Paytm Q3 Results: Revenue Up 13%, Loss Narrows
The Vijay Shekhar Sharma-led fintech's consolidated net loss fell sequentially to Rs 221.7 crore in the quarter ended December.
One97 Communications Ltd., the owner and operator of payments giant Paytm, posted growth in revenue alongside a reduction in its third-quarter losses.
The Vijay Shekhar Sharma-led fintech's consolidated net loss fell sequentially to Rs 221.7 crore in the quarter ended December, according to its exchange filing on Friday. That compares with the Rs 255-crore consensus estimate of analysts tracked by Bloomberg.
One97 Communications Q3 FY24 Highlights (Consolidated, QoQ)
Revenue up 13% to Rs 2,850.5 crore vs Rs 2,518.6 crore (Bloomberg estimate: Rs 2,727 crore).
Net loss narrowed to Rs 221.7 crore vs Rs 291.7 crore (Bloomberg estimate: Net loss of Rs 285.2 crore).
Ebitda loss narrowed to Rs 219 crore vs Rs 231 crore.
Paytm’s revenue from its payment business grew 45% year-on-year to Rs 1,730 crore in Q3, led by increase in gross merchandise value and higher subscription revenue.
“Growth in GMV was partly boosted on account of timing of the festive season, as most of the online sales in this financial year were in Q3, whereas in the previous financial year, they started in Q2. There are no UPI incentives booked during the quarter,” it said in a statement.
As of December 2023, its merchant subscriptions were at 1.06 crore. In Q3, it deployed 14 lakh devices, such as soundboxes and POS machines, from which it earns Rs 100 to Rs 500 per month per device.
Its core financial services segment grew 36% year-on-year to Rs 607 crore. “Financial services take rate has increased sequentially due to higher contribution of merchant loan and personal loan distribution and higher revenue of insurance business,” it said.
As a percentage of revenue, expenses declined to 46% in Q3, from 49% in the same year-ago period and 51% in Q2 FY24. "While there can be quarterly volatility, we expect indirect expenses as a percentage of revenues to continue declining over time, despite investment for growth," the company said.
In December, Paytm saw layoffs, aimed at cutting employee costs by about 10-15%. For Q3, its employee costs came in at Rs 809 crore, up 39% year-on-year. "Sales employee cost has gone up by 50% year-on-year as we have expanded our device deployment to 14 lakh versus 10 lakh in Q3 FY23. Other employee cost has gone up 34% YoY as we continue to build platform capabilities."
However, it added that with artificial intelligence delivering significant efficiencies by automating a large spectrum of workflows, it expects significant operating leverage from employee costs.
Shares of the company closed 1.64% higher at Rs 767 apiece, as compared with a 0.7% rise in the Sensex on Friday. It spiked as much as 4.5% during the day.
Of the 16 analysts tracking the company, 11 maintain a 'buy' rating and five suggest a 'hold', according to Bloomberg data. The return potential of the stock implies an upside of 22.4%.
(This is a developing story)
