One 97 — Q4 FY26 earnings call

Call held 7 May 2026

Management summary

One 97 reported a robust Q4 FY26, with GMV growing 27% YoY and net payment margins expanding to 9 bps. The company achieved an EBITDA margin of approximately 6% for FY26. Management highlighted broad-based growth across payments and financial services, with merchant loan penetration reaching 7%. The company is focused on leveraging AI for customer acquisition and retention, and aims for 15-20% EBITDA margins in the medium term, while indirect costs are expected to grow significantly lower than revenue in FY27.

Highlights

  • Q4 GMV grew 27% YoY, indicating strong payment processing growth.

  • FY26 EBITDA margin expanded to approximately 6%, demonstrating strong expansion.

  • Q4 Net Payment Margin improved to 9 bps, up from previously above 4 bps, driven by product improvements and credit instruments on UPI.

  • Merchant loan penetration reached 7% of the merchant base, up from 6% a year ago, showing progress in cross-selling financial services.

  • Device additions grew 22% with 2.7 million new devices, expanding the merchant network.

Concerns

  • Subscription revenue was flat YoY despite 2.7 million new device additions.

  • Management did not provide a specific timeline for the wallet license, stating only 'we remain committed'.

Key financials

  1. EBITDA Margin 6%
  2. Net Payment Margin 9 bps
  3. GMV Growth 27% +27%YoY
  4. Device Additions 2.7 Mn +22%YoY
  5. Merchant Loan Penetration 7%
  6. EBITDA ₹500 Cr
  7. Cashback Investment 1 Bn
  8. EBITDA Growth (QoQ) ₹30 Cr

What they filed

Q1 FY27: revenue down 32.6%, net profit up 193.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,265 1,492 1,599 1,586 1,681 +33%1,553 +4%1,005 −37%1,069 −33%
EBITDA-421 -208 -81 76 88 +121%84 +140%-15 +81%87 +14%
Net profit821 -205 -581 63 -264 −132%145 +171%119 +120%185 +194%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Payments
    55% Revenue Contribution
  • Financial Services
    30% Revenue Contribution

Capital allocation

high confidence
  • Capex Capex disclosed
    Mr. Vijay Shekhar Sharma: There's nothing like we don't have a capex plan yet. I mean, there is enough amount of capex that US big guys are doing, and we don't think that we have a game in that yet. We do believe there is an opportunity for us to invest in Al, equal to like, saying, let's say, you are using agents for our customers. We can rent somewhere the data center, we can rent let's say, NVIDIA's and then run our own model on top of it, that kind of investment. Investment is attention and effort, not just capital. We don't have a material capital investment plan right now on the table or in plan.

Guidance & targets

Profitability

  • EBITDA Margin Profitability · 2.5-3 years from now · High confidence 15-20%
    And EBITDA, we will maintain about two and a half to three years from now, that we should be able to get to those sorts of EBITDA margins.

    — Mr. Madhur Deora

  • Contribution Margins Profitability · Next year · Medium confidence 55-60%
    contribution margins, we should expect between 55 to 60

    — Mr. Madhur Deora

  • Operating Leverage & EBITDA Margin Profitability · Next year · Medium confidence Significant expansion
    we're confident that we would see, we'll look back and say there was significant operating leverage and EBITDA margin expansion as a result.

    — Mr. Madhur Deora

  • EBITDA vs Capex Profitability · Next year · Medium confidence EBITDA significantly higher than capex
    next year we expect EBITDA to be significantly higher than capex

    — Mr. Madhur Deora

Revenue

  • Revenue Growth Revenue · Fiscal 27 · Medium confidence Acceleration
    A bit more colour on the revenue growth acceleration that you've talked about in Fiscal 27.

    — Mr. Manish Adukia

Costs

  • Indirect Cost Growth Costs · Next year · Medium confidence Significantly lower than revenue and contribution profit growth
    if we look outwards towards the next year, we do think that like we have said, this will grow significantly lower than revenue and contribution profit growth and continued operating leverage as a result of that.

    — Mr. Madhur Deora

What to watch in Q1 FY27

Revenue Growth Acceleration

Next quarter (Q1 FY27)
Current Discussed as a target for FY27
Target Evidence of acceleration in Q1 FY27 results

Why it matters

Key to achieving overall growth targets and market expectations, as management guided for acceleration in FY27.

A bit more colour on the revenue growth acceleration that you've talked about in Fiscal 27.

Risks & concerns

  • Regulatory actions (RBI) and wallet license uncertainty

    medium

    Analyst questioned the impact of the PPBL ban on OCL and the timeline for the wallet license, to which management stated 'no impact' and 'committed' but provided no timeline.

    Analyst downplayed

  • Competition in merchant lending distribution

    low

    Analyst raised concerns about competition for distribution partners in merchant lending, but management emphasized their unique position as payment flow owners.

    Analyst acknowledged

Q&A highlights

6 direct, 1 evasive
Guidance on revenue growth acceleration and EBITDA margins Direct
And EBITDA, we will maintain about two and a half to three years from now, that we should be able to get to those sorts of EBITDA margins.

Analyst sought clarity on the drivers of future revenue growth and the path to achieving medium-term EBITDA margin targets.

Asked by Mr. Manish Adukia

Traction of Postpaid vs earlier iteration Partial
Yeah, Manish, better than last time. Classic internet dissemination or diffusion of services style. It took X number of time. This is taking X by a significantly large number of time. I mean, I'm really happy. We will not give disbursements.

