7,700 people in a year, by NewsPlainly’s calculation from the table above, and sales and service staff costs rose 25% to ₹370 crore.
The release also spoke about the merchant discount rate (MDR), a fee merchants pay on payments they receive. Paytm said it does not depend on any UPI MDR for profitable growth and that such a fee would only be an upside if it came. The release does not say whether any such fee is planned.
What Paytm says comes next for its profit
The company flagged one cost that will rise. Paytm has resumed a default loss guarantee (DLG) with its largest lending partner, under which it covers part of the losses if borrowers do not repay. It books the whole DLG cost upfront, and said these costs “will increase materially” from the October to December quarter of 2026, while the extra revenue from such loans comes in over later periods.
Paytm also said industry payment volumes slowed compared with April to June because the festive season falls in October to December this year; its own merchant GMV was flat at ₹7.1 lakh crore between the two quarters. NewsPlainly’s report on Ather Energy’s results covers another company from the same results season.
These Paytm Q2 results are the company’s own unaudited figures and statements. The numbers come from its earnings release; outlooks in it are Paytm’s expectations, not forecasts by NewsPlainly.
Frequently asked questions
What was Paytm's Q2 FY27 profit?
Paytm reported a net profit of ₹225 crore for July to September 2026, against ₹21 crore a year earlier. Profit before exceptional items was ₹229 crore, up 9%.
Why did Paytm's profit rise more than 10 times?
A year earlier Paytm booked ₹190 crore of exceptional items, which cut profit to ₹21 crore. This quarter exceptional items were ₹4 crore.
How much revenue did Paytm earn in Q2?
Revenue from operations was ₹2,648 crore, up 28% from ₹2,061 crore. Excluding a government incentive that ended in December 2025, it grew 33%, Paytm said.