One97 Communications, parent company of fintech platform Paytm, reported 51 per cent jump in revenue from operations at Rs 2,334 crore in Q4FY23 on an annual basis. The overall revenue in FY23 increased 61 per cent to Rs 7,990 crore. The company significantly brought down its net loss in the March quarter to Rs 168 crore from Rs 761 crore a year ago, and Rs 392 crore in Q3FY23.
The company said its revenue growth was led by an increase in gross merchandise value (GMV), higher merchant subscription revenues, and growth of loans distributed through the company’s platform.
GMV in the March quarter significantly rose 40 per cent to Rs 3.62 lakh crore YOY, while merchant subscriptions more than doubled.
The company has expanded its EBITDA before ESOP costs, including UPI incentive applicable for Q4, to Rs 101 crore in comparison to Rs 368 crore in Q4 FY22.
For FY23, EBITDA before ESOP cost stood at Rs 176 crore, which is much higher than Rs 1,342 cr a year ago. Paytm achieved its operating profitability milestone in Q3FY23, much ahead of its September 2024 guidance.
The payments and financial services company’s contribution profit improves to 49 per cent to Rs 3,900 crore in FY23, and contribution margin stands at 55 per cent in Q4 FY 2023.
The company reported that it has improved its payment profitability with Q4 FY23 net payment margin expanding 158 per cent to Rs 687 crore. Its net payments margin was Rs 554 crore, up 107 per cent YoY after excluding previous quarters’ UPI incentive.
In FY23, the company’s net payments margin grew 2.9X to Rs 1,970 crore, which was due to the profitability of the payment business despite a higher share of UPI.
Paytm’s subscription services for payment devices, such as Soundbox and POS machines, also saw strong adoption, with 68 lakh merchants paying Paytm subscriptions as of March 2023. This was 29 lakh merchants in the same period last year.
Payments
The company said that payments is their core business and its revenue from payment services was Rs 1,467 crore, which was up by 41 per cent in FY23. Considering Q4’s UPI incentive only, payment revenue grew 28 per cent YoY. Payments profitability further improved with Q4 FY 2023 net payment margin expanding 158 per cent YoY to Rs 687 crore.
“The growth of UPI and other mobile payment methods presents a wealth of untapped opportunities. We are prepared to capitalise on these opportunities by bringing innovative products to our customers,” the company said in its regulatory filing.
Loan disbursal
Paytm’s loan distribution business has continued to grow. In Q4 FY23, across its three product offerings – Paytm Postpaid, Personal Loans, and Merchant Loans – loans amounting to Rs 12,554 crore were distributed through the Paytm platform. As of March 2023, 95 lakh borrowers have taken a loan through the company’s platform, the company said in its regulatory filing. Its contribution margin was 52 per cent as compared to 35 per cent in Q4 FY 2022.
The company reported that the average ticket size for personal loans is currently at approximately Rs 130,000 with an average tenure of 15 months.
“With low penetration rates currently for each of our loan distribution products, we see a long runway for growth in this business,” the company said in a release.
Earlier in the day, analysts, who are tracking the stock, said the company might report a strong growth in revenue and gross merchandise value (GMV). Some expected the company to report a strong quarter-on-quarter (QoQ) growth in adjusted EBITDA and EBIT margins.
Citi analysts pegged Paytm’s revenue at Rs 2,274 crore, up 48 per cent YoY and 10 per cent QoQ, while its GMV was expected at Rs 362 crore, up 40 per cent YoY and 5 per cent QoQ. The fintech major’s adjusted EBITDA was expected around Rs 86.6 crore in Q4 FY23. Its EBITDA margins are seen at 4 per cent, 230 bps on QoQ basis.
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