One97 Communications, the parent company of Paytm, reported a net profit of Rs 122.5 crore for the quarter ending June 2025. This marks a remarkable turnaround from the Rs 840 crore loss recorded during the same period the previous year. The company attributed its success to a focus on sustainable growth, operational efficiency, and strategic cost management.
Paytm’s operational revenue surged by 27% year-on-year to reach Rs 1,917.5 crore, up from Rs 1,501.6 crore the previous year. The increase was driven by enhancements in payment processing margins and a rise in services provided. A key factor in this profitability shift was the company’s initiatives to optimise costs while maintaining high service quality.
Cost Management and Strategic Initiatives
The reduction in expenses played a crucial role in Paytm’s recovery. The company reported a more than 50% decrease in marketing and promotion spending, dropping from Rs 221.4 crore to Rs 99.8 crore. As a leading player in the fintech sector, Paytm is establishing benchmarks in digital finance and mobile payments.
Costs for non-sales employees fell by 28% year-on-year to Rs 346 crore, while expenses related to sales personnel increased by 219% to Rs 266 crore, indicating an expanded sales team to support growth.
Further contributing to the positive results was Paytm’s focus on enhancing its payment services and financial products. Revenue from payment services grew by 23% year-on-year to Rs 1,110 crore, with net payment revenue rising 38% to Rs 529 crore. Additionally, the gross merchandise value (GMV) increased 27% to Rs 5.39 lakh crore, reflecting a growing adoption of Paytm’s payment solutions.
Expanding User Base and Market Reach
Paytm’s expansion into tier-2 and tier-3 cities has significantly boosted its user engagement. The number of monthly transacting users reached 7.4 crore in the reported quarter, underscoring the increasing acceptance of its services across India. The company’s merchant subscriptions also hit a record 1.3 crore, growing by 21 lakh year-on-year.
Vijay Shekhar Sharma, CEO of Paytm, emphasised the company’s commitment to transparency in its financial reporting by eliminating adjustments related to employee stock options. This move is expected to foster greater investor confidence.
The financial services sector saw remarkable growth as well, with revenue doubling year-on-year to Rs 561 crore. This surge was attributed to an increase in merchant loans and an enhancement in asset quality.
In summary, Paytm’s performance in Q1 FY25 illustrates a successful transition from a loss-making entity to a profitable business, primarily due to effective cost management, growth in payment services, and expanding merchant subscriptions. With a commitment to innovation and operational efficiency, Paytm is well-positioned to continue its growth trajectory in India’s competitive fintech landscape.
