Paytm Q2 results showed revenue rising 28% year on year to ₹2,648 crore for the quarter ended September 2026, while EBITDA increased 90% to ₹270 crore. In its October 26 announcement, the company reported profit after tax of ₹225 crore and an EBITDA margin of 10%.
Key Takeaways
- EBITDA grew faster than revenue as indirect expenses declined relative to sales.
- Financial-services distribution revenue rose 49%, outpacing payment-services growth.
- Paytm expects higher loan-guarantee costs from the December quarter but forecasts further EBITDA improvement.
Paytm Q2 results show stronger operating profitability
Paytm’s Q2 FY27 results announcement said its EBITDA margin reached double digits for the first time. The company attributed stronger operating profitability to merchant and consumer business growth, expanded monetisation and artificial-intelligence adoption.
Indirect expenses increased 14% year on year to ₹1,209 crore, slower than revenue growth. As a share of revenue, those expenses fell to 46% from 52% a year earlier. Paytm said AI-supported improvements across acquisition, servicing, fraud prevention and other operations helped contain costs.
Lower exceptional expenses also supported reported profit: the charge fell to ₹4 crore from ₹190 crore a year earlier. That makes the improvement in operating earnings a separate consideration from the benefit of a smaller exceptional charge.
| Item | Details |
|---|---|
| Merchant payment value | ₹7.1 lakh crore in Q2 FY27, up 26% year on year. |
| Subscription merchants | 1.64 crore, with 27 lakh added over the past year. |
| Monthly transacting users | 8.5 crore, an increase of 1 crore year on year. |
| Key financial-services customers | 8.8 lakh, up 35% year on year. |
Financial services lead growth as payments expand
Financial-services distribution revenue increased 49% to ₹912 crore. Paytm attributed the expansion to merchant lending, personal loans, Paytm Postpaid and improved monetisation in broking and wealth products. Repeat borrowers accounted for more than half of merchant loan disbursements during the quarter.
Payment-services revenue rose 25% to ₹1,434 crore. Net payment revenue reached ₹644 crore, up 8% on a reported basis and 21% when excluding Payments Infrastructure Development Fund incentives from the comparison. The distinction matters because the comparable growth rate removes the effect of those incentives.
Paytm said its payment-processing margin remained above four basis points, supported by fee-generating payment instruments and improved pricing. Its merchant and consumer activity measures also expanded.
Higher lending costs expected from the December quarter
Paytm expects default loss guarantee costs to increase from the December 2026 quarter as it expands loan distribution through lending partners. These are expected upfront costs rather than expenses already reflected in the September-quarter results.
Management nevertheless expects EBITDA to continue improving. That outlook rests alongside its stated expectation that revenue growth and AI-led operating efficiencies will support longer-term margin expansion; it is guidance, not a reported result.
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