PAYTM

Sustains Turnaround Momentum Despite Real-Money Gaming Setback

Despite a one-time ₹190 crore impairment linked to its gaming JV,

’s Q2FY26 results reflect a steady turnaround, with strong growth in financial services, payments, and merchant subscriptions. - Gaming Impact & Profitability: Net profit stood at ₹21 crore, dragged by the ₹190 crore impairment on First Games. Excluding this, underlying PAT was ₹211 crore, marking continued profitability after its first positive PAT in Q1. - Revenue & Segment Growth: Revenue rose 24% YoY to ₹2,061 crore, led by merchant subscriptions and loan distribution. Payment services revenue grew 25% YoY to ₹1,223 crore, with net payment revenue up 28% to ₹594 crore. - Merchant & Credit Momentum: Merchant subscriptions hit a record 13.7 million, up 2.5 million YoY. Increased consumer use of credit instruments and EMIs boosted margins, as users shifted from low-margin bank payments to higher-margin credit-based transactions. - Strategic Focus Areas: CEO Vijay Shekhar Sharma emphasized future growth from financial services, global tech replication, and AI-led merchant tools. With regulatory clean-up largely complete, Paytm is pivoting to scalable, compliant, and high-margin engines. - Profitability Metrics: EBITDA rose to ₹142 crore, with margin improving to 7%. Analysts noted stronger-than-expected revenue growth and improved net payment margins, driven by festive season credit usage and product mix optimization. Outlook: Paytm’s core business remains resilient, with AI integration and financial services expansion offering long-term growth levers. The gaming impairment is a short-term drag, but the broader turnaround trajectory is intact.