Paytm Q4 Results Preview: One 97 Communications may swing to profits despite up to 13% likely drop in revenues

One 97 Communications, which operates fintech platform Paytm, will announce its Q4FY25 earnings on Tuesday, with some brokerages expecting the company to swing into profits. Profit after tax (PAT) is estimated to range between Rs 3.6 crore and Rs 4.5 crore, according to JM Financial and Yes Securities.

However, Motilal Oswal Financial Services (MOFSL) projects a net loss of Rs 112 crore for the January–March quarter, though it expects the loss to narrow both year-on-year and sequentially.

Paytm’s Q4FY25 revenue is likely to decline 3% to 13%, translating to a topline between Rs 1,975 crore and Rs 2,199 crore.

Among the brokerages, JM Financial has the most conservative revenue estimate, while Yes Securities is the most optimistic.

Here’s what brokerages recommended:

JM Financial
One 97 Communications is expected to post a net profit of Rs 4.5 crore for the quarter ended March 31, 2025, compared to a loss of Rs 551 crore in the year-ago period and a loss of Rs 208 crore in Q3FY25.

Paytm’s Q4FY25 revenue is estimated at Rs 1,975 crore, reflecting a 13% YoY decline but an 8% QoQ growth.

EBITDA is likely to remain negative at Rs 65 crore, though that marks a 71% improvement both YoY and QoQ. The EBITDA margin is projected to improve by 660 bps YoY and 889 bps QoQ, though it would still remain negative at 3.3%.

JM estimates the company’s contribution profit at Rs 1,108 crore, a 14% YoY decline but a 15.6% QoQ increase, indicating improving cost efficiencies and operational momentum.

“On a consolidated basis, revenue (including Rs 100 crore UPI incentive) is expected to grow around 8% QoQ. Contribution margin is expected to expand by 370 bps QoQ, driven by a rising share of financial services — particularly from higher take-rates under the DLG model in merchant loans,” JM said in its note.

The brokerage expects better operating leverage due to lower employee costs to push Paytm into adjusted EBITDA positive territory, with an adjusted EBITDA margin of 6.1%.

Yes Securities
Yes Securities also expects Paytm to report a positive PAT in Q4FY25. It estimates revenue at Rs 2,199 crore, marking a 3% YoY decline but a 20% sequential growth.

EBITDA is projected at Rs 15.2 crore.
The brokerage clarified that the YoY revenue drop factors in the UPI incentive.

On the cost side, Payment Processing Charges (PPC) as a percentage of Payments Revenue is expected to be 51%, down from 56.9% in Q3, largely due to the incentive.

“We arrive at total expenses (excluding PPC and ESOP expense) rising 5% QoQ, compared with a 2% decline in Q3FY25, resulting in an EBITDA margin (excl. other income and pre-ESOP cost) of 10%, up 1200 bps QoQ,” the preview note said.

Motilal Oswal Financial Services (MOFSL)
Motilal Oswal expects Paytm to post a net loss of Rs 112 crore, though the loss is likely to narrow on both YoY and QoQ bases.

Revenue is projected at Rs 2,098 crore, down 7.5% YoY and up 15% QoQ.

The brokerage expects operating profitability to improve, driven by lower depreciation costs. It also sees sequential growth in disbursements and GMV.

The note added that revenue growth would be aided by the UPI incentive, and that EBITDA guidance would be a key monitorable going forward.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)