Paytm Releases Earnings Call Transcript for Q2 FY27

One 97 Communications Limited (Paytm) has released the transcript of its earnings conference call held on October 27, 2026. The call discussed the unaudited standalone and consolidated financial results for the quarter and half-year ended September 30, 2026.

During the call, Vijay Shekhar Sharma, Founder and CEO, emphasized that Paytm has demonstrated its ability to achieve profitability, with its business model compounding through customer acquisition via payments and cross-selling financial services, particularly credit to small merchants. He highlighted the company's purpose to build a financial system for small businesses globally, starting with India. The strategy involves acquiring customers through payments, generating revenue from credit, deepening relationships with insurance and wealth management, and leveraging AI. Sharma also detailed the development of an AI stack for small merchants, aiming to provide them with capabilities previously exclusive to large corporations, with monetization expected to begin within a year.

In the Q&A session, discussions revolved around the potential 2.5 bps improvement in payment processing margins due to MDR implementation on UPI, which is expected to be bottom-line accretive without altering consumer acquisition strategies. Management confirmed that this could translate to incremental EBITDA of around 700-900 crore by FY28. The company is also focusing on an AI platform for enterprise merchants, potentially utilizing subscription and transaction fee models. They are committed to aggressive market share acquisition, driven by product features and partnerships rather than solely marketing spends.

Regarding loan distribution, Paytm has shifted its consumer loan model to pure distribution without taking on additional risk, leading to strong revenue growth in this segment. The company remains largely indifferent to the Debt Loss Guarantee (DLG) mix, focusing on facilitating more lending and capital availability. Management expressed confidence in their ability to manage DLGs effectively and stated that the operational readiness for MDR on UPI is in place across the industry, awaiting a final decision on the implementation date.

The devices business continues to see strong rollout, with a focus on high-potential merchants for financial services. While core businesses like payments and financial services are experiencing significant tailwinds, minor headwinds were noted in the equity trading, travel, and wealth management segments. Overall revenue growth momentum is positive, with reported growth around 28%, and potentially in the 30s excluding prior year's PIDF.

Net payment margins, excluding UPI, were reported at 9 basis points for the quarter. The company views MDR on UPI as an upside rather than a fundamental change to its business model, with financial services remaining the primary monetization driver. Capex for device rollout is expected to remain around ₹400 crore, with a focus on merchant engagement and retention.