Paytm On Track: Getting Close To Become Operationally Profitable

Paytm on Track : Paytm, a significant player in the fintech industry, will attain operational profitability by the end of 2023, as per CEO and MD Vijay Shekhar Sharma.

In the company’s annual report, Sharma wrote a letter to the shareholders in which he stated, “I believe that over the past year, our team has done a great job in massively improving our revenues and contribution profits, which allow for investments in our payments and credit businesses while at the same time reducing our EBITDA losses.”

We are on schedule to achieve operating profitability (EBITDA before ESOP cost) by the quarter ending September 2023 and we are witnessing tremendous momentum in our businesses, he continued.

The results of Paytm throughout the previous fiscal year support this. From -59 percent in FY21 to -30.5 percent in FY22, Paytm’s EBITDA margin increased. The large fintech company’s net profit margin also increased, going from -60.7 percent in FY21 to -48.2 percent in FY22.

But in FY22, Paytm’s losses increased to INR 2,396.4 Cr. While the year-over-year (YoY) rise in operating revenue in the most recent fiscal was 77 percent, totaling INR 4,974 Cr. Over the same period, its expenses increased to INR 7,601.1 Cr.

Paytm is therefore approaching profitability as its revenue is increasing more quickly than its costs.

Additionally, Paytm and Paytm Mall joined the government’s Open Network for Digital Commerce (ONDC), which has the potential to generate substantial sums of money in the future.

Paytm reported solid growth in its loan division in a recent performance update. 8.5 Mn loans were disbursed in the quarter that ended June 30, 2022, which is a 30 percent increase over the quarter before, according to a filing with the Bombay Stock Exchange (BSE).

Similarly, the total amount of loans disbursed increased by 56 percent quarter over quarter (QoQ), totaling INR 5,554 Cr.

The listed fintech company’s shares began trading on Friday at INR 720 per share (July 29). Paytm’s shares had a difficult start following a lackluster launch on the stock exchanges and are currently down 53% since the shares were listed. But recently, the share price of the massive fintech company has increased.