Shares of Paytm saw a nearly 4% increase in early trading on Wednesday, despite the company reporting a significant decline in profit for the second quarter of FY26. As of 10:03 am, the stock was up by 3.98% at Rs 1,318.50 on the Bombay Stock Exchange.
Paytm’s parent company, One 97 Communications, disclosed a net profit of Rs 21 crore for the period from July to September. This figure is substantially lower than the Rs 939 crore profit registered in the same period a year ago. The prior year’s figures were inflated due to a one-time gain of Rs 1,345 crore from the sale of its movie ticketing and events business to Zomato.
Despite the decrease in net profit, the company’s operational performance remained robust. Revenue from its core business surged by 24% to Rs 2,061 crore, compared to Rs 1,659 crore in the corresponding quarter last year. Meanwhile, total expenses decreased by 8.15% to Rs 2,062 crore from Rs 2,245 crore, as the company focused on cost optimization and operational efficiencies.
The company’s earnings were impacted by a one-time loss of Rs 190 crore related to an impairment on a loan provided to its online gaming joint venture, First Games Technology Private Limited. Following the enactment of the Promotion and Regulation of Online Gaming Act 2025, which banned online gaming, Paytm wrote down the joint venture’s carrying value to zero.
Investors seemed to overlook the profit decline, emphasizing the positive aspects of Paytm’s core business performance. Additionally, the announcement of Paytm’s inclusion in MSCI’s Global Standard Indexes effective from November 24 has buoyed investor sentiment. This inclusion is anticipated to attract foreign investment as index-linked passive funds adjust their portfolios. Analysts project that the addition of Paytm, along with three other Indian companies, could result in inflows of approximately $1.46 billion into the domestic market.
Despite facing regulatory challenges, Paytm’s improving financial performance and the credibility boost from its MSCI inclusion have resonated positively with investors.
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