Paytm share price jumps 4% despite 98% decline in net profit. Should you buy or sell?

Paytm parent company One97 Communications share price jumped nearly 4 per cent to ₹1,310.05 apiece on Thursday, November 6, despite the fintech major posted sharp decline in its net profit to ₹21 crore in September quarter as compared to ₹928 crore previous year.

Paytm stock has been gaining in one last year. The stock has surged 7 per cent in a month and has given whopping 61 per cent returns in over six months.

Paytm’s consolidated net profit for Q2FY26 dropped sharply by 98 per cent year-on-year to ₹21 crore, down from ₹928 crore in the same quarter last year.

The decline in profit was primarily due to a one-time impairment charge of ₹190 crore related to its joint venture, First Games Technology. Excluding this impact, the profit after tax (PAT) stood at ₹211 crore. On the other hand, the profit in the same quarter last year was supported by a one-time gain of ₹1,345 crore from the sale of its movie and event ticketing business to Zomato.

Revenue from operations grew 24 per cent year-on-year to ₹2,061 crore, driven by an increase in subscription merchants, higher payments GMV, and expansion in financial services distribution.

Despite the profit dip, the company’s operating performance remained robust.

Operating performance saw a significant improvement, as EBITDA surged 95.8 per cent to ₹141 crore from ₹72 crore in the previous quarter. The EBITDA margin widened to 6.8 per cent, nearly twice the 3.8 per cent recorded in Q1, underscoring the company’s ongoing emphasis on cost control and operational efficiency.

Contribution profit surged 35 per cent YoY to ₹1,207 crore, while the contribution margin improved by 5 percentage points to 59 per cent, supported by stronger net payment revenues and reduced DLG expenses.

Brokerage firm JM Financial has maintained its ‘buy’ rating on Paytm stock, while raising the target price of ₹1,470.

(This is a developing story)

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