Paytm Stages Strong Comeback with Profit Turnaround and Growth Momentum

Report by: Syed Taskin Ahmed 

New Delhi, October 3, 2025 — Fintech giant Paytm is making a strong comeback after years of losses and regulatory hurdles, as the company reported a net profit of ₹122.5 crore in Q1 FY26, marking a major turnaround from previous losses.

According to its latest earnings report, Paytm’s operating revenue grew 28% year-on-year, driven by strong growth in payments services and financial services distribution. The company also emphasized that tighter cost controls, including a reduction in employee expenses and stock-based compensation, have significantly boosted profitability.

Focus on Profitable Growth

Payments services revenue rose 18% YoY, while loan distribution and financial services nearly doubled, with repeat borrowers driving strong disbursement volumes. Despite intense competition from PhonePe and Google Pay, Paytm has managed to maintain a robust merchant base and user engagement.

Cost Cutting and Efficiency

In FY25, Paytm reduced its workforce by around 4,600 employees as part of a wider efficiency drive. The company has also cut down on indirect expenses, improving margins and cash flow.

Regulatory Challenges Remain

However, challenges remain. The Reserve Bank of India (RBI) had earlier imposed restrictions on Paytm Payments Bank for compliance violations, and the Enforcement Directorate has issued notices over alleged foreign exchange rule breaches. Additionally, Paytm’s wallet user base has seen a sharp decline, with the company now nudging users to reactivate inactive accounts.

Analysts’ Outlook

Market analysts say Paytm’s return to profitability marks a crucial step in its turnaround journey. With strong liquidity, consistent revenue growth, and renewed focus on compliance, Paytm appears to be on track for a sustainable revival.

“While regulatory scrutiny and competition remain key risks, Paytm’s financial rebound signals a new phase of disciplined growth,” one analyst noted.