Paytm Eyes Profit Surge in FY26 as Financial Services Drive Strategic Shift

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Performance Pulse and Profitability Outlook:

Paytm has laid out a confident roadmap for FY26, signaling stronger profitability and deeper traction in financial services. The company reported Q1 EBITDA before ESOP costs at ₹1.02 billion, with expectations of further improvement across key metrics.

Key Highlights:

Contribution margin is projected to remain in the midtohigh 50s percentile for the full year.
Depreciation and amortization costs are expected to range between ₹5–6 billion.
ESOPrelated expenses are forecasted at ₹2.5–2.75 billion for FY26.
Indirect expenses as a percentage of revenue are anticipated to decline steadily, improving operating leverage.

Financial Services Momentum:

Paytm is shifting toward a higher share of nonFLDG (First Loss Default Guarantee) disbursements, reducing risk exposure.
Early signs of recovery in the personal loan credit cycle are emerging, suggesting improved borrower behavior.
The company expects robust growth in financial services customers, particularly in loan distribution and Paytm Money.
Merchant lending continues to outperform, supported by datadriven underwriting and expanding partnerships.

User Engagement and Retention:

Paytm is witnessing early signs of user growth and retention, aided by product innovation and improved onboarding.
AIled personalization and seamless integration across services are enhancing customer stickiness.

Strategic Focus:

The company remains committed to margin expansion, cost discipline, and scaling its embedded finance ecosystem, positioning itself as a fullstack fintech leader.

Sources: Economic Times, Mint, Business Standard, Paytm IR Blog, Livemint, NewsBytes.