A year ago, delivering quarterly profit seemed like a distant dream for Paytm. Hit by the RBI’s crackdown on the fintech major’s associate, Paytm Payments Bank, in January 2024, the company seemed to be in a state of doldrums.

Degrowth in revenue, decline in the number of merchants and rising losses hurt the company for the most part of 2024. It reported a consolidated net loss of INR 840 Cr in the first quarter of FY25.

Now, a year later, the Vijay Shekhar Sharma-led company has reported a net profit of INR 122.5 Cr in Q1 FY26. While the company did post a profit of INR 930 Cr in Q2 FY25, it was due to the sale of its entertainment ticketing business to Eternal (then Zomato).

So, what changed over the past year? The answer is it decided to bring back its focus on the payments business.

In a bid to become a super app with multiple offerings, Paytm probably diversified a bit too much. The regulatory crackdown gave it an opportunity to relook at its business. Consequently, Paytm decided to exit the non-core business.

Over the last year, it sold Paytm Insider to Zomato and its stake in Australian-based PayPay to SoftBank. To outline the company’s future course of action, CEO Sharma reiterated multiple times that it is focussed on payments.

“Keeping the payments-led super app concept is better than calling super app first, payments second,” he said in the Q4 FY25 earnings call.

The move to double down on the payments vertical, coupled with the use of AI to cut costs, is finally showing results.........

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