The share price of Paytm is in focus today (May 7) after the fintech company reported a turnaround in its Q4FY26 and posted its first-ever annual profit.
The stock surged 6% during intraday trade as investors reacted to improving profitability, stronger revenue momentum and a positive outlook from global brokerage house Jefferies.
The rally came after One97 Communications, the parent company of Paytm, reported a consolidated net profit of Rs 184 crore for the fourth quarter of FY26. This was a major improvement compared to a loss of Rs 540 crore reported in the same period last year.
The company also reported its first full-year profit after tax of Rs 552 crore for FY26.
Why is the Paytm stock rallying?
The latest rally in Paytm shares comes mainly after the company reported better profitability and steady revenue growth in the March quarter.
Revenue for the quarter rose 18.4% year-on-year to Rs 2,264 crore. At the same time, the company’s Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) turned positive at Rs 132 crore compared to a loss of Rs 88 crore a year ago.
The company said operating leverage and cost discipline helped improve margins during the quarter.
Another key trigger was the improvement in Paytm’s core business segments such as lending distribution, wealth products and merchant payments.
The company’s improving comparable EBITDA performance even without support from Unified Payments Interface (UPI) incentives and Payment Infrastructure Development Fund (PIDF) incentives were key factors to watch.
Jefferies turns positive on Paytm
International brokerage house Jefferies has maintained a ‘Buy’ rating on Paytm after the Q4 results.
The brokerage has set a target price of Rs 1,350 on the stock. This implies an upside potential of around 24% from the current market price.
As per the brokerage report, Paytm’s operational performance remained better than expected despite the absence of some incentives.
Jefferies stated, “Revenue growth of 18% was led by financial services (lending & wealth platform).”
The brokerage also highlighted that contribution margins are gradually stabilising while operating efficiency is helping profitability improve.
According to the brokerage report, “Contribution margin is normalizing, but operational efficiency lifted adjusted EBITDA margins to 8%.”
Jefferies further noted that the company’s revenue momentum could continue supporting earnings growth despite uncertainties around future UPI incentives.
Paytm Q4FY26 recap: Profitability improves sharply
In Q4FY26, Paytm posted a net profit of Rs 184 crore in Q4FY26 against a loss of Rs 540 crore in Q4FY25.
Quarterly revenue stood at Rs 2,264 crore, up 18.4% year-on-year.
Meanwhile, EBITDA came in at Rs 132 crore compared to a loss of Rs 88 crore a year ago, although it was lower than the Rs 156 crore reported in the December quarter.
EBITDA margin improved to around 6% from negative levels last year.
The company also said that comparable EBITDA, excluding UPI and PIDF incentives, improved by nearly Rs 330 crore year-on-year, indicating stronger underlying profitability trends.
ESOP announcements and share allotment
Apart from the earnings, Paytm also announced fresh Employee Stock Option Plan (ESOP) developments through an exchange filing.
The company said its Nomination and Remuneration Committee approved the grant of 1,77,044 stock options to eligible employees under the One 97 Employees Stock Option Scheme 2019.
At the same time, the committee also noted the lapse and cancellation of 4,90,055 stock options.
The company further announced the allotment of 70,504 equity shares to eligible employees following the exercise of vested stock options.
Following this allotment, the paid-up equity share capital of the company increased slightly.
How has Paytm stock performed?
Paytm shares have remained volatile over the past year. The stock has gained around 6% over the last five trading sessions and delivered nearly 14% returns over the past one month.
However, on a year-to-date basis, the stock is still down nearly 9% in 2026 so far.
The company’s 52-week high stands at Rs 1,381.80, while the 52-week low is Rs 808.