Paytm Q1FY24 Results: EBITDA before ESOP grows to ₹84 Cr

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Paytm, India’s leading payments and financial services company and the pioneer of QR and mobile payments, has announced Q1FY24 results where it has reported a massive improvement in EBITDA before ESOP cost of 84 Cr as compared to ( 275 Cr) in Q1 FY 2023. The company’s revenue from operations has seen a growth of 39% YoY to 2,342 Cr.

The company’s EBITDA before ESOP margin stood at 4% on the account of continuous surge in profitability due to robust revenue growth, increasing contribution margin and operating leverage. This does not include any UPI incentives, since it recorded UPI incentives after government issued the gazette notification, which is generally in the second half (H2) of the financial year. It managed to increase EBITDA while continue investment in growth.

It has seasonality in indirect costs as marketing expenses increase in Q1 due to IPL and employee costs increase due to appraisals. In the coming quarters, Paytm expects its continued topline growth and operating leverage to drive increase in profitability. In the last quarter of FY 2023, it reported EBITDA before ESOP of 234 Cr included 182 Cr UPI incentive for FY 2023. The company’s EBITDA before ESOP stands at 84 Cr as compared to 52 Cr in Q4 FY 2023 (excluding the UPI incentive).

The company’s strong growth momentum continues, which is backed by an increase in merchant subscription revenue, surge in merchant payments volume (GMV), and growth in loan disbursements. Paytm’s payments revenue increased 31% YoY to 1,414 Cr while the payments profitability improved with net payment margin expanding 69% YoY to 648 Cr.

Due to increasing share of non-UPI instruments at point-of-sale and focus on EMI processing through other banks’ credit and debit cards, and lower interchange cost for Postpaid, Wallet and other payment instruments, Paytm’s net payment processing margin has further improved and is now at the top end of 7-9 bps. In Q1FY24, the company’s GMV grew 37% YoY to 4.05 Lakh Cr.

Revenue for financial services and others grew 93% YoY to 522 Cr in Q1FY24 as Paytm continues to expand its credit business. Total number of unique borrowers who have taken a loan through its platform has increased by 49 Lakh over the last year to 1.06 Cr. The number of loans distributed through Paytm platform grew to 1.28 Cr, an increase of 51% YoY while the value of loans distributed grew to 14,845 Cr, surging 167% YoY across its three product offerings — Paytm Postpaid, Personal Loans, and Merchant Loans. Paytm disburses loans in partnership with marquee lenders and has onboarded Shriram Finance as a new lending partner.

The company continues to monetize Paytm app traffic in its Commerce and Cloud segment by providing marketing services to its merchants. In Q1FY24, its Commerce & Cloud revenue grew by 22% YoY to 405 Cr. Driven by increase in net payments margin and loan distribution revenues, Paytm’s contribution profit of 1,304 Cr represents a growth of 80% YoY while the contribution margin improved to 56% from 43% a year ago.

Paytm witnessed a robust growth in subscriber base that has nearly doubled in the last one year while its merchant base has grown to 3.6 Cr. The company’s leadership in payment monetisation continues with 79 Lakh devices, both Soundbox and Paytm Card Machines deployed, increasing 41 Lakh YoY and 11 Lakh QoQ. As adoption of digital payments for consumers and merchants in India continues, user engagement on the platform continues to grow with average Monthly Transacting Users (MTU) of 9.2 Cr, a jump of 23% YoY.

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