One 97 Communications
Turnaround: profitable payments platform
- Last close
- ₹1,683.00
- 29 Sept 2026 · reference
- 1D · 1M
- +2.9% · +1.9%
- price-only
- Weight
- 2.2%
- 31 Jul 2026 · Aug rank 15
- Thesis review
- 8 Sep 2026
- Why We Own, p47
Approved description
India's largest merchant-payments platform (1.57 cr subscription devices/Soundboxes, GMV Rs 7.1 lakh cr in Q1FY27, 8.0 cr monthly transacting users) that monetises payments via device subscriptions and net payment margin, and distributes merchant and personal loans plus insurance/wealth for lenders (financial services revenue Rs 814 cr, +45% YoY). After the RBI shut Paytm Payments Bank (Jan-2024 action; licence cancelled 24-Apr-2026), Paytm rebuilt on partner banks with a TPAP licence (Mar-2024) and a payment-aggregator licence for subsidiary Paytm Payments Services (2026). Consumer UPI GTV grew 45% YoY vs ~20% industry in Q1FY27.
- 01Turnaround is delivered, now compounding: from EBITDA -Rs 1,506 cr in FY25 to +Rs 501 cr in FY26 and a record Rs 203 cr in Q1FY27 alone (8% margin) while management targets 15-20% EBITDA margin - operating leverage on a 55% contribution margin.
- 02Merchant franchise is growing again post-RBI: 1.57 cr subscription devices (+27 lakh YoY), GMV Rs 7.1 lakh cr (+31%), consumer UPI GTV +45% vs ~20% industry, MTU 8.0 cr (+60 lakh YoY) - share is being regained from PhonePe/GPay.
- 03High-margin lending distribution: financial services revenue Rs 814 cr (+45% YoY), >50% repeat merchant borrowers, 7.6 lakh customers (+34%); this is asset-light (no credit risk on book) and drives the PAT +79% YoY.
- 04Regulatory overhang largely cleared: PPBL licence cancelled 24-Apr-26 (already exited), PA licence granted to Paytm Payments Services in 2026, TPAP since Mar-24; MDR on large merchants (Taxation & Other Laws Amendment Bill 2026) would be a revenue tailwind for the largest merchant acquirer.
- 05Net cash Rs 13,529 cr (13% of mcap) and 'almost debt free' (borrowings Rs 172 cr) fund devices, AI cost-out and buybacks.
Reference close, with results-period markers
- 1Q Sep-25 end · 30 Sept 2025
- 2Q Dec-25 end · 31 Dec 2025
- 3Q Mar-26 end · 31 Mar 2026
- 4Q Jun-26 end · 30 Jun 2026
Quality score, technicals and Buoyant Score
Computing the scorecard…
Latest quarter · Q Jun-26
| Line (₹ cr) | Q Jun-26 | YoY | QoQ |
|---|---|---|---|
| Net Sales | 2,448 | +27.6% | +8.1% |
| Operating Profit | 203 | +181.9% | +53.8% |
| Net Profit | 220 | +78.9% | +19.6% |
Reported vs internal estimate: internal quarterly estimates are not in the supplied package; consensus feed not licensed. YoY/QoQ per PRD §12.5 (transitions, not %, on non-positive bases).
Position and valuation context
General industrial/consumer/IT preset: growth, margins, ROCE/ROIC, working capital, FCF, net debt; P/E, EV/EBITDA.
Sell-side targets are third-party views, not Buoyant's; the upside is recomputed on our reference close, so it differs from the figure printed at the broker's price date.
Valuation range
No headline target on this page; the book quotes the thesis and the risk rather than a target.
What we watch
- Finalisation of the large-merchant MDR threshold/rate under the 2026 Amendment Bill (expected H2 FY27) - direct revenue uplift for Paytm's merchant acquiring.
- Q2FY27 results (Oct/Nov-2026): progress toward 15-20% EBITDA margin and continued ~30% revenue growth (GS models 27% FY27).
- Government/NPCI FY27 UPI incentive notification and any RBI clarity on Paytm's wallet/PPI re-entry.
- Policy: if MDR is not introduced and incentives shrink, net payment margin (Rs 601 cr in Q1, '>4 bps') depends on device rentals, which Citi flagged as softening; regulatory history (RBI 2024) means headline risk stays high.
- Valuation: 130x TTM and 149x Buoyant FY27e P/E price in a multi-year 50%+ EPS CAGR; any slowdown in lending partners (unsecured-credit tightening) hits the highest-margin line (Rs 814 cr, +45%).
- No promoter (Vijay Shekhar Sharma classified as non-promoter; FIIs 48%, DIIs 25%, public 27%) - governance depends on board and large-holder discipline; ESOP dilution continues.