Paytm parent One97 has reported yet another decent financial quarter. The fintech giant, for the quarter ended September 2023, narrowed its quarterly losses, even as it witnessed a significant growth in its revenue.
Paytm recorded a consolidated revenue of ₹2,519 crore in Q2, marking a remarkable 32% increase compared to the revenue of ₹1,914 crore reported in the previous year’s quarter, as well as a quarterly growth of 7% (from the ₹2341 crore it recorded in revenue in Q1 FY24). The company’s substantial growth in revenue can be attributed to various factors, including improved payment processing margins and growth in its loan disbursement services. The company pointed out that 32% year-on-year revenue growth was maintained despite some revenues being pushed into Q3 FY24. Paytm clarified that this shift was due to a change in the capture of online sales for the festive season.
The revenues from Paytm’s payments business surged by 28% year-on-year to reach ₹1,524 crore for the recently-ended quarter. By September 2023, a staggering 1.18 crore unique users had obtained loans through the Paytm platform. Loan disbursement through the platform witnessed remarkable growth during the period, increasing by nearly 122% in the quarter under review. Out of the total disbursement, merchant loans contributed ₹3,275 crore, and personal loans contributed ₹3,927 crore. Additionally, Postpaid Loans distributed reached a value of ₹9,010 crore. Notably, Paytm offers a variety of credit portfolios, including Paytm Postpaid, personal loans, merchant loans, and co-branded credit cards.
“Despite no UPI incentives received during the quarter, payment processing margin is at the higher end of 7-9 basis point range due to an increase in GMV of non-UPI instruments like postpaid, EMI and cards, and improvements in payment processing margin on these non-UPI instruments,” Paytm noted. Its cash balance increased to ₹8,754 crore at the end of September 2023, compared to ₹8,367 crore at the end of June 2023, while the company claimed that its net payment margin “has gone up 60 percent YoY to ₹707 crore due to increase in payment processing margin and increase in merchant subscription revenues.” Its EBITDA before ESOP rose to ₹319 crore, while the margin came in at 6%.
One of the most notable achievements in this quarter was the significant reduction in losses. Paytm’s losses narrowed to ₹292 crore ($35 million), marking a steep drop of the ₹358 crore it had lost in the previous quarter and a decline of 49% compared to the ₹571 crore in losses in the corresponding quarter in the previous year. The reduction in losses is primarily attributed to a decline in overall direct expenses, which came in at ₹1,093 crore in Q2 FY24.