1. At a Glance
Paytm (aka One 97 Communications) is India’s OG fintech gladiator. After a brutal listing, Q1 FY26 shows a spark of life with a ₹122 Cr PAT—the first green in a long, blood-red Excel sheet. But with negative ROE, other income doing all the heavy lifting, and IPO proceeds still unspent, one question lingers: Are we back to believing in unicorn fairy tales?
2. Introduction with Hook
Picture this: a unicorn with a limp but wearing Gucci shades. That’s Paytm. It’s lost billions, been meme’d into oblivion, and yet—like Bollywood villains—it just won’t die. Why?
- Q1 FY26 PAT: ₹122 Cr (finally!)
- 3Y sales CAGR: 12%
- ROE: -10%
- Market Cap: ₹67,051 Cr
- IPO proceeds still partially chilling in the bank
3. Business Model (WTF Do They Even Do?)
They started as a recharge app. Then:
- Payments (UPI, QR, Wallets, Soundbox)
- Merchant Acquiring – 4.2 Cr merchants, 112 lakh devices
- Financial Services – BNPL, loans via partners, insurance
- Commerce & Cloud – Ticketing, loyalty, SaaS, offers
- Paytm Money – Mutual funds, F&O, stockbroking
It’s a digital supermarket. But profitability? That’s in aisle 404.
4. Financials Overview
Annual Trend (₹ Cr):
| Year | Sales | EBITDA | PAT | EPS | OPM % |
|---|---|---|---|---|---|
| FY23 | 7,990 | -1,644 | -1,776 | -28.02 | -21% |
| FY24 | 9,978 | -943 | -1,422 | -22.30 | -9% |
| FY25 | 6,900 | -1,506 | -663 | -10.33 | -22% |
| TTM | 7,316 | -643 | +299 | +4.77 | -9% |
Observation:
- Losses are shrinking, but positive PAT is from other income
- Core business still leaking like an unsecured UPI API
5. Valuation
| Metric | Value |
|---|---|
| CMP | ₹1,051 |
| Book Value | ₹236 |
| P/B | 4.46x |
| P/E | NA (invisible for most of history) |
| ROE | -10.3% |
Fair Value Range (Guesstimate):
- P/B 2.5–3.5x → ₹590 – ₹820
- Revenue Multiple Method (~5x Rev) → ₹950 – ₹1,100
Conclusion: Market is baking in future profits, or just being nostalgic.
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26 PAT at ₹122 Cr (finally above zero, clap pls)
- ₹6,119 Cr of IPO proceeds used, ₹2,000 Cr still untouched
- ₹800 Cr EPC contract in Noida—pivot to IT infra?
- Massive management reshuffle: new WTD appointed
- ROE/ROCE remain negative, but UPI volumes steady
- Most fintech rivals (Mobikwik, Suvidha) are far behind in scale
7. Balance Sheet
| Item | FY23 | FY24 | FY25 |
|---|---|---|---|
| Net Worth | ₹13,015 Cr | ₹13,327 Cr | ₹15,027 Cr |
| Borrowings | ₹223 Cr | ₹177 Cr | ₹160 Cr |
| Total Assets | ₹17,966 Cr | ₹17,139 Cr | ₹21,448 Cr |
| Cash & Inv. | ₹7,325 Cr | ₹4,628 Cr | ₹4,172 Cr |
Key Insight:
Cash-rich. Debt-free. But the return on those assets? More meh than wow.
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Cash |
|---|---|---|---|---|
| FY23 | ₹416 Cr | ₹2,628 Cr | -₹1,112 Cr | ₹1,931 Cr |
| FY24 | ₹651 Cr | ₹338 Cr | -₹22 Cr | ₹967 Cr |
| FY25 | -₹121 Cr | -₹2,043 Cr | -₹53 Cr | -₹2,217 Cr |
Verdict:
Cash burn is back. CAPEX + investments + weak operations = draining runway.
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | -12% | -8% | -10% |
| ROCE | -22% | -8% | -10.1% |
| Interest Cover | NA | NA | NA |
| Debtor Days | 57 | 60 | 69 |
Conclusion:
Still in financial ICU. Improvement? Yes. Recovery? Far away.
10. P&L Breakdown – Show Me the Money
| Year | Sales | EBITDA | Other Income | PAT | EPS |
|---|---|---|---|---|---|
| FY24 | ₹9,978 Cr | -₹943 Cr | ₹314 Cr | -₹1,422 Cr | -₹22.30 |
| FY25 | ₹6,900 Cr | -₹1,506 Cr | ₹1,550 Cr | -₹663 Cr | -₹10.33 |
| Q1 FY26 | ₹1,918 Cr | ₹72 Cr | ₹225 Cr | ₹122 Cr | ₹1.92 |
Red Flag:
Other income saved the day. Operating profitability is a mirage… for now.
11. Peer Comparison
| Company | P/E | ROE % | PAT (₹ Cr) | CMP / BV | OPM % |
|---|---|---|---|---|---|
| PB Fintech | 265x | 5.13 | ₹315 Cr | 13.0x | 1.88% |
| One 97 (Paytm) | NA | -10.3 | ₹299 Cr | 4.46x | -9% |
| Infibeam Avenues | 23.4x | 6.18 | ₹222 Cr | 1.51x | 7.6% |
| Mobikwik | NA | -31.2 | -₹122 Cr | 3.42x | -9.2% |
Conclusion:
Not alone in its struggle—but certainly priced higher than peers relative to returns.
12. Miscellaneous – Shareholding, Promoters
| Category | Sep ’22 | Mar ’24 | Jun ’25 |
|---|---|---|---|
| FIIs | 77.3% | 60.4% | 54.9% |
| DIIs | 1.3% | 6.8% | 15.8% |
| Public | 21.4% | 32.8% | 29.3% |
Key Points:
- FIIs steadily exiting
- DIIs ramping up exposure
- Public holding peaked around bottom (classic)
- No promoters = no skin in the game, just ESOPs and hope
13. EduInvesting Verdict™
Paytm is the classic Bollywood underdog—beaten down, booed off IPO stage, but now showing signs of a slow turnaround.
Core business is still bleeding, but other income and reduced cash burn offer a glimmer of hope. If they hit operating breakeven by FY27 and unlock lending monetization with RBI blessing, this could work.
But for now? Enjoy the drama. Don’t bet your rent.
Metadata
– Written by EduInvesting Team | 23 July 2025
– Tags: One 97 Communications, Paytm, Fintech, Q1 FY26, Digital Payments, EduInvesting
