Why Paytm Share Price Jumps 6% on May 7 – Details Inside!

The stock price of One97 Communications, which is the parent company of Paytm, rallied more than 6% on May 7, as the fintech giant witnessed a drastic reversal in its earnings performance in the March quarter of FY26, backed by robust growth in its payment systems, merchant subscriptions, and financial services distribution.

Paytm shares opened with a gap-up move and went on to see gains for two sessions in a row. The stock rallied as high as 6.24% at ₹1,181 during the day before closing at ₹1,163, up 4.7% from its opening price of around ₹1,150. As of 10:40 AM, the benchmark index Nifty 50 had risen 0.25%.

Paytm Returns to Profit in Q4FY26

In Q4FY26, Paytm posted a net profit of ₹183 crore on a consolidated basis, up from a net loss of ₹545 crore in Q4FY25. According to another estimate, the company made a net profit of ₹184 crore during the quarter compared to a net loss of ₹540 crore a year ago, indicating a sharp improvement in performance.

The revenue from operations for the quarter was 18.4% higher at ₹2,264 crore compared to ₹1,912 crore in Q4FY25. The EBITDA margin was 5%, with an EBITDA of ₹132 crore.

The company attributed its growth to the rise in transaction volumes, growth in the number of merchants subscribing, and robust sales in financial services distribution.

Strong FY26 Performance

For the financial year FY26, Paytm recorded consolidated profits worth ₹552 crore as against losses of ₹663 crore in FY25.

The firm reported an increase in its annual revenue from operations by 22.2%, which reached ₹8,437 crore as against ₹6,900 crore during the previous financial year. The EBITDA in FY26 reached ₹502 crore while it registered losses of ₹1,506 crore in FY25.

This remarkable achievement is attributable to growth in the area of payments, merchant services, and lending.

Financial Services and Merchant Business Drive Growth

Distribution of Paytm's financial services is one of the significant growth factors during the FY26 period.

Financial services distribution revenues jumped by 52% YoY to ₹2,593 crore in the year. For Q4FY26, financial services revenues climbed 37% YoY to ₹750 crore.

The customer base that received financial services from the company went up to 0.75 million from 0.55 million YoY.

The growth trend in merchant subscriptions was strong as well. Number of subscription merchants hit 15.1 million in the quarter, posting a net addition of 2.7 million YoY.

Merchant gross merchandise value grew 27% YoY, while the consumer UPI gross transaction value jumped 46% in the quarter. The number of monthly transacting users stood at 7.7 crore.

Impact of PIDF Withdrawal and UPI Incentives

The reason behind Paytm’s poor quarterly results, according to the firm, is the end of the PIDF scheme, and FY26 rewards under UPI are yet to be announced.

Notwithstanding the above, Paytm claims to have managed to counterbalance 30-40% of the effect resulting from the termination of the PIDF scheme.

AI Deployment Improving Efficiency

The firm also mentioned greater use of artificial intelligence within its operations such as engineering, fraud detection, merchant onboarding, and collections.

Paytm added that AI-supported coding, testing, and deployment platforms are aiding in increasing operating leverage and lowering software development expenses.