Paytm Q1 Results Preview: Co seen swinging to profit on healthy revenue growth

Fintech major Paytm is expected to report a turnaround in profitability in the first quarter of FY26, with analysts projecting a profit after tax (PAT) of over Rs 18.9 crore, compared to a net loss in the same quarter last year.

Revenue from operations is seen rising 27% year-on-year, driven by resilient performance in its payments and financial services verticals, according to brokerage JM Financial.

Sequentially, YES Securities expects overall revenue growth of around 2%, adjusting for the Rs 70 crore UPI incentive booked in the March quarter.


Payments services revenue is forecast to rise 5% quarter-on-quarter, while financial services and others may grow 10% QoQ, aided by a likely improvement in loan disbursals, even as lower take rates and reducing First Loss Default Guarantees (FLDG) weigh on topline growth.

A key metric to watch will be the payment processing charges (PPC) as a percentage of payments revenue. YES Securities estimates this to rise to 55% in Q1, up from 49.8% in Q4FY25, mainly due to the absence of the UPI incentive benefit that had supported margins in the previous quarter.

The company's profitability will also be shaped by its expense profile. YES Securities projects total expenses (excluding PPC and ESOP costs) to increase 5% QoQ, compared to 1% in Q4FY25.

This, coupled with lower operating leverage, may compress the EBITDA margin (excluding other income and ESOP cost) to just 0.6%, a sequential decline of 362 basis points.

Even so, JM Financial believes Paytm is on track to report PAT-level profitability, driven by improved contribution margins and indirect expense control. Notably, the company had booked an exceptional loss in Q4FY25 due to an accelerated charge on ESOP cancellations.

All eyes will be on the sustainability of Paytm's margin trajectory, the impact of lower FLDGs on financial services revenue, and commentary around UPI monetisation and lending partnerships as the company steps into a crucial post-regulatory transition phase.

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