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Indian fintech firm Paytm returned to profit in the June quarter, marking its first positive result since September 2024, as strong growth in lending and tighter cost controls helped turn around its finances.
The company posted a net profit of ₹1.23 billion ($14.24 million) for the three months ending June 30, reversing a loss of ₹8.39 billion a year earlier when its banking unit was shut down by the central bank. The last time Paytm booked a profit was in September, driven by a one-off gain from selling its ticketing arm.
Revenue rose 28% year-on-year to ₹19.18 billion, with the financial services segment — which includes loans — doubling over the period. Payment services, another key business line, grew 18%.
“Merchant lending continues to do well, even as personal loans remain under pressure,” the company said, noting early signs of a pickup in personal lending.
Paytm’s overall expenses dropped 19% to ₹20.16 billion. Adjusted EBITDA — excluding employee stock option costs — came in at ₹1.02 billion, a closely watched profitability gauge.
The firm had earlier flagged that it expected to be in the black this quarter, after months of restructuring and narrowing its focus on core operations following regulatory pressure.
With this return to profitability, Paytm said it sees room for further improvement in earnings in the coming quarters.
Paytm, once a frontrunner in India’s fintech boom, has been navigating regulatory challenges and pressure on margins, especially as the government continues to push for zero-cost digital payments as a public good.
Earlier this year, Paytm received federal government approval to invest in its core payments gateway arm, offering a positive development for the beleaguered Indian fintech company.
The finance ministry approved Paytm’s investment in Paytm Payments Services Ltd. (PPSL). While Paytm did not disclose details of the approved investment, a report from Reuters, citing a senior finance ministry official, indicated that Paytm secured approval for a 500 million rupee (about $6 million) investment in its payments division.
The approval was required due to Ant Group Co.’s nearly 25% stake in One97 Communications Ltd., Paytm’s parent company, which categorized the proposed investment as a direct foreign investment.
Amid heightened scrutiny of Chinese investments, Paytm’s billionaire founder Vijay Shekhar Sharma acquired a 10.3% stake from Ant last year, increasing his shareholding to just over 24% and becoming the largest shareholder in One97.
The investment brings Paytm a step closer to securing a payments aggregator license, a status that allows entities to offer digital payments for online retailers and merchants. Paytm’s application for this license has been pending with the Reserve Bank of India since 2022 when the company was also barred from onboarding new online merchants.
Following the latest government approval, Paytm announced that PPSL would re-submit its application for the payments aggregator license. If granted, the license will enable PPSL to offer its services to new merchants, expanding its business reach.
Last year, the Reserve Bank of India ordered Paytm Payments Bank Ltd., another unit of Sharma’s fintech enterprise, to cease accepting new deposits. This directive impacted Sharma’s ambitions in the digital payments space. In response, Sharma has sought to form new partnerships with financial institutions to maintain his digital payments operations.
Paytm Payment Services remains one of the core components of the company’s business, accounting for a quarter of its consolidated revenue.
