Fintech giant delivers another profitable quarter, trims costs, and expands merchant business; UPI market share, device subscriptions, and financial services scale up.
Paytm posted a consolidated net profit of INR 225 Cr in Q3 FY26, marking its second consecutive profitable quarter and a sharp turnaround from a loss of INR 208 Cr in the same period last year. On a sequential basis, profit surged over 10X from INR 21 Cr in Q2, though that quarter included an exceptional loss of INR 190 Cr.
The company’s operating revenue rose 20% YoY to INR 2,194 Cr, while total income, including INR 212 Cr in other income, stood at INR 2,406 Cr. Costs were under control, with total expenses dipping 2% YoY to INR 2,175 Cr, resulting in a significant boost to profitability.
Key Financial Highlights
- Net profit: INR 225 Cr (vs INR 208 Cr loss YoY)
- Revenue from operations: INR 2,194 Cr (+20% YoY, +6.5% QoQ)
- EBITDA: INR 156 Cr vs INR 223 Cr loss YoY
- EBITDA margin: 7%
- Cash balance: INR 12,882 Cr (slightly down due to festive working capital and escrow prefunding)
The company incurred an INR 12 Cr cost due to new labour code implementation and pre-funded INR 700 Cr into escrow post transfer of its offline merchant business to Paytm Payment Services Ltd (PPSL).
Business Momentum: Consumer & Merchant Segments Scale
Paytm continued to demonstrate broad-based growth across consumer and merchant verticals, led by deeper penetration, higher usage, and traction in financial services.
UPI & Consumer Payments:
- UPI GMV rose 35% in 9M FY26, more than 2X the industry average of 16%
- MTUs grew by 60 Lakh YoY to 7.6 Cr
- Paytm credited this to its AI-first, retention-focused product strategy
Merchant Ecosystem:
- Device subscriptions hit 1.44 Cr, with 27 Lakh added YoY
- Offline merchant business moved to PPSL; CEO Vijay Shekhar Sharma named MD & CEO of the unit for 5 years
- PPSL now holds all three key RBI payment licences, enabling resumption of online merchant onboarding
Financial Services:
- 7.1 Lakh customers availed loans, wealth, or equity products in Q3
- Growth led by merchant loans and equity broking users, even as DLG volumes dipped
- Distribution continued to deepen despite a softer lending environment
Marketing and Other Verticals: Mixed Results
While core payments and lending showed robust growth, other verticals remained mixed:
- Marketing services revenue fell 11% YoY to INR 238 Cr
- GMV for ticketing, deals, gift vouchers stood at INR 2,232 Cr
- The company noted a shift toward high-margin, core focus areas as part of operational efficiency
Strategic Updates & Cash Flow
Paytm’s cash balance dipped slightly to INR 12,882 Cr from INR 13,068 Cr last quarter, primarily due to:
- Higher festive season working capital needs
- Regulatory-led pre-funding of escrow accounts
- Growth in margin trading facility (MTF) book
Still, the company emphasized its financial discipline and strong liquidity, with continued investments in merchant infrastructure and platform expansion.
Outlook: Leaner, Profitable, and Platform-First
Paytm’s Q3 performance reinforces a pivot to disciplined growth—built around retention, embedded financial services, and merchant monetisation.
With UPI gains, rising lending distribution, and device-driven merchant stickiness, the company is aiming for sustainable profitability, even as it navigates compliance shifts and macroeconomic constraints.
The next few quarters will test whether this momentum can be maintained as peers ramp up competition across digital payments, lending, and offline merchant enablement.
TL;DR
Paytm posted INR 225 Cr profit in Q3 FY26, reversing last year’s INR 208 Cr loss. Revenue rose 20% YoY to INR 2,194 Cr. The company saw strong UPI growth, deeper merchant penetration, and rising lending distribution, while keeping costs in check and expanding its PPSL-led offline payments play.
AI summary
- Q3 profit: INR 225 Cr vs INR 208 Cr loss YoY
- Revenue up 20% to INR 2,194 Cr; EBITDA margin at 7%
- UPI GMV up 35%; MTUs at 7.6 Cr
- Merchant devices hit 1.44 Cr; offline business moved to PPSL
- Financial services users rose to 7.1 Lakh; marketing revenue fell
