Paytm UPI growth outpaces industry for third straight quarter; reports Rs 225 cr PAT

The company recorded a 20 per cent year-on-year increase in operating revenue to Rs 2,194 crore, driven by higher payments GMV, growth in merchant subscriptions and expansion in financial services distribution. Revenue from the distribution of financial services increased 34 per cent YoY to Rs 672 crore, driven by continued growth in the distribution of merchant loans and wealth products.

One 97 Communications Ltd (Paytm) continued its profitability momentum in the December quarter (Q3 FY26), reporting a profit after tax of Rs 225 crore, to mark its third consecutive profitable quarter. The performance was backed by industry-leading customer monetisation and UPI transaction growth that outpaced industry averages. The company recorded a 20 per cent year-on-year increase in operating revenue to Rs 2,194 crore, driven by higher payments GMV, growth in merchant subscriptions and expansion in financial services distribution. Paytm said its AI-first, product-led strategy has driven consistent gains in consumer UPI market share, with Paytm's UPI GMV growing 35per cent over the last nine months, significantly ahead of industry growth of 16 per cent. The results were supported by sustained growth across core payments and financial services businesses, improved operating leverage, and disciplined cost management. EBITDA improved to Rs156 crore, translating into an EBITDA margin of 7 per cent, an improvement of Rs379 crore year-on-year. Indirect costs declined 8per cent YoY at Rs 1,092 crore, driven by lower employee costs and lower provision for doubtful debt (PDD). A part of Paytm's payments revenue during the quarter included incentives under the RBI's Payments Infrastructure Development Fund (PIDF) scheme, which was applicable until December 2025. The company earned a total of Rs 216 crore in incentives for the nine months ended December 2025. In the absence of PIDF incentives going forward, Paytm said it expects its contribution margin to remain in the mid-50per cent range. Paytm's payment services revenue increased 21 per cent YoY to Rs 1,284 crore, while net payment revenue grew 25 per cent YoY to Rs 613 crore, led by higher payment processing margins and growth in merchant subscriptions. The company's Gross Merchandise Value (GMV) rose 24 per cent YoY to Rs6.2 lakh crore, reflecting continued gains in both merchant and consumer payments. Merchant subscriptions reached 1.44 crore, with an addition of 27 lakh devices year-on-year, expanding its recurring revenue base. Revenue from the distribution of financial services increased 34 per cent YoY to Rs 672 crore, driven by continued growth in the distribution of merchant loans and wealth products. Contribution profit for the quarter stood at Rs1,249 crore, up 30per cent YoY, with a contribution margin of 57 per cent due to higher payment processing margins and increased share of distribution of financial services revenue. Paytm ended the quarter with a cash balance of Rs 12,882 crore, providing significant flexibility to expand business. The company said it continues to strengthen its leadership across small and large merchants, both online and offline, by deepening adoption of its full-stack payment offerings. It added that ongoing product innovation and AI-led merchant acquisition are improving unit economics and supporting sustained profitability.

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