Paytm's Q3 FY24: Strong Revenue Growth, Controlled Losses, and Strategic Shifts Drive Financial Progress

23 Jan 2024 , 02:09 PM

Paytm’s parent company, One97 Communications, reduces net loss to Rs 221.7 crore in Q3FY24, a significant improvement from Rs 392 crore in Q3FY23.

Sequentially, the company continues to cut losses from Rs 291.7 crore in the previous quarter, showcasing financial progress.

Robust revenue growth: Revenue from operations surges by 38.2% YoY to reach Rs 2,859.5 crore in Q3FY24.Payment services driving revenue: Paytm’s revenue from payment services rises to Rs 1,730 crore in Q3FY24, reflecting a 13.5% increase from Q2FY24.

Strong year-over-year performance: YoY payment services revenue sees a substantial 45% growth, reaching Rs 1,197 crore in Q3FY23.

Improved profitability: Payments profitability witnesses a remarkable 63% YoY rise, totaling Rs 748 crore in Q3FY24.

Controlled expenses: While expenses increase by 9.5% QoQ to Rs 3,216.3 crore in Q3FY24, the company manages a significant YoY growth of 27.5%.

Marketing expenditure: Marketing expenses rise by 8% in Q3FY24 to Rs 275.2 crore, indicating strategic investment in business promotion.

Loan distribution decline: Paytm records a 4% QoQ decline in disbursed loans, totaling Rs 15,535 crore in Q3FY24.

‘Buy now, pay later’ loans decrease: The company sees a 16.8% decline in ‘buy now, pay later’ loans to Rs 7,496 crore in Q3FY24.

Shift in focus: Paytm strategically shifts its focus from small-ticket size loans to disbursing higher-ticket personal and merchant loans in collaboration with larger financial institutions.

Merchant loans growth: Steady growth in merchant loans business, with disbursements reaching Rs 3,579 crore in Q3FY24, a 9.2% increase from Q2FY24.

Year-over-year expansion: Merchant loan disbursements experience a substantial 96% YoY growth, demonstrating business success.

Future plans: Paytm aims to add four lending partners by Q1FY25 to accelerate its high-ticket size loans’ business.

Technological deployment: The company deploys 1.4 million merchant devices, including soundboxes and POS devices, in Q3FY24.

Expanding merchant base: The base of merchant subscribers grows to 10.6 million in Q3FY24, showcasing a significant expansion from the previous quarter.

Operating leverage and outlook: Paytm anticipates operating leverage in marketing costs, expecting slower growth in indirect costs in the coming quarters.

Strategic anticipation: Paytm plans to add four lending partners by Q1FY25 to further enhance its high-ticket size loans’ business, emphasizing strategic growth.

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