Paytm Q3 results: Net loss narrows to Rs 208 crore, revenue declines 36%

Fintech major Paytm on January 20 said its December quarter net loss narrowed to Rs 208 crore from Rs 220 crore in the year-ago period.

This comes after the firm turned black in the September quarter (Q2FY25) with a profit of Rs 930 crore on the back of gains made via sale of ticketing business to Zomato. However, without the exceptional gain, it continued to be in loss.

The company also reported a narrower sequential loss before exceptional items as its digital payments business recovered from the winding down of its payments bank unit and growth in other income.

The company's revenue fell 36% to Rs 1,828 crore in Q3FY25 as against Rs 2,850 crore in Q3FY24. On a quarter-on-quarter (Q-o-Q) basis, revenue grew 10 percent due to increase in GMV, growth in subscription revenues and increase in revenues from distribution of financial services, the firm said.

The firm managed to bring down its expenses by 31% Y-o-Y at Rs 2,219 crore, helping it keep a check on losses. Both Employee benefit costs and marketing expenses remained in control.

At 10:40 am on January 20, Paytm shares on BSE were trading 2.5% lower at Rs 880 apiece.

During the quarter, Paytm also completed the sale of its stake (stock acquisition rights) in Japan's PayPay Corporation for $280 million (Rs 2,372 crore). "The carrying value of SARs as of 30th September 2024 was Rs 1,984 crore", with the firm reported a change in fair value, including gain of Rs 388 crore.

As a result, Paytm's cash balance jumped to Rs 12,850 crore as compared to Rs 9,999 crore in previous September quarter.

Sale of subsidiary 

In an effort to simplify its corporate structure, Paytm's subsidiary Mobiquest Mobile Technologies (Mobiquest) approved the sale of its wholly owned subsidiary, Xceed IT Solutions (Xceed), for a nominal consideration. Xceed did not carry out any business from FY 2023-25.

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Revenue breakdown 

Of the total Rs 1,828 crore revenue, Rs 1,003 crore came from payments business (up 6% sequentially) while Rs 502 crore was contributed by financial services (up 34%) and Rs 267 crore from marketing services.

As of December 2024, Paytm claims to have 1.17 crore merchant subscriptions, an increase of 5 lakh Q-o-Q, with revenue per merchant increasing. The GMV also grew by 13%.

"As communicated earlier, we are picking up inactive devices and redeploying them at new merchants after refurbishment. We expect this strategy to continue for the next 1-2 quarters. This is leading to higher revenue per merchant and lower capex."

On the consumer payments side, after receiving RBI's approval to onboard new UPI customers in October, Paytm's Monthy Transacting Users (MTU) jumped to 7.2 crore in December 2024

from a low of 6.8 Crore in September.

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Financial services 

For financial services, Paytm credits the jump in revenue on account of higher share of merchant loans, higher trail revenue from Default Loss Guarantee (DLG) portfolio and better collection efficiencies. During the quarter, 5.9 lakh customers availed financial services, like loans, equity

broking, and insurance, through its platform. It disbursed f Rs 3,831 crore merchant loans, slight improvement from previous quarter, with  significant proportion under the DLG model.

Meanwhile, its recaliberation in personal loans continue since it adopted a distribution-only  model and on account of tightening risk policies by lenders. It disbursed nearly Rs 1,746 crore  personal loan in the quarter.

"We continue to see increased interest from lenders to partner using the DLG model for both Merchant and Personal Loans, which will help to increase disbursements with the existing partners and expand partnership with new lenders," it said.

The outstanding AUM amount for DLG portfolios as on December 31, 2024 was Rs 4,244 crore as compared to Rs 1,651 crore on September 30, 2024.