Paytm Q1 loss up nearly 70% to INR 645.4 Cr. Operating Revenue Boosts 89 percent

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In a chronological perspective Paytm’s losses decreased 15.3 percent from INR 762.5 Cr in March quarter

The operating revenues of the fintech platform was up 89% increase YoY to INR 1,680 crore

Paytm has stated that it was on track to be profitable in September 2023.

The parent of Paytm’s company One97 Communications on Friday (August 5) announced a widening of its losses consolidated by 69%, to INR 645.4 Cr during the June quarter for the year of financial 2022-23 (FY23) from INR 382 crore reported in the same quarter of the previous year.

On an annual QoQ (QoQ) basis the loss of the fintech platform fell 15.3 percentage from 762.5 Cr. This made Q1 FY23 the 3rd consecutive quarter that saw a decrease in losses.

At the EBIDTA levels (before ESOP cost), Paytm’s loss slowed to INR 275 crore in Q1 FY23 compared to INR 332 Cr during the same quarter last year, the company said in the statement. In terms of QoQ this is 25% less than the reported INR 368 crore in the Q4 of FY22.

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Operating revenue at Paytm was up 89% year-on-year. increase to INR 1,680 crore during the quarter , up from 890.8 Cr in the previous quarter.

The startup stated that the major drivers for its growth was an increased subscription revenue due to a increasing numbers of payment devices growing bill payments because of the growing number of daily transacting users (MTUs) and the growth in loans disbursed from its partners via its platform, and an increase in revenue from commerce.

The largest factor in Paytm’s operating revenues was its financial and payments services segment, which had 74% of the market share. The segment saw growth of 95% to INR 1,246 Crore. In the sector, the payment services provided to merchants brought in the most revenue.

On the other hand cloud and commerce segment contributed approximately 20% to Paytm’s operational revenues of INR 331 crore an increase of 64% YoY.

In the sequence, operating revenue increased 9percent from INR 1,541 crore in the previous month of March in FY22.

Earlier in the year we announced the plan to reach the operating profit (i.e EBITDA before ESOP cost) in September 2023. This is due to better monetization, as well as a slowing the growth of costs, Paytm said. Q1 FY2023’s results show our strategy is working with a focus on unit economics, improved cost management, and a growing the number of businesses with higher margins (such like financial services and commerce) helping us to stay toward profitability.

Additionally, Paytm’s direct expenses also increased by 48 percent YoY to INR 954 Cr Q1 FY23, up from INR 646 Cr in the same quarter of last year. the processing costs for payments rising by 32 percent to INR 694 crore in the period.

For indirect costs, the marketing costs soared 127 percent to INR 175 Crore in the first quarter of FY23. The company’s employee costs not including ESOPs increased 77 percent to INR 552 Crore during the June quarter.

However, its gross merchandise price (GMV) during the quarter recorded a 10% YoY increase to INR 3 lakh crore.

GMV from MDR-related instruments like wallets, cards net-banking, and Paytm postpaid increased by 52% in the last quarter.

UPI aids us with efficient acquisition of merchants and customers which allows us to market our services by introducing new financial services and payment devices. Therefore, we believe that the non-UPI GMV (or GMV from MDR-bearing instruments) is not an appropriate measure to be focusing on for the foreseeable future, Paytm said in the statement, stating that it also has the ability to monetize transactions using every one of its payment instruments.

Paytm’s MTU average in Q1 FY23 was 74.8 Mn. It grew by 49 percent YoY and 6% in QoQ.

We believe that our device business, which attained a base of 3.8 million in the quarter of Q1 and is expected to continue to generate greater payment volumes in terms of subscription revenues, as well as merchant loan distribution Paytm added.

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Paytm has also stated that it is well financially financed by having net money equivalent, cash and an the balance that can be invested of 9,411 crore at the time at June 30, 2022.

The shares of the startup closed 3.2 less with an the price of INR 783.65 Cr at the BSE on Friday.

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