On Friday, One 97 Communications Ltd, the parent company of Paytm, is scheduled to announce its financial results for the quarter ending December 31, 2023. Analysts from brokerage firms are predicting a mixed set of numbers, with expectations of increased revenue on both yearly and quarterly bases, along with a contraction in operational and net losses.
YES Securities forecasts a net loss of Rs 280 crore in Q3FY24, accompanied by an Ebitda loss of Rs 225.4 crore. However, they anticipate a substantial 32 percent YoY and 8 percent QoQ rise in revenue to Rs 2,721.4 crore. The brokerage firm focuses on potential growth in payments services to consumers, payments services to merchants, and financial services.
Dolat Capital projects Paytm’s revenue at Rs 2,786.9 crore, indicating a 10.7 percent QoQ and 35 percent YoY increase. Ebit loss is expected to decline both QoQ and YoY, with a ‘buy’ rating on Paytm and a target price of Rs 1,320. Dolat Capital emphasizes festive season-led strong payment business growth and improved overall operating performance.
Motilal Oswal anticipates a contribution margin of 55 percent for Q3FY24, with adjusted EBITDA at Rs 204 crore and a 42 percent YoY growth in contribution profit to Rs 1,490 crore. The firm expects a decline in disbursements and GMV, along with enhancements in the number of subscription payment devices.
UBS, in its initiating coverage on Paytm, notes the company’s strong top-line Compound Annual Growth Rate (CAGR) of 54 percent in FY21-24E, driven by core payment business and supported by device and loan origination monetization. UBS forecasts a moderating 21 percent top-line CAGR in FY24-28, with the expectation of breaking even on EBITDA in FY25 and reaching a 20 percent EBITDA margin by FY28.
As the market awaits Paytm’s Q3 results, analysts and investors are keenly watching for insights into loan business updates, merchant business performance, and the scale-up of consumer payment business.
