Paytm’s Q1 net widens even as contribution profits soared year-on-year

K.R. Srivats | Updated on: Aug 06, 2022

On track to achieving operating profitability by September 2023, says the Paytm management

One97 Communications, which owns the Paytm brand, reported a net loss of ₹ 645 crore in the first quarter ended June 30 this fiscal. 

The latest loss print was up 69 per cent over the net loss of ₹382 crore recorded in the same quarter last year, but lower by 15 per cent over the net loss of ₹763 crore in the March 2022 quarter. 

While net losses widened on a year-on-year basis in Q1, the company recorded a lower EBITDA (before ESOP) loss of ₹275 crore. This was an improvement of ₹93 crore Q-on-Q.

Revenue from operations was up 89 per cent for the quarter under review at ₹ 1,680 crore (₹ 892 crore). The latest quarter’s performance was also better than revenue from operations of ₹ 1541 crore recorded in the March 2022 quarter. 

Contribution profit for the quarter under review grew 197 per cent to ₹726 crore (₹245 crore in June 2021 quarter). This was higher by 35 per cent over contribution profit of ₹ 539 crore in the March 2022 quarter, latest filings made by the Paytm with stock exchanges showed.

The management said it is committed to building a profitable company and creating shareholder value while driving digitisation and inclusive financial access. 

“Q1 FY 2023 results exhibit our strategy is well-in-place, with focused improvement on unit economics , better expense management and increasing mix of higher margin businesses (such as financial services & commerce ) steering us on the path to profitability “, the company said in its regulatory filing.

Paytm’s payments services revenue grew by 69% Y-o-Y (3% Q-o-Q), supported by rapid growth in user engagement, merchant base, use cases on the Paytm super app and subscription revenue from payment devices.

The company’s user engagement, measured by monthly transacting users (MTU), grew 49 per cent Y-o-Y to 74.8 million during the quarter, while the merchant base expanded 30 per cent Y-o-Y to 28.3 million. This has resulted in a 101 per cent Y-o-Y jump in Gross Merchandise Value (GMV), which stood at ₹2.96 lakh crore during the quarter.

Paytm continues to dominate the offline payments segment, with a total of 3.8 million devices deployed, of which 2.8 million were added in the past 12 months and 0.9 million during the quarter.

The company’s revenue from financial services grew 393 per cent Y-o-Y during the quarter, led by massive growth in Paytm’s loan distribution business. During the quarter, Paytm disbursed 8.5 million loans, representing a growth of 492 per cent Y-o-Y and 30 per cent Q-o-Q.

The value of the loans disbursed stood at ₹5,554 crore, marking a growth of 779 per cent Y-o-Y of 56 per cent Q-o-Q. Moreover, the company has now reached an annualised run rate of approximately ₹24,000 crore of loan disbursements through its platform, with higher demand for Paytm Postpaid (BNPL), personal loans and merchant loans.

Published on August 05, 2022
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