Paytm likely to see PAT profitability from Q1 FY26: Vijay Shekhar Sharma

Vijay Shekhar Sharma-led One 97 Communications is hopeful of turning profitable from the current quarter onwards as the fintech was able to achieve adjusted EBITDA breakeven during Q4 FY25. “We are at (on) the verge of PAT profitability, if you were to see every other expenditure...I'm very sure that in the next quarter (Q1 FY26) onwards, if everything goes as we are seeing, it could very well be a PAT profitable quarter,” Sharma said in the company's earnings call on Tuesday.

Talking about the monetisation opportunities on MDR on UPI for larger merchant transactions, Sharma said the company sees the talks of MDR (Merchant Discount Rate) coming on UPI. "It should show up sooner rather than later. Based on what we're seeing in the current financial year, it could show up at any point in time. And that will bring so-called monetisation to UPI."

CFO Milind Deora said Paytm expects UPI incentives to remain low going forward. He said even if the MDR comes in, it would still be only for very small merchants. "And it was never a very significant part of our business. Going forward, we expect that to be the lower number as indicated in the last year."

On the government's target of 1 billion UPI transactions per day in the next two to three years, Sharma says: "I believe there’s tremendous upside ahead for UPI in the country. The Finance Minister is rightly guided by the scale we're aiming for, and it's a perfect target to chase. Consumers won’t be charged, as I’ve said. While some misunderstandings exist, I don’t believe users will bear any cost. How MDR plays out is still evolving, but I believe NPCI and other bodies are working on it."

He, however, said they will not predict the government's moves. "Our focus is on building a product so good that growth comes without blitzscaling marketing spends."

The operator of fintech major Paytm recorded a net loss (attributable to owners) of ₹540 crore in Q4 FY25 as compared to ₹550 crore reported in the year-ago period, primarily due to a one-time exceptional charge of ₹492 crore owing to the acceleration of employee stock option (ESOP) expense. The company also incurred ₹30 crore towards other impairments.

Paytm said the Nomination and Remuneration Committee of its board at its meeting held today approved the grant of 1,04,400 stock options to the eligible employees. Further, the committee took note of 6,60,284 voluntarily forgone, cancelled and lapsed stock options.

The company said, excluding the exceptional items, its PAT was recorded at ₹23 crore, an improvement of ₹185 crore QoQ from ₹208 crore loss in Q3 FY25 and ₹415 crore loss in Q2 and ₹840 crore loss in Q1. The fintech reported a 16% fall in its revenue from operations in Q4 FY25 at ₹1,911.5 crore as compared to ₹2,267.1 crore in the year-ago period.