In a significant turnaround, Indian payment services provider PayU India has swung to profitability during the September quarter. The Prosus-backed firm reported a positive adjusted EBITDA of $3 million, a stark reversal from the $6 million loss recorded in the same period last year.
Drivers of Growth and Profitability
This financial resurgence was disclosed in Dutch investor Prosus's half-yearly update for H1FY26. The report highlights that the company's EBITDA margin expanded by 400 basis points to reach 1% for the quarter. A primary engine for this growth has been PayU's merchant lending division. The assets under management for this arm skyrocketed from $25 million in April 2024 to an impressive $204 million by September 2025. This surge is largely attributed to the company extending working-capital loans to merchants on platforms like Swiggy and Meesho.
Overall revenue for PayU India in the September quarter stood at $214 million, marking a robust 21% year-on-year increase and a 17% sequential growth. For the entire first half of the fiscal year ending September 2025, the company's consolidated revenue climbed 20% year-on-year to $397 million, solidifying India's position as a key growth pillar within Prosus's global e-commerce portfolio.
Segment Performance and Strategic Shifts
Delving into the segments, the core payments business generated $301 million in H1FY26, a 20% increase, while the newer credit business contributed $96 million, growing 17%. At the broader India ecosystem level, which includes other Prosus investments, revenue reached $397 million, up from $332 million a year earlier.
Profitability improvements were noted across the board. The payments business delivered an adjusted EBITDA of $2 million for the half-year, compared to a loss previously. Meanwhile, the credit arm significantly narrowed its adjusted EBITDA margin from –20% to –3%, achieving breakeven in the September quarter. Prosus credited this enhancement to a strategic focus on higher-margin value-added services and software products, such as fraud-risk tools and multi-factor authentication. Revenue from these services now constitutes 34% of the payments revenue.
Furthermore, payment volumes at PayU India jumped 55% in H1FY26, fueled by a surge in smaller-ticket UPI transactions. The company managed to maintain stable take rates by strategically shifting its portfolio towards higher-yield segments.
Broader India Portfolio and Market Context
Prosus describes PayU as the crucial payment gateway "connector" that links its extensive India portfolio, including Swiggy, Meesho, PharmEasy, Rapido, and ixigo. Tighter integration among these businesses is designed to deepen user engagement and fuel collective growth. Beyond PayU, Prosus has continued to bolster its Indian presence, taking minority stakes in Rapido and ixigo during 2025, and pointing to recent IPOs of portfolio companies like Bluestone and Urban Company as signs of a maturing market.
PayU India operates in a highly competitive payments gateway landscape, rivalling players such as Razorpay, Cashfree Payments, BillDesk, and Paytm. Prosus's commitment to the Indian consumer internet sector spans over two decades, with more than $10 billion invested across various domains including payments, food delivery, and health-tech.
