Fintech giant Paytm demonstrated robust financial performance in the third quarter (Q3) of the financial year 2023-24, with a significant year-on-year reduction of over 43% in its net loss, narrowing from INR 392 Cr to INR 222 Cr. The company’s operating revenue experienced an impressive surge of 38%, reaching INR 2,850 Cr in Q3 FY24, fueled by substantial growth in payment services to merchants.
The quarter-on-quarter comparison revealed a noteworthy trend, as Paytm’s loss narrowed by almost 24% from INR 291.7 Cr in the preceding quarter (Q2 FY24). Sales revenue also exhibited a 13% increase from INR 2,518.6 Cr reported in Q2 FY24.
Paytm attributed its revenue growth to an acceleration in gross merchandise value (GMV) growth, higher device additions, and the expansion of its financial services business. The timing of the festive season, which occurred in Q3 this year, played a contributing role in boosting online sales during this period.
Paytm Q3 Highlights:
- Net Loss: Reduced by over 43% YoY, from INR 392 Cr to INR 222 Cr.
- Operating Revenue: Surged by 38% to INR 2,850 Cr from INR 2,062 Cr in Q3 FY23.
- Adjusted EBITDA: Improved by INR 188 Cr YoY to INR 219 Cr.
- Segmental Revenue Growth: Payment services to merchants increased 69% YoY, reaching INR 1,081 Cr.
- Financial Services and Others: Grew 36% YoY to INR 607 Cr, with a 6% QoQ growth.
Paytm also shared positive developments in its adjusted EBITDA, which improved by INR 188 Cr YoY to INR 219 Cr in the quarter under review. The company highlighted the growth in gross merchandise value, higher device addition, and the financial services business as key drivers for this improvement.
Paytm’s Loan Business and Future Plans:
- Loan Disbursals: INR 15,535 Cr during Q3, up 56% YoY.
- Postpaid Loans: Saw a 17% QoQ decline due to scaling down small-ticket loans business.
- Merchant Loans: Grew 9.3% QoQ to INR 3,579 Cr.
Paytm’s decision to scale down its small-ticket loans business, particularly postpaid loans of less than INR 50K, influenced a 17% QoQ decline in the value of postpaid loans disbursed.
Expenses and Outlook:
- Total Expenses: Increased 27.5% to INR 3,216.3 Cr in Q3 FY24.
- Employee Benefit Expenses: Declined marginally QoQ to INR 1,187.2 Cr.
- Marketing Cost: Slashed by 33% to INR 169 Cr in Q3 FY24.
- Cash Balance: INR 8,901 Cr at the end of December 2023.
Paytm anticipates significant operating leverage from employee costs in the future, leveraging AI for workflow automation. The company’s cash balance increased to INR 8,901 Cr, and it revealed plans to establish new wholly-owned subsidiaries in GIFT City and develop an AI-driven cross-border remittance and payments technology system.
