Paytm Q2 Results: One97 Com Net Profit Narrows 98% to Rs 21 Cr; Strong 24% Jump in Revenue Offers Some Relief

Fintech major One 97 Communications, the parent company of Paytm, released its financial results for the second quarter of FY26 (July-September 2025), revealing a sharp decline in profitability despite solid operational performance.

Paytm Q2 Results: Net Profit Crashes 98% to Rs 21 Crore

According to the company's consolidated financial statements, net profit fell 98% year-on-year to Rs 21 crore, compared to Rs 939 crore reported during the same period last year. The steep drop in profit came as Paytm did not benefit from the one-time gains that had significantly boosted its previous year's results.

Revenue Growth Remains Robust Despite Profit Slump

Despite the profit erosion, Paytm recorded a 24% year-on-year increase in revenue from core operations, rising to Rs 2,061 crore in Q2 FY26 from Rs 1,659 crore in the corresponding quarter of FY25. The strong top-line growth underscores the company's expanding scale in its core fintech, payments, and merchant services businesses.

At the same time, total expenses declined 8.15% to Rs 2,062 crore, compared to Rs 2,245 crore in the same period last year, reflecting cost optimization efforts. However, the fall in expenses was not enough to offset the absence of exceptional income and the impact of regulatory developments.

In the July-September quarter of FY25, Paytm's net profit had received a major boost from a one-time gain of Rs 1,345 crore, resulting from the sale of its movie ticketing and events business to Zomato. This extraordinary gain had inflated profits in the prior year, creating a high base effect for comparison in FY26.

For the latest quarter, there were no such exceptional gains, which led to a significantly lower net profit figure despite revenue growth.

Exceptional Losses Due to Online Gaming Venture

In contrast to the previous year's windfall, Paytm incurred an exceptional loss of Rs 190 crore during Q2 FY26. This loss stemmed from a loan provided to its online gaming joint venture, First Games Technology Private Limited (FGTPL).

The company continues to hold ownership in FGTPL; however, given recent developments and regulatory uncertainty, Paytm has reported the carrying value of its investment as nil.

Regulatory Impact: Online Gaming Ban Hits Financials

A key factor weighing on Paytm's financial performance this quarter was the Promotion and Regulation of Online Gaming Act, 2025, which prohibits online gaming activities across India. The enactment of this legislation forced the company to record an impairment loss of Rs 190 crore against the loan extended to FGTPL, both for the quarter and the six-month period ending September 30, 2025.