Growth in the core payments business, expansion across credit products and wider adoption of revenue-generating payment instruments like credit cards on UPI, helped payment companies strengthen their bottom lines.
Paytm’s parent, One 97 Communications, reported its first full-year net profit in FY26 at Rs 552 crore, compared with a net loss of Rs 663 crore the year before. Pine Labs, one of the country’s largest merchant payment processors, reported a net profit of Rs 137 crore, turning around from a loss of Rs 136 crore the previous year.
Mobikwik, which got listed in December 2024, reported its second consecutive quarterly profit in the March quarter. While the company has not managed strong revenue growth, it reported a net profit of around Rs 4 crore in each of the last two quarters of FY26.
“Our core business is profitable with Rs 50 crore of Ebitda. Now we can invest in new business opportunities around offline payments and lending,” Mobikwik chief executive officer Bipin Preet Singh said.
Commenting on the lack of revenue growth during its FY26 analyst call, Upasana Taku, Mobikwik’s chief financial officer, said most of the volume growth was driven by UPI debit transactions, which is not a revenue-generating business.
Industry insiders attributed the improved financial performance to better payment processing margins as fintechs have built deep integrations with banking partners, invested in in-house technology stacks to keep costs low and scaled up their non-payments businesses.
“The underlying piece is that our product keeps getting better and better…and the second is just a shift in the industry, which is credit instruments being on UPI rails and growing at a much faster pace than overall GMV (gross merchandise value),” Paytm group chief financial officer Madhur Deora said during an analyst call on May 7.
According to the company, its payment processing margin was 0.04% in fiscal 2026, compared with 0.03% the year before.
Mobikwik reported a gross payment margin of 39% in the fourth quarter of FY26, improving from 23% a year earlier.
For Pine Labs, affordability products along with value-added services helped improve financial performance. While announcing its results earlier this week, the company said the share of terminals actively generating revenue for Pine Labs increased to 30% from 22% in FY25.
“Our platform, transaction rails, and distributed architecture allow us to handle increasing transaction volumes with minimal marginal cost expansion, creating strong operating leverage as scale compounds,” chief executive officer Amrish Rau told ET. “We have diversified into multiple asset-light, software-led business lines, which is further strengthening operating cash flow generation,” he added.
Most firms also focused on controlling marketing and employee-related costs, two key expense areas for large consumer-facing fintech brands. Paytm’s marketing cost for FY26 fell to Rs 536 crore from Rs 659 crore the prior year. Its employee expenses dropped 17% to Rs 2,735 crore from Rs 3,288 crore.
For Mobikwik, cost controls helped, especially as revenue declined in FY26. The Gurugram-based fintech reduced its lending-related spending to Rs 45 crore from Rs 175 crore. Its employee benefit expenses stood at Rs 164 crore, compared with Rs 170 crore the prior year.
Commenting on the broader improvement in financials across fintech companies, Yashish Dahiya, group chairman of PB Fintech, said at the digital insurance and lending aggregator, he focused on achieving profitability alongside growth, rather than through cost-cutting alone. The company has been profitable since FY24.
“In 2022 our cost of operations was 35% of fresh premium, now it’s 28%. It has improved but given we are growing we are still adding cost, we are not slowing down growth, management maturity is important when it comes to such decisions,” Dahiya told ET.
PB Fintech closed FY26 with revenue of Rs 6,794 crore and a net profit of Rs 670 crore.
There are currently discussions ongoing around a rub-off effect on unlisted companies as their listed peers turn profitable.
“There is a higher degree of discipline among listed fintech firms because public markets are clearly pushing for better financials. Interestingly, this is pushing large unlisted fintechs to focus on their fundamentals as well,” said a partner at a major global fintech-focused fund.