MUMBAI: One 97 Communications, the parent company of Paytm, has announced a consolidated net profit of Rs 123 crore for the June quarter, a significant turnaround from a net loss of Rs 839 crore in the same period last year. This improvement was driven by a strong lending business, which contributed to a revenue of Rs 1,918 crore, reflecting a 28% increase, alongside stringent expense management.

In the corresponding quarter last year, the company faced the full repercussions of the RBI directive, effective from mid-February 2024, which mandated the closure of its primary payments business due to non-compliance with KYC regulations and various other issues despite multiple warnings.

For the quarter, operating revenue reached Rs 1,918 crore, marking a 28% year-on-year growth and a slight increase from Rs 1,911 crore in Q4 of FY25. Total income, which encompasses other income, rose to Rs 2,159 crore.

Contribution profit, calculated as sales revenue minus all variable costs, surged by 52% to Rs 1,151 crore, with the contribution margin expanding to 60%, up from 50% a year prior. Total expenses were recorded at Rs 2,016 crore, which is 19% lower than the Rs 2,476 crore reported in the same quarter last year, thanks to stricter control over employee and marketing expenditures.

Net payment revenue increased by 38% to Rs 529 crore, fueled by a growing base of high-quality subscription merchants and improved payment processing economics, as stated by the company on Tuesday.

On a sequential basis, payments revenue remained relatively stable. The number of subscription-based merchant devices reached a record high of 1.3 crore during the quarter. Additionally, a reduction in capital expenditures through optimized device costs and enhanced field sales productivity contributed positively to the bottom line.

Financial services revenue doubled to Rs 561 crore, primarily driven by growth in merchant loans, trail income from legacy portfolios supported by default loss guarantees, and enhanced collection efficiency.

Although personal loan disbursements may have decreased due to the RBI’s stricter approach to unsecured lending and default loss guarantee frameworks, the merchant lending sector continued to experience robust growth through strategic partnerships. In comparison to Q4FY25, the revenue from financial services experienced a sequential increase, indicating a consistent recovery and greater credit access for small businesses.

At the conclusion of the quarter, the company reported a cash balance of Rs 12,872 crore, which offers the financial flexibility needed to enhance merchant payments, broaden the distribution of financial services, and invest in AI-driven innovations.