Paytm Q1 loss widens to ₹840 cr, revenue down 36%

Fintech major Paytm's parent One 97 Communications Ltd has reported a net loss of ₹840 crore for the April-June quarter of FY2024-25, up from ₹357 crore in the year-ago period, primarily affected by the RBI's restrictions on its former associate entity, Paytm Payments Bank (PPBL).

Vijay Shekhar Sharma-led company's revenue declined 36% to ₹1,502 crore in Q1 FY25 against ₹2,342 crore in the year-ago period. The revenue included ₹900 crore contributed by the payments business, while ₹280 crore came from financial services and ₹321 crore from marketing services. The company's net payment margin was ₹383 crore in Q4, with payment processing margin above 3bps.

Paytm says its payments business revenue was impacted by the disruption of PPBL products; temporary impact on account of the conservative approach taken for certain businesses; and temporary disruptions in operating metrics (MTU, merchant base, GMV). "No UPI incentive was received during the quarter as it gets paid in Q4 of the financial year," the company informs.

Paytm says it expects revenue and profitability to improve going forward. "Going forward, we expect revenue and profitability to improve, driven by growth in operating parameters such as GMV, an expanding merchant base, recovery in loan distribution business and continued focus on cost optimisation."

The company's EBITDA loss before ESOP stood at ₹545 crore. "We expect revenue and EBITDA Before ESOP to start improving from Q2 FY 2025 on account of growth in operating metrics and cost optimisation. Q1 FY2025 ESOP cost was lower at ₹247 Cr, on account of ESOP lapses at the time of employee separation during the quarter."

The company's cash balance as of June 30, 2024, stood at ₹8,557 crore compared to ₹8,650 crore as of the quarter ending March 2024.

Indirect expenses for Q1 FY 2025 (excluding ESOP cost) were ₹1,301 crore. Paytm says employee cost came down by 9% QoQ, in line with its stated guidance of annualised people cost savings of ₹400 - ₹500 crore. "We will continue to invest in the sales team while having a higher focus on the productivity of sales employees."

Paytm's Q4 FY24 loss had widened to ₹550 crore against ₹167 crore in the corresponding period a year ago. The loss had widened due to an impairment of ₹227 crore towards the carrying value of Paytm's investment in Paytm Payments Bank. The digital payments firm's revenue from operations had fallen 3% year-on-year to ₹2,267 crore in Q4 FY24 against ₹2,334 crore in Q4 FY23.

The Paytm share is trading 0.30% up at ₹446.40 on the BSE today (12.02 PM).