Payments firm Paytm reported a 39.4 percent growth in revenue at Rs 2,341 crore for the June quarter (Q1), even as the company narrowed its losses by 45 percent to Rs 358 crore in Q1 from Rs 645 crore it had reported during the same period of last financial year.
Paytm's overall metrics seem to be improving better than expected with the net payment margin going up, owing to the increase in merchant subscription revenues. Its payment processing margin also improved due to non-UPI transactions such as card and EMI instruments growing relatively faster for the company.
The Noida-based company's ESOP expenses for the quarter stood at Rs 377 crore, higher than its losses indicating that the company is approaching net income level by middle of next financial year as predicted by analysts.
Paytm has also granted 17 lakh shares to its employees with the exercise price option of Rs 9 during June quarter. The cost could come to around Rs 142.5 crore as of the share price of the company on July 21. The company also cancelled 53,250 stock options this quarter, which was granted earlier and the savings on this could come to about Rs 4.5 crore.
The company saw its revenue from payments business go up by 31 percent during the quarter to Rs 1,414 crore. The net payment margin was up 69% year-on-year to Rs 648 crore.
It reported a 93 percent increase year-on-year in revenue from financial services including from its successful and rapidly growing lending marketplace platform to Rs 522 crore.
The company's cash balance has increased to Rs 8,367 crore during the quarter ending June 2023, as compared to Rs 8,275 crore during the quarter ending March 2023.
Paytm's credit distribution business reported a 167 percent year-on-year (YoY) growth for the June quarter, disbursing Rs 14,845 crore in loan value. The overall number of loans facilitated on the payments platform grew to 1.28 crore, a 51 percent increase. The company earns a commission from distributing credit on its platform.
Merchant payment volumes, or GMV (gross merchandise value), for the June quarter stood at Rs 4.05 lakh crore, a YoY growth of 37 percent.
Paytm has four different types of credit portfolios – Paytm Postpaid, personal loan, merchant loan and its co-branded credit cards.
The Noida-based payments platform has seen its monthly transacting user base grow to 9.2 crore from 7.5 crore (a 23 percent YoY jump) it had during last year's June quarter. The number of payment devices deployed grew to 79 lakh, which almost doubled from the 38 lakh devices it had deployed during the same period of the previous fiscal.
The devices include point-of-sale (POS) devices and soundboxes that announce scan-and-pay transactions. The company earns monthly rent from both types of devices. It added 11 lakh devices during Q1FY24.
Paytm continues to be the third-largest player in the UPI ecosystem, the country's most popular digital payment method, with over nine billion monthly transactions and close to Rs 15 lakh crore in transaction value. PhonePe and Google Pay occupy the first and second spots in the ecosystem, respectively.
Its market share on the UPI platform stands at around 13 percent. Its rival PhonePe has also started a merchant lending business this quarter.
Paytm currently has seven financial partnerships for its loan distribution and plans to onboard three to four more players during this fiscal. The company also announced a loan distribution partnership with Shriram Finance early this month.
Shares of Paytm’s parent One97 Communications Ltd closed at Rs 843.55 a piece on the BSE earlier on July 21, a drop of 0.89 percent from previous close.
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