 "Vijay Shekhar, Vijay")
After helping rein in costs, Paytm’s artificial intelligence (AI)-led product focus is expected to further drive revenue growth, founder and chief executive officer (CEO) Vijay Shekhar Sharma said on Wednesday.
The company will target its online and offline merchants, including the small and large ones, for these AI products.
“AI is a revenue line item. It brings newer service, newer business, (and) phenomenally more number of things that we can do… Up till now, we’ve been putting it into the cost side, efficiency side. While there will be some optimisation (further), but not material enough,” he said, in a call with analysts post its earnings.
Paytm has slashed its indirect expenses, which includes employee costs, marketing and cloud costs, by 18 per cent to ₹1,064 crore in the second quarter of financial year 2026 (Q2FY26), as compared to ₹1,298 crore in Q2FY25.
Sequentially, indirect costs were down from ₹1,079 crore in Q1FY26.
“The starting point is that AI gives us better efficiencies and better insights, in addition to new revenue generating products. For example, if we are able to use better insights to reduce the credit costs for our partners, then that translates into higher collection revenue,” said the company’s president and group chief financial officer (CFO) Madhur Deora.
To start with, Paytm is leveraging AI to enhance its soundbox or AI devices, equipping merchants with AI-powered agents that provide insights, analytics, and voice-based commands.
The company may later earn by charging a subscription for these services.
“The idea is that a small business can have a chief operating officer, chief finance officer, chief marketing officer practically there in the shop in an AI component. We are building these devices, which are specifically made and manufactured by us,” Sharma added.
The company has a base of 47 million registered merchants. The subscription merchants such as those who use its devices stand at 13.7 million as of Q2FY26.
Paytm is also pursuing international expansion, exploring two distinct models as blueprints for its growth abroad.
First, the company plans to forge tech partnerships with established local players in foreign markets. Second, it plans to enter new markets with lucrative payments margins through its wholly owned or majority controlled entities.
In 2024, Paytm’s wholly owned Singapore entity sold its stake in Japanese fintech corporation PayPay for ₹2,364 crore.
It will eye emerging markets such as Southeast Asia and developed ones too, Sharma added.
One97 Communications (OCL), operator of Paytm brand, reported a net profit of ₹21 crore for the second quarter of financial year 2026 (Q2FY26).
This was in contrast to the ₹928 crore profit the company reported in the same quarter of the last year, which was boosted by an exceptional gain from the sale of its movie ticketing and events business to Zomato.
Sequentially, the net profit declined 83 per cent from ₹123 crore.
Paytm earned ₹2,061 crore in revenue from operations in Q2FY26, a 24.23 per cent increase from ₹1,659 crore earned from operations in Q2FY25.
Other income, which may include interest or dividend income, or any other non-core revenue, was recorded at ₹222 crore in Q2FY26 as compared to ₹175 crore in Q2FY25.
Sequentially, revenue from operations grew 7.5 per cent from ₹1,918 crore in Q1FY26.
The other income in the quarter was recorded at ₹241 crore.
Paytm slashed its total expenses by around 8 per cent to ₹2,062 crore in Q2FY26 as compared to ₹2,245 crore in Q2FY25.
The company tightly controlled its expenses sequentially, with them rising marginally by 2.3 per cent from ₹2,016 crore in Q1FY26.
OCL said it will invest up to ₹2,250 crore in its wholly owned subsidiary Paytm Payments Services (PPSL) via a rights issue.
This is being done to strengthen its net worth, pay for acquisition of offline merchant payment business, fund working capital needs, and support its leadership in the merchant payments business, the company said.
