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Despite a 89% percent increase in sales, Paytm’s third-quarter loss worsens

31 May 20234 mins read by Angel One
Despite a 89% percent increase in sales, Paytm’s third-quarter loss worsens
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The combined loss of digital payments business Paytm operator One 97 Communications increased to Rs 778.5 crore in the quarter ended December 2021, from Rs 535.5 crore the year before, despite considerable growth in the topline.

According to the company’s BSE report, the loss for the September 2021 quarter was Rs 473.5 crore. The company’s consolidated revenue from operations increased by 89 percent to Rs 1,456.1 crore in the December 2021 quarter, compared to Rs 772 crore in the previous fiscal. The topline increased by 34% over the previous quarter.

Paytm stated in a BSE filing on Friday that “strong growth is led by a rise in merchant payments processed via merchant discount rate bearing instruments, disbursements of loans on platform, and recovery of commerce business from pandemic effect.” “The stronger Christmas season demand, notably in online and offline merchant commerce, drove the QoQ growth,” it stated.

Payment services revenue to users grew by 60% year on year to Rs 406 crore. MDR-bearing instrument GMV increases, new significant partnerships in payment gateway services, and growth in device subscriptions drove revenue from payment services to merchants up 117 percent YoY to Rs 586 crore. Incentives obtained from partner banks for different payment relationships also contributed to the company’s expansion.

Financial services and other income increased by 201 percent year over year to Rs 125 crore in Q3FY2022, according to the corporation, while revenue from commerce and cloud services increased by 64 percent year over year to Rs 339 crore in the December 2021 quarter.

The firm accepts payments from all types of instruments and gets MDR on transactions involving MDR-bearing instruments. Paytm said that the number of customers on its platform had surpassed 35 million and that its merchant base had grown to 2.49 million, up from 2 million a year earlier. “Customers are staying with us longer and are more engaged.”

The business claimed that at the operational level, the loss fell to Rs 393 crore in Q3FY22, compared to a loss of Rs 488 crore the previous quarter and a loss of Rs 426 crore the year before. Operating costs climbed by 71.86 percent to Rs 2,317.40 crore in Q3FY22, compared to Rs 1,348.40 crore in the previous fiscal quarter.

Frequently Asked Questions (FAQs)

Q1. Why are Paytm’s shares dropping in value?

Paytm’s initial public offering (IPO) was the country’s largest to date. The corporation was able to raise Rs 18,300 crore from the main market as a result of this. The issue had garnered fewer than twice as many bids as the previous one. Its valuation was very high, and as a result, investors did not place much value on it. Paytm has lost Rs 50,000 crore to investors since its IPO. Paytm’s market worth before listing on the stock market was Rs 1.39 lakh crore, according to the IPO pricing, and it now has a market cap of Rs 88,139 crore.

Q2. What makes Paytm so unique?

Paytm is transforming India’s payment and financial services landscape. Paytm is changing the way people pay in India, and it’s opening up huge prospects for banks, insurers, and asset managers in the process.

Q3. What is the business model of Paytm?

Paytm makes money by charging merchants a transaction charge and customers a convenience fee, which is usually based on a percentage of the transaction value in the travel, entertainment, ticketing, and other commerce industries.

Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.

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