Analyst probed for specific metrics on the ramp-up of the Postpaid product, but management declined to provide disbursement numbers, only qualitative improvement.

Asked by Mr. Manish Adukia

Impact of PPBL ban on OCL and wallet license Evasive
Mr. Vijay Shekhar Sharma: I think, no impact. We did a press release on the system. And we remain committed. ... Mr. Vijay Shekhar Sharma: I'd rather put my head down and execute the journey. There is so much on the plate and table that I would say that ambiguity is behind us.

Analyst questioned the impact of regulatory actions on the listed entity and the timeline for the wallet license, receiving a commitment but no specific timeline or details.

Asked by Mr. Manish Adukia

Higher proportional and cashback incentives vs MTU growth Direct
I think it is the marketing services where you sort of expect, let's say, our commerce line items to do a good job, but it is going in expansion and cleanup of our existing customers, trying towards other services beyond just marketing services. For example, there is digital gold on our platform. There is an element of discount, gift vouchers.

Analyst questioned the effectiveness of increased cashback spend without corresponding growth in monthly transacting users (MTU), leading to management's explanation of focusing on high-quality customer acquisition and strategic spend.

Asked by Mr. Pranav Kshatriya

Indirect cost trend Direct
But, if we look outwards towards the next year, we do think that like we have said, this will grow significantly lower than revenue and contribution profit growth and continued operating leverage as a result of that.

Analyst sought clarity on the trajectory of indirect costs, especially with expected employee cost increases, and management provided guidance on operating leverage.

Asked by Mr. Pranav Kshatriya

Drivers for net payment margin increase Direct
I think there's a whole bunch of smaller factors, but the two major factors, especially when we think about payment processing margin, which is what we have said is higher than four bps. The two major factors are our product improvements, giving us the luxury of having pricing discipline. So, we have talked about pricing discipline in the presentation, but the underlying piece is that our product keeps getting better and better, and as a result, customers, merchants in this case, are seeing more value in our product.

Analyst asked for the specific reasons behind the significant improvement in net payment margins, which is a key profitability metric.

Asked by Mr. Vijit Jain

Paytm Money (broking) product investments and AI impact Direct
I mean, obviously, the Al is changing everything, my friend. I mean, the agents will show up, that will do trading. Agents will take care of your portfolio readjustment. Agents will show up and the trading strategy of yours will be reviewed. Agents will create option chains for you. Agents will create a scalper.

Analyst inquired about future product development in the broking segment, leading to management's strong emphasis on AI's transformative role and a complete reset of the approach.

Asked by Mr. Vijit Jain

Subscription revenue not growing despite device additions Direct
It is the case that PIDF has an impact, and it is also the case that without adjusting for that, the device subscription per device overall is slightly lower, but we do see this as a very good funnel to merchant lending.

Analyst highlighted a discrepancy between device growth and flat subscription revenue, prompting management to explain the impact of PIDF and the strategic role of devices as a funnel for lending.

Asked by Mr. Jayant Kharote

2 min read 6 chapters

Detailed narrative

Q4 FY26 Performance and FY26 Overview

One 97 reported a strong Q4 FY26, with Gross Merchandise Value (GMV) growing 27% year-on-year. The company's net payment margin improved significantly to 9 basis points, up from previously above 4 basis points. For the full fiscal year 2026, the company achieved an EBITDA margin of approximately 6%, demonstrating strong expansion. Device additions continued robustly, with 2.7 million new devices added, representing a 22% growth on the existing base.

Revenue Growth Drivers and Segment Performance

The company's revenue growth is broad-based, with payments contributing about 55% and financial services contributing about 30% of the total revenue. Management expects revenue growth to accelerate in Fiscal 27, driven by tailwinds in both online and offline payments, as well as strong growth in financial services. Merchant loans continue to be solid, and there is recovery in personal loans and market share growth in wealth management.

Profitability and Margin Expansion Strategy

One 97 is focused on achieving a medium-term aspirational EBITDA margin of 15-20% within two and a half to three years. The improvement in net payment margins is attributed to product enhancements, which allow for pricing discipline, and a shift towards credit instruments on UPI rails. The company also expects indirect costs to grow significantly lower than revenue and contribution profit growth in the next year, leading to continued operating leverage and EBITDA margin expansion.

Financial Services and Merchant Lending

The company's financial services strategy revolves around merchant loans, personal loans, and wealth management. Merchant loan penetration currently stands at 7% of the merchant base, up from 6% a year ago, indicating a 15% increase. Management sees significant room for expansion in this area. The growth in merchant lending is driven by base expansion, penetration rate increase, and higher ticket sizes, with the core business remaining intact while expanding the total addressable market.

AI Integration and Future Opportunities

AI is viewed as a transformative force for Paytm, impacting all aspects from customer acquisition to trading and portfolio management. Management believes AI will enable the creation of 'agents' for various financial services, making the proposition more compelling. While there are no material capital expenditure plans for AI, the company is open to selective inorganic actions specifically in the AI space, focusing on improving existing businesses rather than entirely new lines.

Capital Allocation and Regulatory Stance

For FY26, the company's EBITDA was 500 crores, and capex was less than this amount. Management expects FY27 EBITDA to be significantly higher than capex. Regarding regulatory matters, particularly the Paytm Payments Bank ban and the wallet license, management stated there was 'no impact' on the listed entity and reiterated their commitment to the wallet license, though no specific timeline was provided. The company prefers its current model of being a technology platform facilitating disbursements through partners rather than becoming a credit issuing entity itself.

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