One 97 Communications Posts ₹1.23 Billion Profit In April-June, Beats Estimate

One 97 Communications Ltd. swung to a net profit of ₹1.23 billion in the June quarter—its second quarterly profit since listing in 2021—driven by strong revenue growth and lower expenses. The fintech firm, which owns the Paytm brand, had reported its first-ever profit in the September 2024 quarter after exiting the ticketing business.

Revenue from operations rose 27.7% on year to ₹19.18 billion, while total expenses fell 18.6% sequentially and 6.4% on year to ₹20.16 billion. The corresponding quarter last year was hit by regulatory action from the Reserve Bank of India and saw a record loss of ₹8.39 billion.

The company posted EBITDA of ₹720 million, compared with an operating loss of ₹880 million in the previous quarter. ESOP costs dropped sharply to ₹300 million from ₹1.69 billion in Jan-Mar, after CEO Vijay Shekhar Sharma voluntarily surrendered his 21 million ESOPs earlier this year. It expects ESOP expenses to range between ₹2.50 billion and ₹2.75 billion for 2025–26.

Segment-wise, income from payment services grew 18% on year to ₹10.44 billion, while financial services revenue doubled to ₹5.61 billion. Revenue from marketing services fell both sequentially and on year to ₹2.47 billion.

The contribution margin improved to 60% in April-June from 56% in the March quarter and 50% a year ago, driven by better net payment revenues, a higher share of financial services income, and lower direct costs.

One 97 Communications added 600,000 new merchants during the quarter, taking the total to 13 million as of June 30. Capex stood at ₹790 million for the quarter. The company said it is focusing on operational efficiency, device cost reduction, and expanding in tier-2 and tier-3 cities.

The board approved the appointment of Urvashi Sahai as whole-time director and key managerial personnel for five years, and noted the resignation of independent director Bimal Julka.