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One 97
Our verdict on One 97 isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
Management reiterated their commitment to the wallet license application with the RBI, though no specific timeline for the relaunch was provided. (1 in progress across 1 tracked commitment)
“And wallet wise, as a promise, I would rather say as a promise, we will bring the wallet back home.”
Management plans to scale the insurance business as part of the financial services stack over the next three years. — target: Integration into stack
“And then in due course, hopefully, we are able to make insurance also as a part of this stack. So this stack now in next three years, we'll start to show, we'll try finding which countries can go in a different working model.”
The company aims to be among the top five players in the wealth management/brokerage segment. — target: Top five (+4 more commitments)
“I've said it in our last earnings call that we want to see ourselves in the top five sooner than later. And that remains a focus area individually for me also.”
Management targets reaching 250 million monetizable customers over the next three to four years. — target: 250 million customers
“I'm going to say about 250 million customers is a good number for us to aim for. I mean, what percentage of the market would it be? That's for the market to discover. But at the same point of time, I fundamentally believe we today's monetization machinery have the ability to monetize 250 million customers.”
Management expects merchant loan penetration to potentially reach 20% of the merchant base. — target: 20% (+1 more commitment)
“This number could get as high as 20%. Our whitelist base is 40 to 50%, typically.”
See the full cited Management analysis of One 97
How durable is the business?
This segment saw massive growth, doubling its revenue YoY to ₹561 Cr. Growth was primarily driven by merchant loans and trail revenue from the Default Loss Guarantee (DLG) portfolio. (4 expanding, 1 shifted)
“In Q1 FY 2026, distribution of financial services revenue grew 100% YoY to ₹561 Cr, driven by continued expansion in merchant loans, trail revenue from Default Loss Guarantee (DLG) portfolio”
The merchant network moat is expanding, with device subscriptions reaching a record 1.30 Crore, an increase of 21 lakh over the previous year. (4 expanding, 1 shifted)
“The best part is that we don't own the book... We become the channel. Now, the most logical captive customer of the customer is the merchant where we are capturing everyday payment flow is ‘us’”
Revenue declined by 23% YoY to ₹247 Cr. Even on a like-to-like basis (adjusting for the sale of the entertainment ticketing business), revenue was down 12% due to lower monthly transacting users. (1 contracting, 3 expanding)
“Subscription merchants reached 1.51 Cr... Soundbox is no longer a payment confirmation device alone, but a small business operating system”
The distribution moat is being reinforced by a refusal to seek an NBFC license. Paytm is doubling down on its 'pure technology platform' model, aggregating multiple bank balance sheets rather than taking credit risk itself. (1 stable)
“The short answer is we're not super excited about going for an NBFC license... we are a pure technology platform which helps different people disburse.”
The segment is shifting away from First Loss Default Guarantee (FLDG) structures toward a pure distribution model. While merchant loans are growing, personal loans are facing a 'drag' due to industry-wide credit cycles. Financial Services revenue was ₹561 Crores, impacted by the reduction in DLG-based income. (1 shifted)
“if you read Financial Services Revenue Rs 561 Crores, it is overall, if you see quarter on quarter, and the number is, because of DLG not being there, this number is lesser.”
See the full cited Business Model analysis of One 97
Where does growth come from?
Paytm is positioning 'Wealth Management' and retail broking as its 'third pillar' of growth, aiming to become a top five player in the segment. — Wealth Management Market Share: Accelerating (+1 more signal)
“It is critical for us to make it a third leg of growth... we want to see ourselves in the top five sooner than later.”
Paytm is seeing a recovery in user engagement with Monthly Transacting Users (MTU) reaching 7.4 Cr. While MTU is down slightly YoY, it has grown sequentially from 7.2 Cr in March 2025, indicating a reversal of the previous decline. (2 accelerating, 1 steady across 3 signals)
“Subscription merchants reached 1.51 Cr. We added 27 lakh net devices YoY. With increase in lifetime value, we have passed on some of the benefits of reduction in device cost to our most engaged device merchants.”
The relaunch of Postpaid is showing a new, highly positive trend, reaching average performance levels in just 1.5 years of equivalent development time despite being in early stages. (1 new trend, 4 steady across 5 signals)
“We continue to see strong growth from both new and repeat borrowers, with repeat borrowers contributing more than 50% of disbursements.”
Paytm's core payment processing margins have improved significantly, staying above 4 basis points (a basis point is 1/100th of a percent) even after government subsidies ended. — Net Payment Margin: 50-60% (Processing Margin) (+1 more signal)
“Good to see, you know, nine basis points overall. You've said that it's remained above four basis points despite the PIDF subsidies going away.”
A potential limit to growth is the discontinuation of government incentive schemes (like PIDF) and the uncertainty around the timing of UPI incentives, which can impact reported profit numbers. — PIDF and UPI Incentive impact: -80% YoY for PIDF
“Reported numbers are impacted by the discontinuation of the PIDF scheme, and FY 2026 UPI incentive is yet to be finalised. We were able to achieve our guidance of 30-40% offset of PIDF impact in Q4 FY 2026.”
See the full cited Future Growth analysis of One 97
What could break the thesis?
The risk is easing as the company is intentionally pivoting away from pure personal loan distribution toward 'Buy Now, Pay Later' (BNPL) and merchant lending, which they view as higher quality and more integrated into their ecosystem. (1 easing, 1 stable)
“we are lending to a segment where they are okay to borrow at that 25-30% rough IRR for them now”
The risk is easing as management reports that their credit card on UPI market share is significantly better than their generic UPI market share, and they are seeing consistent improvement in payment processing margins. (1 easing)
“you've seen the whole industry credit card growth is just moderated right now due to single digit... Now that industry is down to 7 to 10, are you observing a similar moderation”
The risk appears to be easing as the company reported a return to PAT profitability (₹123 Cr) and is seeing 'early signs of user growth and retention' despite low marketing spends. (3 easing, 1 stable, 1 resolved)
“PPBL ban, I know it's an associate for you... in terms of just any early impact on your listed entity OCL, just because you share a common brand in terms of consumer or merchant acquisition or churn.”
The company is spending more on sales and service staff to expand into smaller Indian cities, which increases fixed costs even if revenue growth slows down. [EXECUTION]
“Sales and service employee costs increased as we continue to invest in deepening our presence in tier-2 and tier-3 cities”
The risk is stable; while revenue from financial services grew 63% YoY, the company is seeing high repeat rates (50%) and is relying on AI models to predict churn and delinquencies to manage asset quality. (3 stable)
“More than 50% of loans were issued to repeat borrowers... supported by Paytm’s advanced AI models that intelligently predict merchant churn and delinquencies”
See the full cited Risk analysis of One 97
One 97 analysis by filing period
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