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Informist, Friday, Jul. 17, 2026

 

By Pratiksha

 

NEW DELHI – Paytm operator One 97 Communications Ltd.'s net profit for the June quarter is expected to surge on year due to a sharp increase in revenue on the back of strong growth in the financial services business, according to brokerages tracking the company. 

 

The Noida-based fintech company's net profit is estimated to rise 44% on year to INR 2.01 billion for the June quarter, according to the average of estimates from five brokerages. Sequentially, the net profit is expected to rise 24%. The highest estimate of the bottom line is INR 2.48 billion from Nuvama Wealth Management Ltd. and the lowest is INR 1.85 billion from Bank of America Global Research Ltd.

 

One 97 Communications' net sales are expected to grow over 24% on year to INR 23.86 billion, as per the average of five estimates. Sequentially, the top line is seen up over 5%. "Revenue is expected to grow 23% YoY (year-on-year), driven by ~25% GMV (gross merchandise value) growth, strong financial services momentum and steady subscription revenue, partly offset by discontinuation of PIDF (Payments Infrastructure Development Fund) incentive revenue," JM Financial Services Ltd. said.

 

The fintech company had said in May that revenue growth in the financial year 2026-27 (Apr-Mar) is expected to be higher than the 22?livered in FY26, and indirect expenses will grow meaningfully slower than revenue. 

 

For the quarter ended March, total revenue from operations rose 18% on year to INR 22.64 billion. Revenue from payment services, the largest contributor to total revenue, rose 21% on year to INR 12.65 billion while financial services distribution revenue was at INR 7.50 billion, up 38% on year.

 

Motilal Oswal Financial Services Ltd. expects the company's gross merchandise value to rise 27% on year and 5% on quarter to INR 6.9 trillion in the June quarter. In Jan-Mar, the company's gross merchandise value grew 27% on year to INR 6.5 trillion. 

 

While some brokerages expect the company's contribution margin to remain stable around 55% in the June quarter, JM Financial sees it improving 40 basis points on quarter to 55.7%, supported by stable payment processing costs and lower other operating revenue. The company had reported a contribution margin of 55.4% in the March quarter. 

 

Analysts gave no details about the financial impact of the Reserve Bank of India's decision in April to cancel the licence of Paytm Payments Bank on One 97 Communications. However, after the central bank's decision, the company had said it had no exposure to Paytm Payments Bank and neither does it conduct any "material" business with the lender. Paytm Payments Bank was an associate entity of One 97 Communications. The financial services provider had said it faced "no direct financial impact" of the licence cancellation since it had impaired its investment in the bank as of Mar. 2024.

 

One 97 Communications will detail its June quarter results Monday. Brokerages will watch out for the company's commentary on operative leverage, merchant addition, and the pace of loan distribution. Shares of the company have risen over 20% since it declared its earnings for the March quarter on May 6. At 1248 IST, shares of the company were almost 2% lower at INR 1,336 on the National Stock Exchange.

 

Of the eight research reports on the company available with Informist, seven have a "buy" recommendation on the stock with an average target price of INR 1,548 per share, nearly 39% higher than the current price. Only one brokerage has a "hold" recommendation with a target price of INR 1,300.

 

Following are the Apr-Jun earnings estimates for One 97 Communications from five brokerages, in descending order of the estimate of net profit, in INR billion:

 

Brokerage	Net Sales	Net Profit
Nuvama Wealth Management Ltd.	24.00	2.48
Motilal Oswal Financial Services Ltd.	24.10	2.00
YES Securities Ltd.	23.58	1.88
JM Financial Institutional Securities Pvt. Ltd.	23.60	1.86
Bank of America Global Research Ltd.	24.03	1.85
Average	23.86	2.01

 

End

 

Edited by Deepshikha Bhardwaj

 

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