The National Payments Corporation of India (NPCI) saw its consolidated net profit fall 32.4% to ₹989.4 crore in FY26, as increased tax outgo and growing subsidiary losses offset revenue gains from its core payment services.
- NPCI's net profit drops 32.4% to ₹989.4 Cr in FY26
- Tax expenses surge 173.4%, significantly impacting profitability
- BHIM subsidiary losses increase nearly sixfold to ₹390.6 Cr
What happened
NPCI's consolidated net profit decreased by 32.4% year-over-year to ₹989.4 crore for the financial year ending March 2026, down from ₹1,463.2 crore in FY25. This decline occurred even as the company's revenue from operations rose by 21.8% to ₹4,240 crore. The strongest component of revenue growth was from payment services, which climbed 16.3% and accounted for over 88% of total operational income.
The company’s tax expenses more than doubled, rising 173.4% to ₹898.5 crore, driven by higher current tax and a sizable deferred tax charge compared to the previous year. This tax spike eroded the gains from a 5.4% increase in profit before tax, which grew to ₹1,888 crore. Additionally, NPCI’s wholly owned subsidiary operating the BHIM app, NPCI BHIM Services Ltd, recorded a loss six times greater than in the prior year, totaling ₹390.6 crore on a revenue of ₹27.8 crore.
Why it matters
The decline in NPCI’s net profit highlights the impact of increased tax liabilities on the financial health of even dominant payment infrastructure providers in India. As a not-for-profit entity, NPCI’s reported 'surplus' measures its retained profit after tax, which is crucial for funding ongoing digital payments innovations and ecosystem growth.
Moreover, the steep losses by NPCI BHIM Services Ltd underline the challenges in monetizing the BHIM app despite its strategic importance in India’s digital payment landscape. The rising marketing and cashback costs to promote RuPay card adoption and digital transaction volumes contributed significantly to overall expenses, emphasizing the investments needed to maintain market leadership amidst fierce competition.
What to watch next
Going forward, stakeholders will be monitoring how NPCI manages its tax burden and controls rising operating and marketing expenses to restore profit growth. The company will also need to assess its approach to scaling the BHIM app’s business model to reduce losses while expanding digital payment adoption.
In addition, NPCI’s international ventures and subsidiary performance in sectors like Bharat BillPay and global payment services will be key indicators of its growth trajectory. Continued innovation, including newly introduced AI-powered payment platforms and open-source ATM technology, may help NPCI strengthen its competitive position in India and abroad.