Paytm Stock Gains 3.5% as Q1 Net Profit Reaches Rs.123 Cr, Margins Improve

Fintech major Paytm swings to profit in Q1FY26 with strong lending growth and cost control; IT and digital finance stocks react positively.

One 97 Communications Ltd (Paytm) on July 22 reported a consolidated net profit of ₹123 crore for the June 2025 quarter (Q1FY26), marking a sharp turnaround from a loss of ₹839 crore in the same period last year. Revenue from operations jumped 28% year-on-year to ₹1,918 crore, led by a rebound in payments and lending, along with strict cost controls. This is Paytm’s first quarterly profit post the Reserve Bank of India’s January 2024 directive to wind down its banking operations.

The sharp swing to profitability signals Paytm’s successful transition to an asset-light, merchant-focused model and positions it favorably in India’s growing fintech landscape. For traders and investors, the earnings reinforce confidence in the company’s pivot towards high-margin distribution-led financial services, especially in the wake of regulatory setbacks.

Check This: Paytm Stock Price

Market Reaction and Technical Outlook

Paytm shares surged 3.5% to ₹1,053 on the BSE post-earnings, reflecting bullish sentiment after the profit beat. Delivery volumes spiked, and options data showed increased open interest on 1,050 and 1,100 Call strikes, suggesting further upside bias.

Technically, Paytm stock has crossed above its 50-day moving average, with RSI nearing 64, indicating a bullish momentum setup. Analysts note support at ₹1,000 and resistance near ₹1,120, with a breakout above likely to trigger fresh longs.

Brokerages are expected to revise upward earnings estimates if profitability sustains over upcoming quarters. While no new F&O positions were reported, sentiment across digital finance peers improved after the print.

Broader Sector and Index Impact

The strong results lifted sentiment in Nifty IT and Digital India-focused counters. Stocks such as PB Fintech, Policybazaar, and Nazara Technologies saw intraday gains of 1–2%.

The Nifty 50 index remained flat but Nifty Fin Services closed 0.9% higher. Foreign institutional investors (FIIs) were net buyers worth ₹1,140 crore, with inflows seen in new-age tech and private banks. Traders noted renewed interest in fintech allocations amid improving profitability metrics.

Trading Sentiment and Watchlist Ahead

With the EBITDA turning positive at ₹72 crore and contribution margin expanding to 60%, Paytm has signaled operational resilience post-RBI disruption. Management also highlighted a cash balance of ₹12,872 crore, offering capital cushion for AI-driven product expansion and merchant growth.

Short-term outlook remains positive with momentum traders eyeing the ₹1,100–1,120 zone. Medium-term upside depends on continued margin expansion, regulatory clarity, and execution of AI-led initiatives in financial services.

Stocks to watch:

• Paytm (Watch ₹1,100 breakout)

• PB Fintech (Support ₹1,050, potential for ₹1,120)

• Policybazaar (Resistance ₹1,190, bullish setup emerging)

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