Even as the Indian digital payments firm Paytm recorded a widened loss during Q4FY24 at Rs 549.60 crore from a loss of Rs 168.40 crore during the same period last year, as a result of the impact from RBI shutting down Paytm Payments Bank’s (PPBL) operations, InGovern, in a report stated that Paytm’s results showed resilience and growth. In an analysis report on Paytm’s FY 2023-24 results, InGovern said that despite regulatory challenges faced by the company, Paytm’s FY2023-24 results show resilience and growth. The company has also become the first fintech company in India to achieve an operating revenue milestone of almost Rs 10,000 crore.
For the full financial year FY24, Paytm recorded a revenue growth of 25 per cent to Rs 9978 crore, due to GMV growth, device additions, and growth in the financial services distribution business. Net payment margin has gone up 50 per cent to Rs 2,955 crore due to increase in payment processing margin and increase in merchant subscription revenues.
Per the report, Paytm can make a strong comeback if it focuses on payments as the core business and recovering the consumer and merchant base. “A leaner organisation structure will mean greater people productivity, improvement of business processes, and a re-evaluation of specific business segments,” it said.
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The company received UPI incentives of Rs 288 crore for FY 2024 (recorded in Q4 FY24), as compared to Rs 182 crore in FY23 (recorded in Q4 FY23). The financial services business reported a 30 per cent revenue increase due to growth in the value of loans distributed on the platform. The Marketing services business reported 14 per cent growth to Rs 1,738 crore, impacted by the lower MTUs in February and March. Contribution profit increased by 42 per cent to Rs 5,538 crore, driven by growth in net payment margin and higher-margin financial services business. On the back of growth and improvement in contribution margin, FY24 EBITDA before ESOP increased to Rs 559 crore (up Rs 734 crore).
Prior to ESOP costs for Q1 FY2025, EBITDA is projected to be between negative Rs 500 crore and negative Rs 600 crore, with improvements expected from Q2 FY2025 onwards. Per the InGovern report, improvements are expected to be backed by restarting paused products and achieving steady growth in operating metrics. As growth in consumer and merchant base has already started in April and May 2024, the addition of subscription merchants is expected to recover past trend lines by Q3 FY25, it added.
According to a company statement released yesterday, an undisclosed number of employees are being laid off from the fintech firm One97 Communications. The firm also claimed that it will provide outplacement support for their smooth transition.
Despite recent challenges, investors can look out for a strong sales and margin rebound by fiscal 2026.
From: financialexpress
Financial News
