Paytm snaps 4-day losing streak; rises 4% post business update

Shares of Paytm parent, One 97 Communications, ended their four-session losing streak and gained nearly 4% in early trade on Friday after the payment solutions company released operating performance for the month of July. The fintech stock has fallen in nine out of the last ten trading days since July 21, a day after the company released its June quarter earnings report. The largecap has declined nearly 10% during the same period.

Early today, Paytm shares opened 2.3% higher at ₹785 against the previous closing price of ₹767.35 on the BSE. In the first two hours of trade so far, the counter gained as much as 3.86% to ₹797, while the market capitalisation rose to ₹49,790 crore. On the volume front, 0.5 lakh shares changed hands over the counter compared to a two-week average of 1.65 lakh stocks.

Paytm share price has witnessed decent growth in the last nine months, especially in the calendar year 2023, as the stock has rebounded 81% after hitting a 52-week low of ₹439.60 on November 24, 2022. The largecap stock trades nearly 13% lower than its 52-week high of ₹915 touched on June 19, 2023. In the last one year, the stock fell nearly 3%, while it jumped over 48% in the calendar year 2023. The counter has seen a growth of 41% in the six month period, while it has fallen 6% in a month.

In a late night filing on Thursday, Paytm said that its merchant payment volumes registered a growth of 39% year-on-year (YoY) to ₹1.47 lakh crore in the month of July. The loan distribution business during the month grew by 148% YoY to ₹5,194 crore, while the number of loans disbursed stood at 43 lakh, up 46% as compared to the year-ago period.

Average monthly transacting users (MTU) stood at 9.3 crore for the month, up 19% YoY, as per a regulatory filing made by the Noida-headquartered payments services firm.

“Our leadership in payment monetisation continues with the launch of two new innovative devices – Paytm Pocket Soundbox and Paytm Music Soundbox. Number of merchants paying subscription for payment devices has reached 82 lakh as of July 2023, an increase of 3.8 lakh devices in the month,” Paytm said in the BSE filing.

For the first quarter ended June 30, 2023, Paytm reported a consolidated net loss of ₹357 crore compared to a loss of ₹644 crore in the corresponding period last year and ₹168 crore in the March quarter (Q4 FY23).

The consolidated revenue from operations jumped 39.4% to ₹2,341 crore in Q1 FY24, from ₹1,679 crore in the year-ago period. However, it was flat as compared to ₹2,334 in Q4 FY23. The YoY growth in revenue was driven by an increase in merchant subscription revenues as well as Gross Merchandise Value (GMV) and growth in disbursements of loans through its platform, Paytm said in a release.

The contribution profit for the first quarter was up 80% YoY and 2% QoQ to ₹1,304 crore. The margin increased by 1,248 basis points (bps) YoY and 72 bps QoQ to 56%.  

At the operating level, EBITDA before ESOP improved to ₹84 crore, with margins at 4%, on the back of an increase in contribution margin and operating leverage.

During the quarter under review, the number of loans distributed through the Paytm platform grew to 1.28 crore, up 51% YoY, while the value of loans distributed surged 167% YoY to ₹14,845 crore.

In Q1 FY24, revenue for financial services and others grew 93% YoY to ₹522 crore on account of the increase in repo rates over the last year. The payments revenue grew by 31% YoY to ₹1,414 crore, led by an increase in GMV and higher subscription revenue. As of June 2023, the merchant subscriptions were 79 lakh, increasing 41 lakh YoY and 11 lakh QoQ. 

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