Paytm Witnesses Strong Merchant Business Growth In Q4

One 97 Communications Ltd., parent of fintech platform Paytm, witnessed strong growth in its merchant business in the fourth quarter ended March 31, 2023.

The online payment platform added one million new merchant subscribers in the fourth quarter, according to its quarterly update. This takes the total to 6.8 million merchants.

"With our subscription as a service model, the strong adoption of devices drives subscription revenues and higher payment volumes, while increasing the funnel for our merchant loan distribution," the company said.

Monthly Transacting Users In Q4

Growing consumer engagement on Paytm's "Super App" led to "robust" growth in the company's monthly transacting users. MTU grew 5.9%, quarter-on-quarter, to 90 million in January-March.

On a yearly basis, MTU registered a growth of 27%, reflecting the company's continued expansion of its customer base.

Merchant GMV In Q4

The total merchant gross merchandise value increased 4.6% to 3.62 lakh crore in the fourth quarter from 3.46 lakh crore in the third quarter ended Dec. 31, 2022.

The company posted a growth of 40% on a year-on-year basis. "Our focus over the past few quarters has continued to be on payment volumes that generate profitability for us, either through net payment margins or from direct upsell potential," the company said.

Loan Distribution Business

Paytm disbursed loans worth Rs 12,554 crore in the three months to March, registering a growth of 26% from the Rs 9,958 crore it clocked in the third quarter. The number of loans in Q4 stood at 11.9 million, compared to 10.5 million in the previous quarter. 

Shares of Paytm gained 0.33% to close at Rs 641.1, compared to a 0.91% gain in the benchmark Nifty 50.

Of the 12 analysts tracking the stock, nine maintained 'buy', and three suggested 'hold', according to Bloomberg. The average 12-month consensus price target implies a potential upside of 39.7%.