Fintech Giant’s Loss Widens 21% YoY To INR 571 Cr

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Paytm’s net loss narrowed on a quarterly basis from INR 645 Cr reported in the preceding June quarter

Revenue from operations surged 76% to INR 1,914 Cr from INR 1,086 Cr in September quarter of 2021

ESOP costs rose a staggering 1,823% to INR 371 Cr from INR 19 Cr in Q2 FY22

Fintech giant Paytm’s net loss widened 21% year-on-year (YoY) to INR 571 Cr in the second quarter (Q2) of the financial year 2022-23 (FY23). The startup had reported a net loss of INR 474 Cr in Q2 FY22. Sequentially, loss declined 11% from INR 645 Cr.

Revenue from operations surged 76% to INR 1,914 Cr from INR 1,086 Cr during the corresponding period last year on the back of increase in merchant subscription revenue, growth in bill payments and disbursement of loans through the platform. On a quarter-on-quarter basis (QoQ), operating revenue grew 14% from INR 1,680 Cr.

While payments services to consumers accounted for INR 549 cr of the total revenue, payments services to merchants formed INR 624 Cr of the revenue. Further breakdown of the data revealed that the financial services contributed INR 349 Cr of revenue, while commerce and cloud services added INR 377 Cr to the total revenue kitty.

In a similar vein, expenses grew 60.4% to INR 2,561.4 Cr during the quarter under review from INR 1,599.4 Cr in Q2 FY22. Employee benefits accounted for the biggest chunk of expenses at INR 944.1 Cr, a steep increase of 144% from INR 386.5 Cr in Q2 FY22. 

Marketing and promotional expenses surged to INR 327.5 Cr in the quarter under review, up 76% YoY. 

EBITDA loss, excluding ESOP costs, narrowed 61% YoY to INR 166 Cr from INR 426 Cr in the year-ago quarter. The company attributed this to strong operating leverage despite continued investments in technology, sales and marketing.

“Our Q2 FY 2023 results show momentum across our operating and financial metrics. We are pleased to show strong growth in revenues and contribution profit, combined with operating leverage, which has allowed us to show sharp improvement in EBITDA before ESOP costs,” said Paytm.

Meanwhile, ESOP costs in the quarter rose a staggering 1,823% to INR 371 Cr from INR 19 Cr in the corresponding quarter of last year. On a QoQ basis, ESOP costs rose 3% from INR 359 Cr.

The quarter also saw Paytm’s gross merchandise volume (GMV) grow 63% YoY to INR 3.2 Lakh Cr, primarily on account of ecommerce festive sales. Average monthly transacting users (MTU) also zoomed to 79.7 Mn in the quarter driven largely by an increase in registered merchant base which expanded to 29.5 Mn.

Merchant transactions grew 114% to 5.75 Bn in the quarter ended September 2022 as against 2.69 Bn in the corresponding quarter last year. The total transaction volume stood at 6.88 Bn in Q2 FY23, up 108% YoY. 

In the quarter under review, Paytm disbursed 91.92 Lakh loans worth INR 7,313 Cr. In comparison, the fintech major had distributed 28.41 Lakh loans worth INR 1,257 Cr in Q2 FY22.

At the end of September 2022, Paytm claimed that it had deployed 4.8 Mn payment devices compared to 1.3 Mn at the end of Q2 FY22. 

In the past one month, Paytm shares have fallen by more than 7% on the BSE amidst a plummeting market capitalisation. On Monday, shares ended 0.27% higher at INR 651.95 on the BSE.

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