One 97 Communications (Paytm) shares fell for the seventh straight session on 22 July, taking their cumulative decline to around 8% over the past seven trading sessions. The stock dropped 2% on Wednesday, extending its losing streak as investors continued to react to the company's June quarter (Q1 FY27) earnings and its decision to shelve its first-ever bonus share issue. According to LiveMint, the Vijay Shekhar Sharma-led fintech company's board announced the Q1 FY27 results after market hours on Monday, 20 July, with the stock falling another 2% on Wednesday. Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, noted that Paytm has corrected nearly 8% from its recent high of ₹1,407, reached on 15 July, reflecting healthy profit-booking after a strong rally between early June and mid-July.
Paytm delivered better-than-expected performance for the June quarter, with consolidated net profit of ₹220 crore beating Bloomberg's estimate of ₹188 crore. Revenue rose to ₹2,448 crore, beating the consensus estimate of ₹2,375 crore, while EBITDA came in at ₹203 crore, well above the expected ₹178 crore. The company achieved its highest-ever quarterly EBITDA of ₹203 crore, up 182% from a year ago and 54% from the previous quarter, with EBITDA margin improving to 8% from 6% in the previous quarter. Sequentially, profit increased 20% from ₹184 crore, revenue rose 8% from ₹2,264 crore, while EBITDA surged 54% from ₹132 crore. The company's merchant gross merchandise value growth accelerated during the quarter, with revenue expansion led by financial services and payment services businesses.
According to SBI Securities, the stock's Relative Strength Index (RSI) has eased from the overbought zone of 80 to around 59, indicating a pause in bullish momentum rather than a reversal of the broader trend. The Average Directional Index (ADX) has flattened near 45—its highest level since March 2026—suggesting that the strength of the prevailing uptrend has moderated. Sudeep Shah believes the stock has found support around its 20-day exponential moving average (EMA), making the ₹1,275-1,270 zone a key technical level to watch. He added that sustaining above this support could pave the way for a fresh rebound, while a decisive break below it could extend the ongoing correction. The stock had opened at ₹1,337 and touched an intraday high of ₹1,382.40 before the recent decline.
The board's decision to shelve the bonus share issue proposal was taken at its meeting held on July 20, where directors also approved the unaudited standalone and consolidated financial results for the quarter ended June 30, 2026. As reported by the company, the board evaluated the bonus issue proposal from the perspective of long-term shareholder value creation and decided not to proceed with the bonus issue at this stage. The company stated that its immediate priority remains accelerating business growth and improving long-term profitability. According to the Board, reinvesting in the business is currently a better strategy for creating sustainable value for shareholders than issuing bonus shares. This announcement comes after Paytm completed an open-market share buyback worth ₹850 crore in December 2022.
Operationally, gross merchandise value (GMV) increased 31% YoY to ₹7.1 lakh crore, while merchant transactions rose 28% YoY to 1,669 crore and total transactions increased 36% YoY to 1,989 crore. The number of registered merchants grew 12% YoY to 5 crore, subscription merchants increased 21% YoY to 1.57 crore, and key financial services customers rose 34% YoY to 7.6 lakh. Payment Services revenue increased 33% YoY to ₹1,384 crore, while Distribution of Financial Services revenue rose 45% YoY to ₹814 crore. The average number of sales employees increased 12% YoY to 43,715. Looking ahead, the company said AI-led operating leverage, accelerating revenue growth and expanding EBITDA margins position it for long-term sustainable profit growth, reiterating better visibility to achieve its previously indicated 15-20% EBITDA margin over the next two to three years.
Following the earnings announcement, Goldman Sachs maintained its 'Buy' rating and raised its target price to ₹1,500 from ₹1,430, citing the strong quarter warranted earnings upgrades with growth being driven by market share gains across both offline and online payments. Citi also reiterated its 'Buy' rating and increased its target price to ₹1,560 from ₹1,425, noting that EBITDA momentum was supported by robust financial services growth and lower cloud infrastructure costs. However, CLSA maintained its 'Underperform' rating while raising its target price to ₹1,050 from ₹1,000, stating that gross merchandise value growth is accelerating, albeit at a slightly lower take rate, while financial services revenue growth remains strong and contribution margins are steady.
