Paytm profit falls 18.67% QoQ as operating margin slips
Costs grew faster than revenue sequentially, while other income exceeded reported pre-tax profit and the stock's initial gain was above its usual reaction.
Filed 06 May 2026, 20:21 IST · after market close · One 97 Communications Ltd (PAYTM)
Key takeaways
- The YoY turnaround was driven by revenue growth of +18.44% against expense growth of +6.59%, lifting operating margin by 10.47 percentage points.
- Sequential momentum weakened as expenses grew +4.61% against revenue growth of +3.19%, narrowing operating margin by 1.28 percentage points.
- Other income accounted for 102.58% of pre-tax profit, while the stock rose +7.82% after the results.
Price around the results
YoY turnaround, sequential giveback
One 97 Communications reported consolidated net profit of Rs 183 cr in Q4FY26, compared with a loss in Q4FY25. The YoY improvement came as revenue grew +18.44% while expenses rose +6.59%, expanding operating margin by 10.47 percentage points to 5.83%. Sequentially, however, net profit fell -18.67% as expense growth outpaced revenue growth.
Costs weakened the quarter and other income shaped profit
Operating margin narrowed 1.28 percentage points from Q3FY26 because expenses grew +4.61% against revenue growth of +3.19%. Interest expense also rose +25.00% sequentially, although depreciation declined -0.75%. Other income contributed 102.58% of pre-tax profit, so reported profit depended heavily on this non-operating component; the tax rate also rose 3.50 percentage points sequentially.
Margin trend turns down after two quarterly gains
The 5.83% operating margin remains well below the 59.41% median for the 52 Financial Services peers that had reported the quarter, placing the company third from the bottom. The quarterly trend had improved from 3.73% in Q1FY26 to 6.84% in Q2FY26 and 7.11% in Q3FY26 before the Q4FY26 decline. This is the first sequential margin fall after two consecutive increases.
Initial stock reaction exceeded its recent norm
The stock rose +7.82% on the reaction day, with a +3.55% opening gap and volume at 4.67 times its reference level. That initial gain was larger than the 4.15% median absolute move across the eight prior result reactions. The earlier record was evenly split between four rises and four falls, so the direction was positive but not consistent with a one-sided historical pattern.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,264 cr | ₹2,194 cr | +3.19% | +18.44% |
| Other income | ₹199 cr | ₹211 cr | -5.69% | — |
| Expenses | ₹2,132 cr | ₹2,038 cr | +4.61% | +6.59% |
| Operating profit | ₹132 cr | ₹156 cr | -15.38% | — |
| Operating margin (%) | 5.83% | 7.11% | — | — |
| Interest | ₹5 cr | ₹4 cr | +25.00% | +11.11% |
| Depreciation | ₹132 cr | ₹133 cr | -0.75% | -12.18% |
| Profit before tax | ₹194 cr | ₹230 cr | -15.65% | — |
| Tax | ₹11 cr | ₹5 cr | +120.00% | +323.08% |
| Net profit | ₹183 cr | ₹225 cr | -18.67% | — |
| EPS (₹) | ₹2.87 | ₹3.52 | -18.47% | — |
Operating margin of 5.83% compares with a Financial Services sector median of 59.41% across 52 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +7.82% | +7.83% |
| Next session | +6.89% | — |
| 5 sessions | +3.06% | +5.70% |
| 15 sessions | +0.74% | — |
| 30 sessions | -1.85% | — |
Volume on the results session was 4.67× its 20-day average.
What to watch
- Whether operating margin recovers from 5.83% towards the Q3FY26 level of 7.11%.
- Whether revenue growth of +3.19% again exceeds expense growth of +4.61% sequentially.
- Whether other income's contribution to pre-tax profit falls from 102.58%.