India's Paytm forecasts higher revenue growth in FY 2027

BENGALURU, May 6 (Reuters) - Indian ‌fintech firm Paytm ​said ​it expects to grow faster in fiscal 2027 than in the previous year, banking on gains in market share in merchant ‌and consumer payments and growth in the distribution of its financial ⁠services.

The company also expects its margins to expand in the current financial year, helped ‌by tight control on indirect ‌expenses such as marketing and software costs.

"Revenue growth in FY 2027 expected to be higher than the 22% delivered in FY 2026 and indirect ​expenses will grow meaningfully slower than revenue," Paytm said in a statement.

Following the central bank-mandated curbs on its payments bank in 2024, the ⁠company has refocused on its broader payments and financial services distribution businesses, driving growth through a shift toward ​higher-quality merchants and more scalable, fee-based revenue streams.

The digital payments firm posted consolidated net profit of 1.84 billion rupees for ​the quarter ended March 31, compared with ‌a loss of 5.4 billion rupees a year earlier.

In the year-ago quarter, its results were affected by a one-time expense ⁠on charges related to CEO Vijay Shekhar Sharma giving up his employee stock options.

Revenue from operations rose 18.4% to 22.64 billion rupees year-on-year, driven by a 21% ⁠increase in payments services and a 38% rise in financial services distribution revenue.

Contribution margin, a ​key profitability metric, stood at 55%, compared with 56% a year earlier.

However, profitability was impacted by the discontinuation of the Payments Infrastructure Development Fund (PIDF), a scheme by the ‌Reserve Bank of India that subsidised deployment of payment devices.

Growth and profitability improved substantially, excluding the impact of the ‌scheme, the company said.

Separately, the RBI last month cancelled Paytm Payments Bank's licence, ⁠citing persistent compliance lapses.

Paytm said the ‌move has had no ​impact on its business or financials.

($1 = 94.6100 Indian rupees)

(Reporting by Nishit Navin and Surbhi Misra; Editing by Ronojoy Mazumdar and ‌Shreya Biswas)

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