Paytm’s Q2 profit plunges after gaming unit impairment

Paytm reported a net profit of 21 crore rupee (US$2.4 million) for Q2 2025, down sharply from 928 crore rupee (US$104.6 million) a year ago.

The decline was mainly due to a one-time 190 crore rupee (US$21.4 million) impairment on a loan to its gaming joint venture, First Games Technology, after India’s ban on online money gaming.

Last year’s profit also included gains from the sale of its ticketing platform to Eternal, Zomato’s holding company.

Operating revenue rose 24% to 2,061 crore rupee (US$232.4 million), while expenses dropped to 2,062 crore rupee (US$232.5 million).

Payment revenue climbed 28% to 594 crore rupee (US$67 million), and distribution revenue surged 63% to 611 crore rupee (US$68.9 million), driven by merchant lending.

🔗 Source: YourStory

🧠 Food for thought

Implications, context, and why it matters.

Financial services distribution 63% jump lacks sustainability data

Paytm’s financial services distribution revenue rose 63% year on year to Rs 611 crore 1. The firm shared little on credit quality such as Gross Non-Performing Assets (GNPA) and Days Past Due (DPD), which track defaults and late payments.
Paytm says the Default Loss Guarantee (DLG) model yields a net take rate, revenue after incentives and risk costs, above 5% over 12 to 18 months 2. They did not specify capital at risk or concentration across banks and Non-Banking Financial Companies (NBFCs). Over half of merchant loans go to repeat borrowers 1.
The Rs 190 crore impairment on First Games 1 shows how rule changes can erase value. Paytm has not shared stress testing for the merchant lending book, which models potential losses.

Infrastructure firms can tap MSME cashflow underwriting demand

OCEN 4.0 uses auction-based lending and a Products Registry 3. Technology providers can offer underwriting engines, compliance automation, plus repayment and collections to NBFCs and fintechs.
India’s MSME credit gap is Rs 17 trillion, with 85% of lending underserved 3. Providers of high‑provenance (verifiable) data processing and alternate data analytics can partner with Loan Service Providers (LSPs) that integrate OCEN open Application Programming Interfaces (APIs) 4.
The shift to sachet sized (small ticket) loans needs disbursement and escrow collections, where an intermediary holds funds 3. Infrastructure focused fintechs can monetize these systems as Account Aggregator (AA) adoption grows, and AA lets borrowers securely share financial data among institutions with consent.