Paytm releases operating performance for May; here’s how stock reacted

Shares of One 97 Communications, the parent of Paytm, remained in focus on Monday after the financial technology company released its monthly business update for May, 2023. The digital payments and financial services disbursed ₹5,502 crore ($666 million) in May through Paytm platform, while disbursements in the quarter to date (for April & May 2023) stood at ₹9,618 crore ($1.2 billion).

Continuing its gaining streak for the third straight session, Paytm shares opened higher at ₹724 against the previous closing price of ₹717.55 on the BSE. In the early trade so far, the fintech heavyweight gained as much as 1.1% to ₹725.45, while the market capitalisation rose to ₹45,533 crore. The largecap stock has gained over 4% in the past three sessions.

At the current day’s high level, Paytm share price trades 16% lower than its 52-week high of ₹844.40 touched on September 8, 2022. The stock has climbed 65$ against its 52-week low of ₹439.60 hit on November 24, 2022.

The counter has delivered 16.5% returns to its shareholder in the last one year, while it jumped 34.5% in the calendar year 2023. In the last one month, the stock has risen 4%, while it added 1.5% in a week.

Paytm in its monthly business update said that the company continued expansion of consumer base with average monthly transacting users (MTU) at 9.2 crore for the quarter to date (for April & May), registering a growth of 24% year-on-year (YoY).

The company further said that it has received new milestone in offline payments leadership, with 75 lakh merchants paying subscription for payment devices, an increase of 4 lakh in the month of May 2023. “With our subscription as a service model, the strong adoption of devices drives subscription revenues and higher payment volumes, while increasing the funnel for our merchant loan distribution,” it said.

The total merchant gross merchandise value (GMV) processed through its platform for quarter to date (for Apr & May) was ₹2.65 lakh crore ($32.1 billion), marking a YoY growth of 35%.

Meanwhile, total loan disbursements through its platform for the quarter to date (for Apr & May) growing 169% YoY to ₹9,618 crore ($1.2 billion).

“We continue to see growth in distribution of Postpaid and Personal Loans. We have partnered with large NBFCs and Banks and we continue to focus on quality of loans distributed through our platform. We currently have 7 lending partners and we aim to onboard 3-4 partners in FY 2024,” it said.

For January-March quarter of 2023, the Vijay Shekhar Sharma-led payment solutions company reported a consolidated net loss of ₹168.4 crore, against a loss of ₹761.4 crore in the same period of the previous year and a loss of ₹392 crore in 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 GMV, higher merchant subscription revenues, and 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 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. 

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