Paytm shares up on 76% surge in Q2 revenue at ₹1,914 cr

The shares of fintech company Paytm surged as much as 0.24% to hit an intra-day high of ₹668 despite the company’s consolidated net loss widened to ₹571 crore in the July to September quarter against ₹472 crore in the same period last year. The company posted a loss of ₹644 crore in the April to June quarter. However, its revenue in Q2 surged 76% YoY to ₹1,914 crore on accelerated device deployments, momentum in commerce & cloud, and growth in Paytm’s advertising, resumption of ticketing volumes, credit cards and PAI cloud.

Paytm shares opened higher on Wednesday at ₹652 against the previous closing price of ₹651 on the BSE. Notably, in the last three months, the fintech unicorn’s shares have declined by 21.74%. Its market capitalisation stands at ₹42,255 crore. The company, which saw one of the worst-performing IPOs in the past year, has wiped off 68% of investors' wealth since its listing. The stock made its market debut in November 2021 at an issue price of ₹2,150 and successfully raised ₹18,300 crore. The stock hit its all-time high of ₹1,961.05 on its listing day on November 18, 2021, while it touched a record low of ₹511 on April 5, 2022.

Meanwhile, Paytm’s revenue from operations witnessed a surge of 76% to ₹1,914 crore year-on-year (YoY) in the September quarter against ₹1,086 crore in the same period last year, according to the regulatory filing by One 97 Communications, Paytm’s parent company. On a sequential basis, the company’s revenue was up 14% against ₹1,679 crore in the April to June quarter. 

“On a QoQ basis, revenues grew 14% driven by growth in loan disbursements, continued growth in the merchant subscription base leading to increase in subscription and MDR revenues, and increase in payment gateway revenue driven by higher GMV in online business, primarily ecommerce. We have not recorded any UPI incentive this quarter as well,” the company said in a statement. 

Moreover, the company’s revenue in payment services to consumers business witnessed a growth of 55% YoY at ₹549 crore whereas the revenue in payment services to merchants surged 56% YoY at ₹624 crore. The company’s net payment margin surged 15% QoQ at ₹443 crore improved by monetisation and improvement in payment processing charges. 

“We are expanding our monetization base with the growth of users and merchants. Merchant subscriptions are an attractive profit pool for us, driving higher payment volumes, subscription revenues as well as merchant loan distribution,” the company said.

Its revenue in financial services, which accounts for 18% of its total revenue, witnessed an increase of 293% YoY at ₹349 crore, driven by strong sourcing and collection revenues. 

Meanwhile, Paytm's EBITDA  (earnings before interest, taxes, depreciation and amortisation) before ESOP was up 61% YoY at ₹166 crore as against ₹426 crore in the same period last year. This is a growth of 39% against ₹275 crore in Q1.

During the quarter, the company disbursed loans worth ₹7,313 crore. “The company’s revenue in financial services, which accounts for 18% of its total revenue, witnessed an increase by 293% YoY at ₹349 crore, driven by strong sourcing and collection revenues,” said Paytm.