Paytm, India’s leading payments and financial services distribution company, reported robust performance in Q2FY25, with operating revenue reaching Rs 1,660 Cr, marking a 11 per cent growth quarter-on-quarter (QoQ). Moving towards profitability, Paytm’s EBITDA before ESOP improved by Rs 359 Cr QoQ to Rs (186) Cr. A key highlight was the sale of the entertainment ticketing business to Zomato, contributing an exceptional gain of Rs 1,345 Cr, which boosted Profit After Tax (PAT) to Rs 930 Cr. The company reported an EBITDA of Rs (404) Cr, an improvement of Rs 388 Cr QoQ.
Showing signs of profitability, the company's contribution profit saw an impressive 18 per cent rise to Rs 894 Cr, driven by improved margins in payment services and financial services. Paytm’s net payment margin grew 21 per cent QoQ to Rs 465 Cr, while Gross Merchandise Value (GMV) expanded by 5 per cent to Rs 4.5 Lakh Cr QoQ.
The company’s revenue from payment services was Rs 981 Cr, financial services was Rs 376 Cr, marketing revenue was Rs 302 Cr. Due to migration of users to TPAP model and natural churn, Monthly Transacting Users (MTU) base, now at 7.1 Cr in Q2FY25. However, growth in MTU is expected to resume once the company receives regulatory approval to onboard new UPI customers.
Paytm has been a leader in merchant payments and merchant subscriptions for Paytm's payment devices continued to grow, with 1.12 Cr merchants now using the devices, a QoQ increase of 3 Lakh. The company's strategy of redeploying inactive devices to new merchants has reduced capital expenditure and helped expand the base of active merchants, further boosting subscription revenue.
The company has also announced that it will start with DLGs (Default Loss Guarantees) on distribution of merchant loans.
“There is increased interest and comfort from existing as well as new lenders to expand the partnership due to better asset quality trends and higher demand from our merchants. Following the regulatory framework, and the emerging market practice, we see increased willingness from lenders to partner and allocate more capital in the Default Loss Guarantee (DLG) model. DLG model will help to increase disbursements with the existing partners and expand partnership with new lenders for the loan distribution,” said the company in its earnings release.
Paytm’s cash balance also saw significant growth, rising to Rs 9,999 Cr as of quarter ending September 2024, compared to Rs 8,108 Cr as of June quarter 2024, further strengthening its financial position.