Vijay Shekhar Sharma, CEO of One97 Communications (Paytm), announced that the company anticipates achieving profitability in the first quarter of fiscal year 2026 (Q1 FY26), following a significant reduction in net losses during Q4 FY25.
📊 Q4 FY25 Financial Overview
In Q4 FY25, Paytm reported a consolidated net loss of ₹545 crore. However, this figure includes a one-time exceptional charge of ₹522 crore, primarily due to accelerated expenses related to the Employee Stock Ownership Plan (ESOP) and other impairments. Excluding these exceptional items, the net loss stood at ₹23 crore. The company also achieved an operational profit of ₹81 crore after excluding ESOP costs.
Revenue from operations declined by 15.7% year-on-year to ₹1,911.5 crore, down from ₹2,267.1 crore in the same quarter of the previous year.
💬 CEO’s Statement on Profitability
During the earnings call on May 6, Sharma stated, “We are at the verge of PAT (profit after tax) profitability. I am very sure that next quarter onwards, if everything goes as we are seeing, it could very well be a PAT profitable quarter.”
🔄 Strategic Initiatives and Future Outlook
Paytm is focusing on several strategic initiatives to drive profitability:
- Digital Payments: Strengthening its core payments business, which Sharma describes as the foundation for profitability.
- Credit Services: Recalibrating its credit distribution strategy, incorporating mechanisms like the First Loss Default Guarantee (FLDG) to manage risks.
- Regulatory Compliance: Enhancing compliance processes following past regulatory challenges, including restrictions imposed by the Reserve Bank of India on Paytm Payments Bank in early 2024.
- International Expansion: Establishing new subsidiaries in the UAE, Saudi Arabia, and Singapore to expand its global footprint.
- Artificial Intelligence: Leveraging AI to improve operational efficiency and reduce the need for additional hiring.
📈 Market Response
Following the Q4 FY25 results, Paytm’s stock experienced a nearly 7% increase. Analysts from Motilal Oswal Financial Services and JM Financial have maintained a positive outlook on the stock, citing improved business metrics and cost management.
🔮 Conclusion
Paytm’s anticipated shift to profitability in Q1 FY26 marks a significant milestone in its financial journey. With strategic focus on digital payments, credit services, and international expansion, coupled with enhanced regulatory compliance and operational efficiency, the company is poised for sustainable growth in the coming fiscal year.The Economic Times
