Paytm shares jump 6% post-Q4 results; revenue momentum can support earnings, say analysts

The results were declared in the evening on Wednesday, May 6.

Paytm's financial performance

The company reported a consolidated net profit of ₹184 crore for the quarter ended March 31, 2026 (Q4 FY26). It had reported a loss of ₹540 crore in the year-ago period.

Its revenue from operations came in at ₹2,264 crore, up 18.4% against ₹1,912 crore logged in the year-ago period.

The company, in its earnings release, said that the reported numbers for the quarter were impacted by the discontinuation of the PIDF scheme, and the FY 2026 UPI incentive is yet to be finalised. "We were able to achieve our guidance of 30-40% offset of PIDF impact in Q4 FY 2026," the company said.

FY26 financials

Profit after tax (PAT) for FY26 stood at ₹552 crore against the loss of ₹663 crore in FY25.

What analysts said

Analysts are broadly positive on Paytm after the earnings announcement, highlighting resilient operating performance despite the discontinuation of PIDF incentives and the absence of UPI incentive accruals during the quarter.

Analysts pointed to strong growth in financial services, improving payment margins on a core basis, and disciplined cost management as key positives.

Bernstein

Bernstein said Paytm’s Q4FY26 EBITDA of ₹1.3 billion was broadly in line with consensus expectations. It highlighted that profitability remained resilient despite the loss of PIDF incentives and no UPI incentive accrual in the quarter.

• Financial services revenue rose 12% QoQ and 38% YoY, supported by strong traction in merchant lending.

• UPI volumes surged 46% YoY, significantly ahead of the industry growth of around 21%, indicating improving customer engagement.

• Device additions remained healthy at around 0.7 million during the quarter, easing concerns around competitive intensity.

• Indirect expenses stayed tightly controlled, increasing just 3% QoQ while declining 3% YoY.

However, it noted that payment margins declined to 9 basis points due to the discontinuation of PIDF incentives.

Looking ahead, Bernstein expects a non-linear EBITDA expansion between FY26 and FY30, driven by over 20% revenue growth and disciplined cost control.

Citi

Citi said Paytm’s core payment margins, excluding subsidies, continued to improve steadily. However, profits and EBITDA came in below estimates due to higher marketing expenses as the company increased promotional spending during the quarter.

• The merchant business remains robust.

• Strong momentum in financial services continues to support growth.

• Operating leverage is improving as fixed costs remain under control.

Jefferies

Jefferies said the company’s revenue momentum helped offset the impact of missing UPI incentives.

While the reported performance came in slightly below estimates due to non-receipt of the UPI subsidy, the results were marginally ahead after adjusting for the incentive impact.

• Revenue grew 18% YoY, led by strong growth in financial services.

• Growth was achieved despite the absence of both PIDF and UPI incentives.

• Strong revenue momentum is likely to support earnings going forward, despite lingering uncertainty around UPI incentives.