PayU India nears breakeven in H1 FY26 as Prosus backs profitable growth

Prosus says PayU India is sharpening its focus on higher-margin services, improving cost discipline, and leveraging payments, VAS, and SaaS to move towards sustainable profitability in H1 FY26

Prosus-backed fintech firm PayU India recorded 20 per cent growth in revenue to $397 million in the first half of financial year 2026 (H1 FY26) on the back of growth in the payments business, driven by higher-margin value added services (VAS) and software as a service (SaaS).

 

In H1 FY25, the company reported total revenue of $332 million.

 

Its payments revenue grew 27 per cent to $301 million in H1 FY26 from $237 million in H1 FY25. Credit business grew 17 per cent to $96 million in H1 FY26 as compared to $82 million in H1 FY25.

 

Dutch technology investor Prosus, in its half-yearly filings, stated that PayU India was focused on profitable growth on the back of its client base.

 

“This focus is evident in the substantial improvement in its aEBITDA margin, which rose by 6 percentage points from -6 per cent in 1H25 to breakeven in 1H26, with a profitable Q2 FY26,” it said in its report.

 

AEBITDA stands for adjusted earnings before interest, taxes, depreciation, and amortisation. The metric measures a company’s operating performance considering its EBITDA and removing any one-offs or adjusted non-operational items.

 

How did PayU’s sharper focus improve profitability?

 

“A sharper focus on higher-margin services, combined with disciplined cost management, delivered an inflection point in profitability for payments, leading to US$2m aEBITDA in 1H26,” Prosus added.

 

In FY25, PayU had recorded a negative aEBIT. The investor had then stated that it aimed to restore the company’s profitability.

 

What drove PayU’s payments revenue and service mix in H1 FY26?

 

In H1 FY26, VAS and SaaS services contributed 34 per cent of the payments revenue to the company. It said digital payments grew 55 per cent, driven by low-value Unified Payments Interface (UPI).

 

The company got a final nod from the Reserve Bank of India (RBI) to operate as an online payment aggregator (PA-O) in May 2025. This came after the banking regulator had asked the company to reapply for a licence in 2023.

 

It is also an offline or physical (PA-P) as well as a cross-border payment aggregator (PA-CB).

 

How is PayU expanding UPI solutions and merchant offerings?

 

PayU is working on UPI solutions and has launched the UPINXT platform, which is an issuing and acquiring product for UPI for merchants and banks. This is being done in partnership with Mindgate, in which the firm raised its stake to 70.7 per cent.

 

The company continued to serve small offline merchants with credit issuances. It recorded $640 million in new loan disbursals, with 65 per cent going to consumers and the rest to small and medium businesses (SMBs).

 

What helped improve the credit business’s margin profile?

 

Prosus added that a partnership-led approach improved profitability, driven by lower credit costs, reduced sales and marketing spend, and a leaner cost-to-income structure.

 

“Credit improved its aEBITDA margin substantially from -20% to -3% by reaching breakeven in Q2 FY26,” it explained.