Paytm Reports A Soaring Loss of INR 840.1 Cr, up 134% YoY

Fintech giant Paytm announced a net loss of INR 840.1 Cr on Friday, July 19, for the quarter that ended in June 2024 (Q1 FY25). This is an increase of 134% from the INR 358.4 Cr recorded in the same period last year.

Additionally, operating revenue decreased 36% from INR 2,342 Cr in Q1 FY24 to INR 1,502 Cr during the reviewed quarter.

The company’s income from marketing services decreased 19% QoQ to INR 321 Cr this quarter, continuing its downward trend. In the March quarter prior, revenue from this channel similarly decreased 23% QoQ to INR 395 Cr.

Related: Fintech Leader InCred Nets ₹1,267 Cr Revenue, ₹316 Cr PAT in FY24

The finance giant stated that its new merchant signups are approaching January levels for the quarter. According to the company, subscription revenue per device has peaked and is predicted to soar as more merchants sign up.

It is important to remember that the Reserve Bank of India’s (RBI) crackdown on Paytm Payments Bank caused a setback for the company in this area. Many retailers started searching for other solutions after the RBI took regulatory action in order to prevent any business disruptions.

Paytm stated that going forward, it wants to transfer devices from inactive retailers to new ones. The company stated that as a result, it saw a slight growth in its merchant subscriber base, which increased to 1.09 Cr from 1.07 Cr in the March quarter prior.

Compared to the 14 lakh new merchants it added to its subscriber base in Q3 FY24, the 2 lakh new subscribers recruited during the quarter represented a considerable decrease. The business anticipates that in the third quarter of the current fiscal year, its net device merchant acquisitions will return to “previous run rates.”

The company’s financial services division generated INR 280 Cr in revenue during the quarter, down 8% on a QoQ basis from INR 304 Cr in the previous quarter. The company’s loan distribution decreased in the June quarter as well, following a significant sequential reduction in loans disbursed in the previous quarter. In Q1 FY25, its loan distribution was INR 5,008 Cr, slightly less than INR 5,079 Cr the quarter before.

Nonetheless, the business noticed a steady increase in its merchant loans. Paytm disbursed merchant loans totaling INR 2,508 Cr during the reviewed quarter, a 50% increase over the INR 1,671 Cr disbursed during the previous quarter. Paytm stated that going forward, it will concentrate on lending money to reputable retailers.

However, during the quarter, its distribution of personal loans suffered. Personal loan distributions from the company totalled INR 2,500 Cr, a 27% decrease from INR 3,408 Cr in the previous quarter. In the June quarter, the average ticket size for personal loans was INR 1.35 Lakh.

It has a gross merchant value (GMV) of INR 2,817 Cr. for ticketing, promotions, and gift cards, among other things. The startup stated under the sector that its travel business would drive its total growth in the foreseeable future.

“Partnerships and creative travel solutions are driving the travel segment’s continued robust growth. As mentioned (before), With a 19% YoY rise in flight reservations, Paytm outpaced the industry’s growth rate of roughly 3% and increased its market share among OTAs, the statement stated.

Regarding the possible acquisition of its ticketing venture, Paytm Insider, by Zomato, the company restated its position that no legally binding contract has been executed.

“The company regularly looks at different strategic opportunities with the goal of increasing value for shareholders. As a result, Paytm’s Entertainment division, which is a part of its Marketing Services, is being considered for possible transfer,” the statement stated.

The company’s shares, on Friday, increased by more than 6% during the BSE intraday trading session. On the BSE, the stock gave up part of its gains to close more than 3% higher at INR 458.70.