One 97 Communications Ltd, the parent company of Paytm, on Monday reported its fiscal third quarter earnings wherein it reported a loss of Rs 208.50 crore, down from a loss of Rs 221.70 crore recorded during the same period of previous financial year. This came after the company had turned black in the second quarter of FY25 with profit for the period at Rs 928.30 crore. The profit during the previous quarter was due to one-time exceptional gain of Rs 1,345 crore, on account of sale of entertainment ticketing business.
For Q3FY25, Paytm posted revenue from operations at Rs 1827.80 crore, down 35.88 per cent in comparison to Rs 2850.50 crore recorded during the same period of previous financial year.
On a sequential basis, the company’s revenue rose 10 per cent due to increase in GMV, healthy growth in subscription revenues and increase in revenues from distribution of financial services. “Growth in net payment margin was largely on account of higher subscription revenue. Payment processing margin continues to remain in the guided range. Higher Financial Services revenue was on account of higher share of merchant loans, higher trail revenue from Default Loss Guarantee (DLG) portfolio, and better collection efficiencies,” the company said in an exchange filing.
Paytm said that the company managed to reduce its indirect cost by 7 per cent QoQ and 23 per cent YoY to Rs 1000 crore. Going forward, it said, “We expect calibrated growth in marketing costs and sales employee expenses as we invest in customer and merchant acquisition. Our employee costs (excluding ESOP) for 9MFY25 is lower by Rs 451 crore YoY, and will comfortably surpass our targeted annualised people cost savings of Rs 400- 500 crore.”
Q3 performance across business verticals
Paytm’s payment services recorded revenue at Rs 1059 crore, up 8 per cent QoQ, led by increase in GMV, and increase in merchant subscriptions. The financial services posted Q3 revenue at Rs 502 crore, up 34 per cent QoQ. It said that the gross merchandise value (GMV) stood at Rs 5 lakh crore, up 13 per cent QoQ. Further, the merchant subscriber base for devices reached 1.17 crore as of Dec’24, posting an addition of 5 lakh QoQ. Subscription revenue growth, it said, was driven by higher revenue per merchant.
In Q3, Paytm’s average MTU (Monthly Transacting Users) was at 7.0 crore, as compared to 7.1 crore in Q2FY25, because of a lower exit run-rate of 6.8 crore MTU in Q2FY25.
Key updates
During the quarter, the National Payment Corporation of India (NPCI), vide letter dated October 22, 2024, granted approval to the company to onboard new UPI users, with adherence to all NPCI procedural guidelines and circulars.
Also, the Government of India, Ministry of Finance, Department of Financial Services, vide its letter dated August 27, 2024, approved downstream investment from One 97 Communications Limited (OCL) into a wholly owned subsidiary, Paytm Payments Services Limited (PPSL). Post the FDI approval, PPSL has resubmitted its Payment Aggregator (PA) application to the Reserve Bank of India (RBI). “While we await the RBI approval for onboarding of new online merchants, PPSL continues to provide payment aggregation services to its existing online merchants,” the company said.
During the quarter, One97 Communications Singapore Private Limited (OCL Singapore), a subsidiary of the company, completed the sale of all the Stock Acquisition Rights (SAR) held by it in PayPay Corporation, Japan. The transaction was completed on December 13, 2024 and OCL Singapore received a consideration of $280 million (Rs 2372 crore). The carrying value of SARs as of 30th September 2024 was Rs 1984 crore.
