Paytm raises marketing spend 59 per cent to Rs 194 crore in Q2 FY27

MUMBAI: Paytm is spending more to keep its business in the spotlight, with its marketing bill rising faster than its revenue in the first half of FY27. One97 Communications, the parent company of the digital payments platform, spent Rs 194 crore on marketing and promotions in the September quarter, up 59 per cent from Rs 122 crore a year earlier, as it stepped up expenditure alongside growth in its operating business.

The outlay also climbed sequentially from Rs 169 crore in the June quarter, according to the company’s unaudited consolidated financial results for the quarter and half year ended 30 September 2026.

The increase becomes more pronounced over the six month period. Paytm’s marketing and promotional expenses rose 63.5 per cent to Rs 363 crore in H1 FY27, compared with Rs 222 crore in the corresponding period last year. The spending accounted for approximately 7.1 per cent of revenue from operations of Rs 5,096 crore, up from around 5.6 per cent in H1 FY26.

The numbers point to a larger promotional commitment as the company expands its business, although the results do not disclose how much of the spending went towards individual campaigns, customer acquisition or merchant engagement. Nor do they quantify the returns generated by the additional outlay.

Revenue growth keeps pace with the business

Paytm’s higher marketing bill came alongside a rise in operating revenue. Revenue from operations increased 28.5 per cent year on year to Rs 2,648 crore in Q2 FY27, from Rs 2,061 crore in Q2 FY26. On a sequential basis, revenue grew 8.2 per cent from Rs 2,448 crore in Q1 FY27.

Total income, including other income, reached Rs 2,830 crore in the September quarter, compared with Rs 2,283 crore in the year ago period.

For the first half, revenue from operations rose 28.1 per cent to Rs 5,096 crore from Rs 3,979 crore in H1 FY26. Total income increased to Rs 5,460 crore from Rs 4,442 crore over the same period.

The contrast between revenue and promotional spending is notable. While operating revenue grew by 28.1 per cent in the first half, marketing and promotional expenses increased by 63.5 per cent. This lifted marketing’s share of operating revenue by around 1.5 percentage points year on year.

That does not, by itself, establish whether the additional spending is paying off. The financial results provide the overall expenditure and revenue figures but do not separately disclose campaign-level returns, customer acquisition costs or the incremental revenue attributable to marketing.

For a digital payments business operating across consumer and merchant services, those details would help explain whether the faster rise in promotional spending is translating into stronger engagement, greater transaction activity or more revenue.

Processing payments remains the biggest cost

Marketing is only one part of Paytm’s expenditure mix. Payment processing charges remained a substantially larger expense, reaching Rs 805 crore in Q2 FY27, up from Rs 629 crore in the year ago quarter.

Employee benefits expense increased to Rs 759 crore from Rs 663 crore, while software, cloud and data centre expenses rose to Rs 211 crore from Rs 133 crore.

Taken together with other operating costs, these expenses contributed to total expenditure of Rs 2,531 crore in Q2 FY27, an increase of 22.8 per cent from Rs 2,062 crore in Q2 FY26.

Despite the rise, revenue from operations grew faster than total expenses during the quarter. That relationship helped support an improvement in profitability, although the year on year comparison also reflects the exceptional items recorded in the corresponding period last year.

Across H1 FY27, total expenses stood at Rs 4,914 crore, compared with Rs 4,078 crore in H1 FY26, an increase of approximately 20.5 per cent. Payment processing charges accounted for Rs 1,599 crore, employee benefits expense for Rs 1,501 crore and software, cloud and data centre expenses for Rs 370 crore. Marketing and promotional expenditure totalled Rs 363 crore.

The first half figures show that Paytm is spending more across several parts of its business, from processing transactions and maintaining technology infrastructure to promoting its services. Marketing is growing faster than the other major expense categories cited in the results, but it remains smaller than payment processing and employee benefits costs.

Profitability improves as exceptional items fall

Paytm reported a profit before share of profit or loss of associates and joint ventures, exceptional items and tax of Rs 299 crore in Q2 FY27, compared with Rs 221 crore in Q2 FY26.

After accounting for the share of losses of associates and joint ventures, profit before exceptional items and tax stood at Rs 296 crore, against Rs 220 crore in the year ago quarter.

Profit before tax increased to Rs 292 crore in Q2 FY27 from Rs 30 crore in Q2 FY26. The comparison needs context: the September 2025 quarter included exceptional items of Rs 190 crore, while exceptional items in Q2 FY27 amounted to Rs 4 crore.

The first half followed a similar pattern. Profit before tax reached Rs 539 crore in H1 FY27, compared with Rs 156 crore in H1 FY26. Exceptional items amounted to Rs 4 crore during the current six month period, against Rs 207 crore in the corresponding period last year.

The lower exceptional item charge is an important part of the year on year improvement. The reported figures show stronger profit before tax, but the comparison should not be read as a direct measure of the impact of marketing expenditure alone.

For the business, the wider picture combines growing operating revenue, rising expenditure and improved reported profitability. Marketing has taken a larger slice of revenue, while total expenses have increased more slowly than operating revenue in the September quarter.

The next question is what the additional promotional spending delivers. Paytm operates across digital payments and financial services, including payments for consumers and merchants and the distribution of financial products. Marketing can support awareness, customer retention and merchant engagement across these activities, but the consolidated results do not provide a separate breakdown of how the Rs 363 crore spent in H1 FY27 contributed to those outcomes.

For now, the numbers show that Paytm is putting more money behind promotion as its revenue expands. With marketing expenditure rising more than twice as fast as operating revenue in percentage terms during the first half, the effectiveness of that investment will be an important measure to watch in subsequent results.