Worst is behind us, board will ensure 'attention to governance': Paytm's Vijay Shekhar Sharma

Paytm founder Vijay Shekhar Sharma

Paytm's Vijay Shekhar Sharma assured investors during a con-call on May 22 that the worst for the company is over and that the board has been strengthened to ensure 'attention to governance'.

“We learnt a lot of lessons, shown resilience in the last three months. The worst is behind us,” Sharma said.

Chief financial officer Madhur Deora told investors that Paytm is exercising 'extreme caution' on personal loans and has a distribution-only model here.

Also read: Paytm to exit postpaid loans, focus on distribution-only credit model

Here are some of the key comments made by the management:

Vijay Shekhar Sharma, CEO

-Many of our teammates went through the test of time, where they learnt what was needed to be done. As a 'Paytmer', I couldn’t be more proud of their commitment.

-We had two months of impact on quarter results, but the annual performance was better than last year.

-Attention to governance remains a prime focus. Will have more subject matter experts and independent directors on boards.

-Will continue to invest on sales and marketing teams. Will focus on leaner organisation with a focus on profitability.

Madhur Deora, CFO

-This is our first full year of EBITDA profitability since IPO. Merchant business has started to grow. Daily transacting users have stabilised starting May.

-Payments business has come off its worse. Twelve percent GMP was coming from businesses that were discontinued/disrupted. Excluding them,  we are down 6% and 30-34% higher annually.

-Extremely cautious on personal loans with collection. A distribution-only model has been adopted for personal loans. Expect take rate to be 3-3.5%.

-Expect incremental EBITDA impact of Rs 100-150 crore in Q1FY25. Also expect improvement from Q2FY25 on stabilization or growth in consumer and merchant base from April/May.

Also read: Paytm CEO hints at layoffs, expects near-term financial impact due to disruptions in Q4

On payment aggregator licence (VSS)

-Inter-ministerial committee meeting will be due once the government gets formed. We are in the waiting phase. There is no risk of this on our existing or new merchants. We didn’t lose any merchant.

On paring down collection service for lenders:
-We have taken a call that market comes back, we will not do collections activity. If we are not going to generate bonus, we won’t do it. We are looking at other opportunities.

-We are trying secured credit also, hasn’t materialised but we are experimenting. Integrating Micro Lap (Loan against property) for smaller merchants.