Paytm reported its Q2 results on Tuesday. The company also got the National Payments Corporation of India’s (NPCI) approval to onboard new UPI users.

What Happened: Paytm reported a net profit of ₹930 crore, boosted by an exceptional gain of  ₹1,345 crore from its ticket business sale to Zomato. Its revenue declined by 34% to ₹1,659.5 crore, but it gained 10.5% from the previous quarter. 

The Q2 figures were mostly in line with analyst estimates. 

NPCI also gave Paytm permission to onboard new UPI customers. RBI had barred Paytm from taking new customers in its January action against the company. 

Brokerage Views: Bernstein gave the company an "outperform" call with a target price of ₹600. The brokerage said Q2 gross merchandise value (GMV) and merchant loan disbursals were positive for the company. A continued decline in monthly transactional users and a sequential fall in personal loan disbursals were key negatives, it added. 

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The research firm also noted the cost control efforts taken by the company are visible with indirect expenses declining sharply. 

Jefferies gave a "hold" call with a target price of ₹700. The brokerage said Q2 EBITDA loss declined on continued cost reduction and recovering topline. The disbursal ramp-up could accelerate EBITDA breakeven, the research firm added. The risk around the company has been meaningfully reduced with NPCI third-party application provider approval. 

UBS gave a neutral call with a target price of ₹490. The research firm said the NPCI approval is positive for the company as it can grow its customer base and gain market share in payments GMV. 

Emkay Global maintained its “add” rating on the payments giant with a price target of ₹750. The analysts noted that Paytm reported a reduced EBITDA (before ESOP) loss of ₹180 crore in Q2FY25, compared to a ₹550 crore loss in Q1FY25. The brokerage attributed this improvement primarily to continued cost optimisation, lower ESOP costs, and a one-off gain from the sale of Paytm’s entertainment business.

However, Emkay analysts pointed out that overall business growth remained slow. Payment GMV grew by 5% QoQ but declined 1% YoY, while loan disbursements saw a modest 5% QoQ growth but were down 57% YoY, with the personal loan (PL) business being particularly impacted.

The brokerage firm highlighted that Paytm received approval from NPCI for adding new UPI users, which is expected to help re-accelerate its user base, signalling a positive shift in the regulatory environment.

Price Action: Shares of Paytm rose 5.64% to ₹725.15 on Wednesday morning.

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