PAYTM - One 97 Communications Limited Share Price

In the earnings call held on May 7, 2026, management provided a positive outlook for the upcoming fiscal year 2027, characterized by an expected acceleration in revenue growth across multiple business segments. The primary driver of this growth anticipated is the recovery in marketing services, which had previously seen a decline. Management noted that approximately 55% of revenue comes from payments, and 30% from financial services, both of which are expected to contribute significantly to this growth.

They affirmed a medium-term goal of achieving EBITDA margins between 15% to 20%, though current margins are around 6%. Management expressed confidence that they could reach this aspirational margin in two to three years, supported by growth in their core payment solutions and personal loans.

In terms of financial services, the company expects strong performance from merchant loans and is witnessing a recovery in personal loans. Management indicated that the traction seen during the recent launch of Postpaid is better than previous iterations, recognizing the significant growth potential in this area. They also highlighted ongoing efforts in AI technologies that could enhance customer engagement and retention.

Completion of revenues and profitability metrics is key to their outlook, with management guiding for a revenue growth of more than 22% and aiming for EBITDA expansion. Importantly, the company is maintaining a strategic focus on utilizing AI for servicing and optimal customer interactions, indicating a transformative approach in their operational model.

Overall, the tone suggested strong optimism regarding the business trajectory and the ability to leverage technology effectively in driving growth.

Question & Answer Breakdown

Question 1: "Can you provide more color on the revenue growth acceleration you talked about for FY27, particularly in relation to marketing services and its recovery? Also, where do you see EBITDA margins heading in the medium term?"

Answer 1: "We expect marketing services, including AI insights, to drive recovery. Payments stand at 55% of revenue and financial services at 30%. We foresee growth across these sectors, contributing to our guidance acceleration. Our target is to reach 15-20% EBITDA margins within two to three years, having ended FY26 at 6%."

Question 2: "How is the traction for the new Postpaid service compared to the previous iteration, specifically regarding ramp-up?"

Answer 2: "Traction is significantly better this time"”not just an improvement, but phenomenally well. It reflects fast adoption, and we are seeing a notable uptick in personal loan disbursements as well. Our approach remains focused on tech integration rather than being a credit issuer."

Question 3: "What about the potential impact of the PPBL ban on your business operations and the outlook for your wallet application?"

Answer 3: "There is no impact from the PPBL ban on our operations. We remain committed to expanding our wallet license and see no regulatory hindrances affecting us."

Question 4: "Regarding growth acceleration for FY27, will it be driven by existing services or emerging ones like wealth management and insurance?"

Answer 4: "It will be a combination of both. Payments must scale, which is the core growth leg, but financial services like wealth management will also contribute significantly. Our focus is maintaining profitable trajectories across these sectors."

Question 5: "Can you explain how you're investing in AI, and how will it assist in consumer experience improvements?"

Answer 5: "Investments in AI are focused on enhancing customer experience and making services more efficient through agents that facilitate trading and portfolio management, improving overall interactions."

Question 6: "What is your plan regarding the wallet license with RBI, and when do you expect to receive it?"

Answer 6: "While I can't provide a timeline, our priority is execution and resource allocation. We're confident in the path ahead and focused on effective growth strategies."

Question 7: "How do the cashback incentives and marketing strategies align with growth, considering MTUs have not seen significant jumps?"

Answer 7: "We prioritize acquiring high-quality customers over sheer numbers. Thus, our marketing spend will rise, but this is to enhance engagement rather than simply drive MTU growth. Quality customers lead to better retention."

Question 8: "What's the status of your debt funding, and how might this affect future growth initiatives?"

Answer 8: "We do not see our growth linked to any single funding source. Our debt position is healthy due to strategic partnerships enabling us to focus on enhancing customer service without owning credit risk."

These summarized answers cover key insights on revenue growth, business strategy, financial services, and operational dynamics for Paytm based on their earnings call held on May 7, 2026.