Paytm share price jumps 4% despite 98% decline in net profit. Should you buy or sell?
Paytm parent company One97 Communications’ shares jumped nearly 4 per cent to ₹1,310.05 apiece on Thursday, November 6, despite the fintech major posting a sharp decline in its net profit to ₹ 21 crore in the September quarter as compared to ₹ 928 crore in the same period last year.
Paytm stock has been in an upward trend in the short term, having risen 7 per cent in a month and a whopping 61 per cent in over six months.
Paytm Q2 results 2025
Paytm’s consolidated net profit for Q2FY26 dropped sharply by 98 per cent year-on-year to ₹21 crore, down from ₹928 crore in the same quarter last year.
The decline in profit was primarily due to a one-time impairment charge of ₹190 crore related to its joint venture, First Games Technology. Excluding this impact, the profit after tax (PAT) stood at ₹211 crore. On the other hand, the profit in the same quarter last year was supported by a one-time gain of ₹1,345 crore from the sale of its movie and event ticketing business to Zomato.
Revenue from operations grew 24 per cent year-on-year to ₹2,061 crore, driven by an increase in subscription merchants, higher payments GMV, and expansion in financial services distribution.
Despite the profit dip, the company’s operating performance remained robust.
Operating performance saw a significant improvement, as EBITDA surged 95.8 per cent to ₹141 crore from ₹72 crore in the previous quarter. The EBITDA margin widened to 6.8 per cent, nearly twice the 3.8 per cent recorded in Q1, underscoring the company’s ongoing emphasis on cost control and operational efficiency.
Contribution profit surged 35 per cent YoY to ₹1,207 crore, while the contribution margin improved by 5 percentage points to 59 per cent, supported by stronger net payment revenues and reduced DLG expenses.
Paytm share price: Should you buy or sell?
Brokerage firm JM Financial has maintained its ‘buy’ rating on Paytm stock, while raising the target price of ₹1,470.
“We cut marketing services revenue estimates; however, we raise payments and financial services revenue estimates due to steady improvement. As a result, consol. Revenue estimates reduced by 0-1% over FY26-28E. We also anticipate higher PPM, though a lower probability of MDR on UPI dilutes the benefit. CM is in line with management guidance of mid to high 50s. With Paytm still seeing efficiencies in fixed costs, we have lowered the indirect cost growth. Resulting operating leverage takes EBITDAM higher by 100-140bps over the forecast period. Our Sep’26 TP rises to INR 1,470 (vs. INR 1,420), valuing Paytm at 40x Sep’27E EBITDA. Maintain ‘BUY’,” the brokerage firm said.
