Few founders in India have seen the swings —- the ups and the downs — that Vijay Shekhar Sharma has seen with Paytm. The latest high is the company’s turn to profitability in the first quarter of FY26.

It’s a moment that vindicates the belief that Sharma had espoused in mid 2024 when Paytm was still stuck in the weeds. Since then, Paytm has gone through its most significant transformation in years.

The fintech giant reported a consolidated net loss of INR 840 Cr after the June quarter in 2024, but one year later it is in the black with a profit of INR 122.5 Cr in Q1 FY26. What exactly changed in the past 12 months?

It let go of thousands of employees, pressed the accelerator on AI and even scaled back by shedding prominent brands like Paytm Insider. And as Sharma emphasised with each quarterly earnings call, Paytm was focussing on payments again — doubling down on its core identity.

The market’s reaction was euphoric after the Q1 results. Brokerage firm Jefferies, which had maintained a cautious ‘hold’ rating, upgraded Paytm to a ‘buy’, significantly raising its target price. The stock, which was struggling for momentum, surged to a new 52-week high, a clear vote of confidence from investors who had been waiting for a tangible sign of a turnaround.

Let’s unpack how Paytm got there.

The Big Declutter

Sometime around 2018, Paytm realised it had the opportunity to become India’s WeChat or Alibaba. But the super app thesis was riddled with holes in the Indian context.

The payments app expanded into a plethora of services, from movie ticketing to ecommerce, but this diversification had come at a cost. The regulatory crackdown on Paytm Payments Bank in early 2024 was a wake-up call, a moment of reckoning. The result was the big declutter of 2024.

Sharma shelved Paytm’s super app ambitions, and the focus was brought back to the core of the business: payments.

The renewed focus on payments became the bedrock........

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