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Loss Narrows, Revenue Up 9%

Paytm’s first-quarter loss narrowed and revenue rose aided by its payments services business.

One97 Communications Ltd., the parent company of Paytm, reported a net loss of Rs 644.4 crore in the quarter ended June 30, according to its exchange filing. That compares with a net loss of Rs 761.4 crore in the January-March period and Bloomberg consensus estimate of Rs 789.4 crore loss.

Paytm Q1 FY23 (Consolidated, QoQ)

  • Revenue up 9% at Rs 1,679.6 crore (Estimate: Rs 1,701.4 crore)

  • EBITDA loss at Rs 633.90 crore (Estimate Rs 676.8 crore)

The main drivers for the top line were:

  • Increase in subscription revenues due to more payment devices.

  • Growth in bill payments due to rising monthly transacting users.

  • Growth in disbursements of loans by partners through Paytm.

  • Increase in commerce revenues.

Revenue from financial services, which now accounts for 16% of the consolidated revenue, rose 61% quarter-on-quarter to Rs 271 crore, largely due to improved sourcing and recoveries from the loan distribution business.

Oustanding loans disbursed by Paytm grew to Rs 5,554 crore as of June 30, up 56% quarter-on-quarter. This was largely due to postpaid or ‘buy now pay later’ loans, which accounted for Rs 3,383 crore loans disbursed — up 55% sequentially.

“…we believe there is ample opportunity for upsell in this business, while being conservative on the quality of the book (especially given the possibility of macro headwinds),” Paytm said in the exchange filing.

Gross merchandise value rose to Rs 3 lakh crore, from Rs 2.6 lakh crore as of March. A year ago, the GMV stood at Rs 1.5 lakh crore.

GMV from merchant discount rate-bearing instruments has grown 52% year-on-year. Government incentives have now also made merchant payments over UPI economically viable.

Shares of Paytm closed 3.8% lower on Friday before the earnings were announced compared with a nearly unchanged Nifty 50.

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