Paytm's Net Loss Narrows To Rs 357 Crore In Q1FY24, Revenue Up 39% YoY

One 97 Communications aka Paytm's consolidated net loss narrowed to Rs 357 crore in the quarter ending June 30, 2023 (Q1FY24), as against a loss of Rs 644.4 crore in the same quarter a year ago. The profitability improved on the back of continued momentum in revenue growth, increase in net payment margin and robust growth in loan disbursements.

However, Paytm's Q1FY24 net loss sequentially expanded from the net loss of Rs 168.4 crore in Q4 of FY23.

Coming to the top-line front, revenue from operations jumped by 39.41% to Rs 2,341.6 crore in Q1FY24, as against Rs 1,679.6 crore in Q1 of the previous fiscal. The YoY growth in revenue was driven by an increase in merchant subscription revenues, an increase in GMV and a growth in disbursements of loans through our platform.

However, compared to the March 2023 quarter where revenue was at Rs 2,334.5 crore, the growth in Q1FY24 is marginal by 0.3%.

Revenue from payments business jumped 31% YoY to Rs 1,414 crore, while GMV surged by 37% YoY to Rs 4.05 lakh crore.

In its financial earnings report, Paytm said "For Q1 FY 2024, we continued our momentum with 39% YoY revenue growth, led by an increase in GMV, merchant subscription revenues, and growth of loans distributed through our platform. There are no UPI incentives booked during the quarter as we book UPI incentives after government issues the gazette notification, which is typically in H2 of the financial year."

Also, net payment margin zoomed by a whopping p 69% YoY to Rs 648 crore in Q1FY24.

According to Paytm, the net payment margin has gone up due to an increase in the net payment processing margin and an increase in merchant subscription revenues. Net Payment Processing Margin has further improved and is now at the top end of the 7-9bps range due to: a) an increase in GMV of non-UPI instruments like EMI and cards, and b) lower interchange cost for Wallet, post interoperability circular by NPCI, and Postpaid due to better portfolio quality.

Further, the fintech giant's EBITDA before ESOPs was up Rs 359 crore YoY to Rs 84 crore (margin of 4%, up 20 percentage point YoY).

Moreover, under the loan distribution business, revenue from financial services and others soared by 93% YoY to Rs 522 crore. Also, loan distribution continues to scale with Rs 14,845 crore of loan disbursement (up 167% YoY). It needs to be noted that unique borrowers, who have taken loans through the Paytm platform, reach 1.06 crore.

As of June 2023, merchant subscriptions stood at 79 Lakh, increasing 41 Lakh YoY and 11 Lakh QoQ. The company said it sees sustained traction and earns ₹100 to ₹500 per month per device.

On BSE, Paytm shares closed at Rs 843.55 apiece, down by Rs 7.55 or 0.89% on Friday.

Paytm stock will react to Q1 earnings on Monday.