Paytm Q1 profit surges 79% but shares fall on scrapped bonus
Paytm's strong quarterly earnings failed to stop a seven-session share slide after the board abandoned a proposed bonus issue, though technicals suggest the pullback is merely profit-taking.
Paytm reported a 79% year-on-year increase in consolidated net profit to ₹220 crore for the June quarter, but its shares still fell for a seventh consecutive session. The stock dropped 2% on Wednesday, extending a cumulative 8% decline from its July 15 peak of ₹1,407.
The earnings release was accompanied by the announcement that the board will not proceed with a proposed bonus share issue. Management stated Paytm will instead concentrate on driving sustainable growth, improving profitability and creating long-term shareholder value.
The underlying financial metrics indicate the core business is accelerating. Revenue climbed 28% year-on-year to ₹2,448 crore, while profit before tax nearly doubled to ₹247 crore. Merchant gross merchandise value surged 31% to ₹7.1 lakh crore, pointing to higher payment volumes and increased merchant adoption.
Paytm's profitability trajectory remains firmly positive, building on its first-ever annual profit of ₹552 crore in fiscal 2026. Sequential profit growth to ₹220 crore from ₹183 crore in the March quarter underscores this operational momentum.
Market technicians view the recent share price weakness as a natural pause rather than a structural breakdown. Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, noted the correction follows a strong rally between early June and mid-July.
"Paytm has corrected nearly 8% from its recent high of ₹1,407, reflecting healthy profit-booking," Shah said. He pointed out that the stock's Relative Strength Index has cooled from an overbought 80 to around 59, indicating a temporary lull in bullish momentum rather than a trend reversal.
The key level to monitor is the ₹1,275-1,270 zone, which aligns with the stock's 20-day exponential moving average. Sustaining above this support could trigger a fresh rebound, though a decisive break would extend the ongoing correction.
For investors, the current pullback presents a test of whether the market will continue to reward Paytm's operational execution without the speculative premium of a bonus share. If the ₹1,270 support holds, the fundamentals suggest the broader uptrend remains intact.
