Paytm profit rises marginally as operating margin improves
Revenue growth outpaced expense growth, but a higher tax rate limited the increase in consolidated net profit and other income remained material.
Filed 26 Oct 2026, 20:52 IST · after market close · One 97 Communications Ltd (PAYTM)
Key takeaways
- Revenue grew +28.48% YoY against expense growth of +23.85%, lifting operating margin by 3.36 percentage points to 10.20%.
- Net profit rose only +2.27% QoQ as the tax rate increased 12.02 percentage points, while other income contributed 59.93% of pre-tax profit.
- The stock fell 3.21% after the results, a smaller move than its 4.93% median absolute reaction over the last eight quarters.
Price around the results
Revenue growth lifts operating profit
In consolidated Q2FY27 results, revenue rose +8.17% QoQ and +28.48% YoY, while expenses grew more slowly at +5.92% and +23.85%, respectively. That operating leverage lifted operating profit by +33.00% QoQ and +91.49% YoY, taking margin up 1.91 percentage points sequentially and 3.36 percentage points year-on-year. The improvement therefore came from revenue growing faster than costs, rather than from a reduction in the cost base.
Other income remains central to reported profit
Other income of Rs 175 cr accounted for 59.93% of pre-tax profit, making reported earnings materially dependent on non-operating income. Net profit increased only +2.27% QoQ even as operating profit rose +33.00%, as the tax rate climbed 12.02 percentage points to 22.95%. Year-on-year, however, the tax rate was lower by 7.05 percentage points, which supported the sharp increase in net profit from the year-ago quarter.
Margin recovery continues, but sector gap is wide
Operating margin has now increased for two consecutive quarters, from 5.83% in Q4FY26 to 8.29% in Q1FY27 and 10.20% in Q2FY27, after declining in Q4FY26. Paytm's margin was 51.09 percentage points below the 61.29% median for the 35 Financial Services peers that had reported, placing it fourth from the bottom. The current quarter therefore extends the company's own margin recovery but still leaves it well below the reported peer median.
The post-result fall was smaller than Paytm's usual move
The stock declined 3.21% after the results, with the move running against its recent direction: it rose after five of the last eight results and fell after three. The magnitude was below the 4.93% median absolute reaction over those eight quarters, so the decline was weaker than Paytm's typical post-result move.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,648 cr | ₹2,448 cr | +8.17% | +28.48% |
| Other income | ₹175 cr | ₹182 cr | -3.85% | +464.52% |
| Expenses | ₹2,378 cr | ₹2,245 cr | +5.92% | +23.85% |
| Operating profit | ₹270 cr | ₹203 cr | +33.00% | +91.49% |
| Operating margin (%) | 10.20% | 8.29% | — | — |
| Interest | ₹7 cr | ₹7 cr | +0.00% | +40.00% |
| Depreciation | ₹146 cr | ₹131 cr | +11.45% | +6.57% |
| Profit before tax | ₹292 cr | ₹247 cr | +18.22% | +873.33% |
| Tax | ₹67 cr | ₹27 cr | +148.15% | +644.44% |
| Net profit | ₹225 cr | ₹220 cr | +2.27% | +971.43% |
| EPS (₹) | ₹3.52 | ₹3.44 | +2.33% | +966.67% |
Operating margin of 10.20% compares with a Financial Services sector median of 61.29% across 35 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -3.21% | -3.19% |
Volume on the results session was 1.51× its 20-day average.
What to watch
- Whether operating margin holds above 10.20%.
- Whether other income's 59.93% share of pre-tax profit declines.
- Whether expenses continue to grow more slowly than revenue, as they did at +5.92% versus +8.17% QoQ.