Paytm parent One97 Communications saw its net loss widening to Rs 550 crore in the January-March quarter from Rs 168 crore a year ago due to a fall in revenue from operations.
The operating revenue in Q4 fell 3% y-o-y to Rs 2,267 crore, impacted by temporary disruptions in business operations.
The fintech firm warned of job cuts and said it would trim non-core assets as it saw its revenue decline 3% in the quarter to Rs 2,267 crore — the first drop since its listing on the bourses in 2021.
For FY24, the company’s loss narrowed to Rs 1,422.4 crore from a loss of Rs 1,776.5 crore in FY23.
The company’s fourth quarter results were impacted by Reserve Bank of India’s (RBI’s) embargo on Paytm Payments Bank. On January 31, RBI prohibited Paytm Payments Bank from accepting additional deposits and top-ups, as well as conducting credit transactions in customer accounts, among other restrictions.
“We expect near-term financial impact to our revenue and profitability, due to disruptions faced in our business in Q4. This includes steady state impact due to pausing of PPBL wallet,” founder and chief executive officer Vijay Shekhar Sharma said in a letter to shareholders.
“We had also paused a few other payments and loan products to our customers during the last quarter, and I am happy to share that many such products have been restarted or in the process of starting soon.,” he added.
The company’s earnings before interest, taxation, depreciation, and amortisation(Ebitda) before ESOP fell to Rs 103 crore in the March quarter from Rs 234 crore a year ago. Excluding UPI incentives, Ebitda before ESOP came in at Rs 185 crore.
The company’s payments services revenue rose 7% y-o-y to Rs 1,568 crore in the March quarter. However, the payments services revenue fell 9% quarter-on-quarter (q-o-q) due to the disruption of the products of Paytm Payments Bank, temporary impact on account of conservative approach taken for certain businesses, and temporary disruptions in operating metrics like merchant transacting users, merchant base, and gross merchandise value. The net payment margin rose 24% y-o-y to Rs 853 crore in the quarter under review. The merchant subscriptions rose to 10.7 million as on March 31 from 6.8 million a year ago.
On the lending front, the value of loans distributed fell 54% y-o-y to Rs 5,776 crore in the quarter under review. The value of merchant loans distributed declined 28% y-o-y to Rs 1,671 crore while the value of personal loans distributed declined 1% y-o-y to Rs 3,408 crore.
The value of postpaid loans distributed declined 90% y-o-y to Rs 720 crore as the company paused the business due to delinquencies trends in small-ticket loans.
In a post-earnings analyst call, president and group CFO Madhur Deora said the company will be back on the path of profitability soon, without specifying any timeline.
“While we have mentioned that the next quarter (April-June) will be Ebitda negative, we will get back very quickly on the path of profitability,” Deora said.
