Paytm's Payments Business Drives Strong Q1 Growth Despite Marketing Dip
Paytm reported strong Q1 FY27 growth driven by its payments business, while marketing services revenue declined despite higher promotional spending.
SociapaHQ
Paytm posted a mixed Q1FY27 performance across business segments with robust growth in high margin payments business, continued weakness in marketing services revenue despite increased spends on customer acquisition and retention.
Marketing services revenue fell 3% year-on-year to ₹239 crore in the April-June quarter from ₹246 crore a year earlier. In contrast, the company’s core payments business, with revenue from payment services up 33% to ₹1,384 crore from ₹1,044 crore, shows the company’s growing dependence on it.
However, despite the fall in the marketing services revenue, Paytm increased its spending on customer acquisition and customer engagement. Marketing expenses rose 27% to ₹79 crore compared to ₹62 crore in the same quarter last year.
"Marketing costs combined with promotional expense have increased year-on-year, with spends already paying back, reflecting in improved retention and continued market share gains," the company said in its quarterly shareholder report.
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Strong Financials:
The fintech company delivered a strong financial performance during the quarter overall. Revenue from operations increased 31% YoY to ₹2,440 crore and EBITDA rose 182% to ₹203 crore from ₹72 crore in the year-ago period. The net profit increased by 79 per cent to ₹220 crore from ₹123 crore in the comparable quarter of FY26.
Paytm said its other income declined to ₹182 crore in the quarter, citing lower returns on reinvestment of maturing investments due to cumulative repo rate cuts of 125 basis points in the past year. The company says other income is expected to be broadly stable for the remainder of FY27.
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The company ended the quarter with a cash balance of ₹13,529 crore up ₹657 crore YoY, giving it significant financial flexibility to pursue growth opportunities in the future.
"We do have a large cash balance and want to maintain that position of being very well capitalised. We are working on attractive organic and inorganic opportunities, and are seeing early signs through MTF, etc., for partial use of this capital with high return on investment," the company said.
Paytm added that it would remain disciplined in deploying capital and would not utilise its cash reserves simply because they are available. The company said maintaining a strong liquidity position gives it strategic flexibility while it evaluates both organic expansion opportunities and potential acquisitions.
