In a note to investors in Paytm’s annual report, managing director and chief executive officer Vijay Shekhar Sharma on Friday said the company is on track to achieve operational profitability by September 2023.
“I believe that over the past year, our team has done a great job in massively improving our revenues and contribution profits, which allow for investments in our payments and credit businesses while at the same time reducing our Ebitda losses. We are seeing excellent momentum in our businesses and are on track to achieve operating profitability (Ebitda before ESOP cost) by the quarter ending September 2023,” Sharma added.
One97 communications, the parent company of fintech major Paytm on Friday reported a lower net loss of Rs 1,441 crore for the year ended March 31, 2022 (FY22), compared to a loss of Rs 1,704 crore in the previous financial year. According to the company’s annual report filed with the stock exchanges, Paytm’s revenue from operations increased significantly by 77% YoY in FY22 to Rs 4,974 crore, compared to Rs 2,802 crore revenue reported in the previous year.
The fintech company’s total expenses for FY22, however, went up by 59% YoY to Rs 7,601.1 crore compared to Rs 4,783.0 in the previous year.
Additionally, Paytm’s Ebitda margin improved to -30.5% in FY22 compared to -59% in FY21. Its net profit margin also improved to -48.2% in FY22 compared to -60.7% in FY21.
A large chunk of Paytm’s revenues in FY22 came from its payments and financial services business, which increased 83% YoY to Rs 3,858 crore in FY22 from Rs 2,109 crore in FY21. This includes revenue recognised from payment services offered to both consumers and merchants, and revenue recognised from financial services partners or consumers in the form of financial services offerings, which primarily include lending.
The company’s revenue from commerce and cloud services grew 59% YoY to Rs 1,105 core in FY22 compared to Rs 693 crore in FY21.
The strong increase in Paytm’s revenue recognised from the payments services business is credited to the growth of its monthly transacting user-base (MTU), which stood at 70 million in Q4 2022. In the same quarter last year, the MTU base stood at just 50.4 million.
The fintech major’s lending business continued to scale up in FY22. Its lending partners disbursed over 15.2 million loans through the platform in FY2022, registering 478% growth over FY21. The value of loans grew 441% to Rs 7,623 crore in FY22, compared to Rs 1,409 crore in FY21.
Last month, Paytm revealed that its Buy Now Pay Later (BNPL) loan model contributed over 60% to its loan business, followed by the personal loan and merchant loan segments. At the same time, the Reserve Bank of India (RBI) directed non-bank prepaid payment instrument (PPI) issuers not to load PPI instruments using credit lines, which is likely to adversely impact the BNPL sector.
Shares of Paytm opened at Rs 720 a piece on Friday morning on the exchanges but closed at a lower of Rs 705 at the end of the day. Post its weak debut on the stock markets in November 2021, the company’s share price had taken a beating and decreased by over 54% since listing. Paytm originally listed at an issue price of Rs 2,150 per share last year.