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Paytm parent slides after strong June-quarter results amid MDR uncertainty
LiveMint says Paytm’s Q1FY27 GMV rose 31% year on year to ₹7.1 trillion, but the outlook for MDR charges on UPI and a potential wallet licence, plus AI monetization, are key to any further re-rating.
Paytm’s parent, One 97 Communications Ltd, fell about 4% after reporting strong June quarter results, which LiveMint attributes partly to profit booking following a sharp July rally of nearly 18% tied to rumors of a reintroduction of merchant discount rate charges on UPI transactions. The finance ministry has made no official announcement so far, leaving MDR on UPI in limbo.
LiveMint reports that Q1FY27 gross merchandise value grew 31% year on year to ₹7.1 trillion, with net payment processing margin rising to 4 bps from 3 bps a year earlier as the mix shifted toward MDR bearing instruments such as RuPay credit cards on UPI and EMI transactions. Income from the distribution of financial services increased 45% to ₹814 crore, while comparable EBITDA rose 182% year on year to ₹203 crore and margin expanded by 700 bps to 8%.
The quarter also showed cost restraint, with other indirect expenses down 19% year on year to ₹167 crore. Management said there is visibility to reach an EBITDA margin target of 15% to 20% over the next couple of years.
LiveMint adds that further stock re-rating hinges on developments beyond the core payments performance, including whether MDR charges on UPI are implemented, and any announcement around securing a wallet licence. The report also highlights that significant EBITDA growth depends on monetizing Paytm’s in-house AI tools with third parties, while competition risks for payment processing and loan distribution could intensify if AI revenue does not materialize.