Paytm Q1 Results: Net Loss Shrinks, Revenue Rises 39%

Fintech company Paytm released its financial results for the April-June quarter of fiscal year 2023-24 (Q1FY24) on July 21. They reported a net loss of ₹357 crore during this quarter, which is a significant improvement compared to the loss of ₹6,444 crore in the same period last year.

However, the net loss has increased compared to ₹168 crore reported in the preceding quarter of fiscal year 2022-23.On the positive side, the company’s revenue from operations increased by 39.4% during Q1FY24, reaching ₹2,341 crore, compared to ₹1,679 crore in the previous year’s quarter.Paytm’s credit distribution business showed remarkable growth, with a 167% increase in loans disbursed, amounting to ₹14,845 crore. The platform facilitated a total of 1.28 crore loans, representing a 51% increase from the previous year.

Paytm added Shriram Finance as a new lending partner during the quarter, bringing the total number of bank and NBFC partners to eight across all its products, including credit cards. The company has various credit portfolios, such as Paytm Postpaid, personal loan, merchant loan, and co-branded credit cards.The company’s net payment margin rose by 69% year-on-year to ₹648 crore, and the gross merchandise value (GMV) grew by 37% year-on-year to ₹4.05 lakh crore during Q1FY24.

The number of merchants subscribing to Paytm’s devices reached 79 lakh, increasing by 41 lakh compared to the previous year. Payment processing margin remained within the high end of the guided range due to growth in non-UPI instruments like EMI and cards, lower interchange cost for wallets, and postpaid services.Paytm mentioned that they expect the payment processing margin to settle at 5-7 bps in the medium to long term as the share of UPI transactions increases.

Due to positive EBITDA before ESOP, improved working capital, and interest income, Paytm’s cash balance increased to ₹8,367 crore at the end of June 2023, compared to ₹8,275 crore at the end of March 2023.The company’s indirect costs increased as expected, rising by 22% year-on-year during the quarter, driven by higher marketing costs related to IPL, impact of appraisals, and expansion of sales and technology teams.During Q1FY24, Paytm’s average monthly transacting users (MTUs) grew by 23% year-on-year, reaching 9.2 crore, as more consumers adopted mobile payments.

One97 Communications, Paytm’s parent company, expressed their satisfaction with the growth in revenue and profitability, with contribution margin expanding to 56% of revenues, primarily driven by the growth in payments and loan distribution businesses.