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Informist, Monday, Oct. 27, 2025

 

By Krity Ambey

 

NEW DELHI – Over a year after its uneasy run-in with the banking regulator and the subsequent easing of business curbs, One 97 Communications Ltd. is showing early signs of recovery. Supported by growth in revenue from operations, the Paytm parent is likely to stay profitable in the September quarter. The company has been in the black only twice so far--in the year-ago quarter and the preceding one--though the profit in the same quarter last year was due to a one-off gain from the sale of its ticket-booking business. The reporting quarter is also expected to mark Paytm's second consecutive quarter of positive earnings before interest, taxes, depreciation, and amortisation since its listing on the bourses in 2021.

 

The fintech company, which will release its financial results for the September quarter on Nov. 4, is likely to post a net profit of INR 1.50 billion, according to the average of estimates from four brokerages. The projections for the September quarter net profit range from INR 1.35 billion to INR 1.68 billion. 

 

While the consensus estimate indicates an 84% year-on-year decline in net profit, this comparison is skewed by the exceptional gain in the same quarter last year. If not for the INR 13.45 billion gain from the sale of the entertainment ticketing business, the company would have reported a loss of INR 4.17 billion in the year-ago quarter. Its operating loss in that quarter was INR 4.04 billion.

 

One 97 Communications broke its streak of operating losses in the June quarter, with an EBITDA of INR 720 million. Analysts expect the momentum in its core business to continue, with the company likely to report EBITDA of INR 1.08 billion for the September quarter, up 51% quarter-on-quarter, according to the average of four brokerages. The EBITDA forecast ranges from INR 772 million to INR 1.75 billion. Paytm's EBITDA margin is likely to expand by 341 basis points from a quarter ago to 8.7%, according to YES Securities (India) Ltd., which has the highest EBITDA estimate.

 

According to consensus estimates, the company's net profit will be up 22% sequentially. One 97 Communications reported a net profit of INR 1.23 billion in the June quarter, after a provision of INR 167 million for impairment of investments and optionally convertible debentures. Excluding this provision, Paytm's profit would have been INR 1.39 billion, which means the September quarter consensus estimate is just 8% higher than the adjusted net profit for the June quarter.

 

The fintech company's consolidated revenue from operations is expected to jump 23% on year to INR 20.36 billion, according to the average of estimates from four brokerages. Sequentially, the revenue is expected to grow 6%. These figures suggest Paytm has not yet fully recovered from the impact of the Reserve Bank of India's operational restrictions imposed in 2024. Before the regulatory action, Paytm averaged INR 25 billion in quarterly revenue for a year.

 

However, the Reserve Bank of India's latest in-principle approval for One 97 Communications' subsidiary Paytm Payments Services Ltd. to onboard new merchants and operate as a payment aggregator is seen as a positive sign of recovery. The RBI had imposed operational restrictions on Paytm Payments Bank in January 2024 owing to continued non-compliance with regulations and significant supervisory concerns. The regulatory action had impacted the company's widely used Unified Payments Interface application, Paytm, as monthly transaction users fell by over 20% to 71 million. At the end of the June quarter, Paytm's monthly user transactions had recovered and were 74 million. The fintech company received approval to begin onboarding new UPI users in October 2024.

 

The company's share price, which had fallen by over 50?ter the RBI's action to a low of INR 317.45, has not only rebounded but also risen. On Monday, the shares closed 1.5% higher at INR 1,306 on the National Stock Exchange. Since the June quarter results, Paytm's shares have surged 22%. Of the eight research reports on One 97 Communications available with Informist, seven have a 'buy' rating, with an average target price of INR 1,356. Only one brokerage has a 'hold' rating on the stock with a target price of INR 1,000. 

 

Following are the earnings estimates for One97 Communications for the September quarter based on reports from four brokerages in descending order of the estimate of net profit (in INR million):

 

Brokerage Firms	Net Sales	Net Profit	EBITDA
YES Securities (India) Ltd.	20,127	1,676	1,752
JM Financial Securities Pvt. Ltd.	20,498	1,603	886
Emkay Global Financial Services Ltd.	20,699	1,390	929
Motilal Oswal Financial Services Ltd.	20,112	1,345	772
Average	20,359	1,503.50	1,084.75

 

End

 

 

Edited by Saji George Titus

 

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