The financial warhorse of fintech remains One 97 Communications-operated Paytm. The firm had a spectacular financial turnaround for Q2 FY25. Whereas in Q2 FY24, the firm incurred a loss to the tune of Rs 290.5 crore, they went on to record a profit to the tune of Rs 928.3 crore primarily thanks to a one-time gain of Rs 1,345 crore on selling their entertainment ticketing business to Zomato. Capitalising on this boom came a 34 per cent YoY fall in total revenue to Rs 1,660 crore. On the other hand, sequential quarterly revenue experienced an 11 per cent increase thanks to better directions of GMV, devices realization and a healthy 34 per cent increase in financial services revenue. The firm banked Rs 429 crore in the latter.
Paytm’s operational efficiencies have also contributed to performance, with indirect costs declining by 17 per cent from Q2 on the back of lower employee costs and marketing expenditure. Revenue from payments for the quarter grew by 9 per cent, driven by higher GMV and better monetisation, including an increase in merchant subscriptions. Revenue from financial services jumped by 34 per cent on a quarter-on-quarter basis, driven by better quality in merchant loan collection and an increase in the share of high-margin merchant loan products.
Turning to the future, it notes that Paytm ‘maintain focus on cost discipline’, with cuts in headcount and marketing costs ‘more than guidance’ given earlier. It says that the payments processing margin remains well-preserved and it will work to build a larger user-base and engagement in the coming quarters. The company’s stock fell by more than 3 per cent after the results’ announcement. Operational highlights remain strong.
Source: Economic Times
