One 97 Communications Ltd, which runs Paytm, on May 22 reported net loss of Rs 550 crore in Q4FY24, a 3.2X jump compared to Q4FY23, as its margins took a hit post RBI’s crippling ban on its associate company, Paytm Payments Bank (PPBL) on January 31.
The revenue from operations was down by 2.9 percent year on year (YoY) at Rs 2,267 crore, against Rs 2,334 crore in the same period last year.
Compared to the previous quarter, the company's revenue was down by 20 percent.
In order to offset some of the impact, Paytm managed to curtail its marketing expenses activities in the quarter, bringing it down by 16 percent Quarter on Quarter at Rs 2,691 crore while keeping it stable Y-o-Y.
Paytm managed to close its FY24 with 25 percent growth in revenue at Rs 9,978 crore while the losses narrowed to Rs 1,442 crore, drop of 19 percent compared to FY23.
"We demonstrated strong revenue momentum (up 25%) and continued our disciplined focus on profitability (EBITDA before ESOP margin up by 8%), in spite of regulatory action on our associate entity PPBL," it added.
Paytm claims to have successfully transitioned its core payment business from PPBL to other partner banks. "This move de-risks our business model and also opens up new opportunities for long-term monetisation," the company said.
The company said it expects near-term financial impact to its revenue and profitability, on the back of pausing of PPBL wallet and other payments and loan products.
The central bank, on January 31, 2024, had asked PPBL to stop offering banking services effective March 15, 2024, citing concerns of non-compliance with regulatory guidelines.
Since then, Paytm, which powered most of its services via the associate entity, has been aggressively working to communicate with merchants and stakeholders to avoid misinterpretations regarding the impact of the directions on Paytm, besides forging new partnerships with banks for UPI infrastructure and QR codes, previously powered by PPBL.
On March 14, NPCI granted approval to OCL to participate in UPI services as a TPAP under the multi-bank model.
Payment business
In Q4 FY 2024, payments revenue grew by 7 percent YoY to Rs 1,568 crore, but was down by 9 percent QoQ, as the gross merchandise value (GMV) and subscription revenue took a hit.
For the entire year, Paytm earned a revenue of Rs 6,235 crore, a jump of 25 percent.
As of March 2024, there are 1.07 crore merchants paying subscription for devices, an increase of 39 lakh.
Net payment margin increased 24 percent YoY to Rs 853 crore for the said quarter, while it stood at Rs 2955 for FY24, a 50 percent rise.
In Q4FY24, GMV grew 30 percent YoY to Rs 4.7 lakh crore.
Payment margins are dependent on what Paytm earns from non-UPI instruments like post-paid, EMI, and cards, and subscription charges on devices sold to merchants.
Lending business
Paytm's lending business took a major hit in the March quarter, as the it had put a temporary halt on new loans to resolve operational issues, and regain banking partners' confidence given the material governance concerns.
This had come merely two month after the firm was calibrating the impact of slowdown in unsecured consumer lending, the impact of which was reflected in its December quarter financials.
In Q4FY24, revenue from financial services and others declined 36 percent YoY to Rs 304 crore, on account of lower loan distribution. Non-lending revenue increased YoY, but was down marginally QoQ due
to business disruption.
The value of disbursed loans plunged to Rs 5,799 crore from Rs 15535 crore in December quarter.
Of the total disbursement, merchant loans contributed Rs 1671 crore (down by 28 percent YoY) while personal loans contributed Rs 3408 crore. The average ticket size for both the products also increased.
After a temporary pause of almost over a month, Paytm had resumed lending activities in March end, starting with merchant loans in partnership with existing allies—SMFG India Credit (formerly Fullerton) and Shriram Finance, as reported by Moneycontrol.
This is being updated, please come back for more updates.
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