Fintech firm Paytm posted a 32 per cent jump in revenue to Rs 2,519 crore in the July-September quarter (Q2 FY24) while narrowing down its losses to Rs 292 crore. Company’s net loss in the year-ago period was Rs 571.5 crore.
Paytm reported a surge in revenue from its payments business, with a 28 per cent year-on-year increase to Rs 1,524 crore. The number of merchants paying subscriptions for Paytm devices also increased, reaching 92 lakh, a YoY increase of 44 lakh and a QoQ increase of 14 lakh.
Revenue from Paytm’s financial services, including loans, rose by 64 per cent YoY to Rs 571 crore. Paytm disbursed loans worth Rs 16,211 crore, with Rs 9,010 crore from Paytm Postpaid, Rs 3,927 crore from personal loans and Rs 3,275 crore from merchant loans through partner banks and NBFCs. The value of personal loans disbursed decreased QoQ due to a reduction in shorter tenor loans on the platform.
Paytm has partnered with nine NBFCs and banks for its credit card and loan distribution business. The number of unique users taking loans through the Paytm platform reached 1.18 crore.
Total expenses increased by 14 per cent to Rs 2,936.7 crore, primarily driven by employee benefit expenses and payment processing charges. However, the company managed to reduce marketing and promotional expenses.
Paytm believes that the RuPay credit card on UPI has good adoption by consumers and sees it as a potential revenue stream for UPI payments over time.
Jefferies, an investment bank, initiated coverage on Paytm with a ‘buy’ rating and a target price of Rs 1,300. The bank is confident that Paytm will become a profitable fintech globally in the next four quarters and expects the company to turn profitable by the third quarter of FY25.
Paytm’s shares closed 1.20 per cent higher at Rs 980.05 apiece on the NSE.