Paytm shares jump 5% on healthy Q4 numbers; extend rally for 6th session

Shares of One 97 Communications, the parent of Paytm, surged over 5% in early trade on Monday on the back of strong volume trade, after the fintech major reported healthy earnings in the March quarter of 2023. The large-cap stock has been rising for the last six sessions and gained nearly 13% during the same period.  

The Vijay Shekhar Sharma-led payment solutions company registered a sharp decline in its net loss during the quarter under review, driven by strong revenue growth and improvement in margins. The Noida-based financial technology company reported a consolidated net loss of ₹168.4 crore in the fourth quarter of FY23, against a loss of ₹761.4 crore in the same period of the previous year and a loss of ₹392 crore in the December 2022 quarter.

For Q4FY23, the revenue from operations stood at ₹2,334.5 crore, up 51.5% from ₹1,540.9 crore in Q4FY22 and 13.2% from ₹2,062.2 crore. The revenue growth was aided by rise in Gross Merchandise Value (GMV), higher merchant subscription revenues, and a surge in loans distributed through its platform.

On the operational front, Paytm’s EBITDA before ESOP cost improved by ₹602 crore YoY to ₹234 crore in Q4FY23 from a loss of ₹368 crore in the year-ago period. In the December quarter of 2022, EBITDA before ESOP cost was ₹31 crore.

The gross merchandise value (GMV), the value of goods sold via customer-to-customer or e-commerce platforms, jumped 40% YoY and 4.6% QoQ to ₹3.62 lakh crore in Q4 FY23. 

During the quarter under review, the average monthly transacting users (MTU) increased 27% YoY to 9 crore, aided by a continued rise in the adoption of mobile payments by consumers and merchants in India.

For the financial year 2022-23, the revenue climbed 61% to ₹7,990 crore from ₹4,974 crore in the previous year. The net loss narrowed to ₹1,776 as compared to ₹2,396 crore in the last fiscal. The EBITDA loss before ESOP cost declined to ₹176 crore from ₹1,518 crore in FY22.

Reacting to Q4 numbers, shares of Paytm opened 1.2% higher at ₹698 against the previous closing price of ₹689.45 on the BSE. In the first two-hour of trade so far, the fintech stock rose as much as 5.2% to ₹725.60, while the market capitalisation climbed to ₹45,791 crore. The largecap stock touched its 52-week high of ₹844.40 on August 8, 2022, and a 52-week low of ₹439.60 on November 24, 2022.

Paytm, which made its market debut on November 18, 2021, was one of the worst-performing initial public offerings (IPOs) in 2022, but it witnessed a steady rebound in the last one year. The company, which raised ₹18,300 crore via IPO, the country's second-largest after LIC’s ₹20,560 crore public issue, has delivered nearly 30% returns to its shareholders in the past one year, while the counter added 12% in the six-month period. In the calendar year 2023, the stock has risen 35.5%, whereas it has gained 10% in a month.

In a separate development, Paytm on May 6 also released an operating performance update for April 2023. Average monthly transacting users (MTU) stood at 9.2 crore for the month of April 2023, up 25% YoY, whereas merchant payment volumes (GMV) grew 34% YoY to ₹1.27 lakh crore. The company said that its loan distribution business continued to gain scale with disbursements of ₹4,115 crore (YoY growth of 148%) and 41 lakh loans (YoY growth of 56%) in April 2023 through the Paytm platform.

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