One97 Communications, the parent company of payments major Paytm, continues to see improvement in its financial performance, supported by strong revenue, increased in contribution margin, and operating leverage. The consolidated net loss narrowed to ₹292 crore in Q2 FY24, against a loss of ₹571 crore in the year ago period and ₹358 crore in June quarter of FY24, with its overall direct expenses dipping to ₹1,093 crore during the quarter under review.

The consolidated revenue of Vijay Shekhar Sharma-led company rose 32% to ₹2,519 crore for the second quarter ended September 2023, from ₹1,914 crore in the corresponding period last fiscal, driven by increase in merchant subscription revenues, increase in gross merchandise value (GMV) and growth in disbursements of loans through our platform. Sequentially, the revenue grew 7% from ₹2,341 recorded in June quarter of the current financial year. 

The contribution profit jumped 69% year-on-year (YoY) to ₹1,426 crore, while EBITDA without counting employee stock option (ESOP) costs stood at ₹153 crore compared to a loss of ₹166 crore in Q2 FY23.

As per the company, the payment business continues to scale led by increase in GMV and higher subscription revenue. In Q2 FY 2024, payments revenue grew by 28% YoY to ₹1,524 crore, despite some of the revenues getting pushed to Q3 FY24, it said.

“In this financial year, online sales for the festive season will be captured in Q3, whereas in the previous financial year it was largely in Q2”, Paytm said in its earnings report.

Meanwhile, payments profitability improved with net payment margin expanding 60% YoY to ₹707 crore. In Q2 FY24, GMV rose 41% YoY to ₹4.50 lakh crore despite no UPI incentives, aided by improvements in payment processing margin on non-UPI instruments like Postpaid, EMI, and cards.

As of September 2023, merchant subscriptions were 92 Lakh, increasing 44 lakh YoY and 14 lakh QoQ. The number of merchant loans distributed grew 130% YoY in Q2 FY24, while the value of these loans increased by 171% YoY to ₹3,275 crore.

In Q2 FY24, the number of loans distributed through its platform grew to 1.32 crore, a growth of 44% YoY. The value of loans distributed grew to ₹16,211 crore, a growth of 122% YoY.

As of September 30, 2023, Paytm’s cash balance stood at ₹8,754 crore, as compared to ₹8,367 crore in June quarter of 2023. “We have now added cash balances for three consecutive quarters, adjusted for ₹1,056 crore of funds used for buyback (including buyback tax and other transaction costs) in Q3 and Q4 of FY23,” it said.

During the quarter, Founder and CEO Vijay Shekhar Sharma acquired 10.3% stake in Paytm from Antfin (Netherlands) Holding B.V, through his 100% owned overseas entity, Resilient Asset Management B.V. With this, Sharma raised his holding in the company to 19.42%, becoming the largest shareholder in the fintech major, while Antfin’s stake dropped to 13.5%.

Ahead of Q2 results, Paytm shares ended 1.93% higher at ₹987.35 on Friday on the BSE.

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