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One 97 Communications, which owns the brand Paytm, on Friday, reported a consolidated net loss of ₹292 crore in the quarter ended September 30, 2023. This was significantly narrower than the net loss of ₹571 crore recorded in the same quarter last fiscal and the net loss of ₹358 crore in the preceding quarter.
For the quarter under review, this fintech major’s revenue from operations increased 32 per cent to ₹2,519 crore (₹1,914 crore). Revenues were up 8 per cent when compared to the level of ₹2,342 crore achieved in the June 2023 quarter.
Revenue was driven by an increase in merchant subscription revenues, an increase in Gross Merchandise Value (GMV), and growth in disbursements of loans through the company’s platform. Paytm’s loan disbursements grew 122 per cent in Q2 at ₹16,211 crore (₹7,313 crore). The number of loans distributed grew to 1.32 crore, a growth of 44% year-on-year.
Contribution profit for the quarter under review stood at ₹1,426 crore, up 69 per cent over ₹843 crore in same quarter last fiscal.
EBITDA (before ESOP) came in at ₹153 crore, higher than ₹84 crore recorded in the June quarter.
“We continue to see consistent improvement in profitability due to strong revenue growth, increasing contribution margin and operating leverage”, Paytm said in its filing to the stock exchanges on Friday.
Paytm stock, which was one of the biggest wealth destroyer last year, has so far rallied about 80 per cent this calendar year.
Analysts see Paytm’s large ESOP costs as a drag on profitability as the cost of issuance towards the large pool of ESOP issued prior to its IPO is currently making up 18 per cent of revenues.
This Vijay Shekhar Sharma-led Fintech has already announced its aim to soon get to ‘free cash flow positive’ status.
While Jefferies has now, prior to the Q2 results announcement, initiated coverage on the stock with a buy rating and target price of ₹1,300, Goldman Sachs had last week hiked its target price to ₹1,250, noting that it expects this fintech to be the most profitable company within the Internet sector.
On Friday, Paytm’s shares ended 1.2 per cent higher at ₹980.05 per share on the National Stock Exchange (NSE).
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