Indian digital payments firm Paytm reported a 51.5 percent rise in fourth-quarter revenue on Friday, aided by a surge in loan growth, and posted an operating profit for a second consecutive quarter. Also Read - UPI transactions over Rs 2,000 will be charged at 1.1 percent starting April 1
Paytm’s parent, One 97 Communications Ltd, said revenue rose to Rs 2,334 crore ($285.80 million) in the January-March quarter, from Rs 15.41 billion a year earlier. For the fiscal year, the revenue of one of India’s leading digital payments platforms swelled to Rs 7,991 crore. Also Read - Paytm Wallet is now acceptable on all UPI QRs
Operating profit, which the company defines as core profit before the cost of employee stock-owning plans, was Rs 2.34 billion. This included Rs 182 crore paid for the full year from a government scheme to incentivise UPI payments, compared with a loss of Rs 3.68 billion a year earlier. The latest incentives represent an uptick of 101 percent on a yearly basis. Also Read - Paytm wins regulator extension for payment aggregator licence application
That was still higher than the 310 million rupees in the previous quarter, which was the SoftBank-backed firm’s first-ever operating profit since it went public in November 2021.
Paytm claims its lending business saw an uptick of 364 percent in the value of loans. In Q4 FY23, the company’s revenue for financial services, such as loan disbursement, grew by 183 percent year-over-year to Rs 475 crore. For the entire FY 2023, Paytm’s revenue from the “Financial Services and Others” category rose to Rs 1,540 crore, representing a jump of 252 percent.
Paytm’s consolidated net loss narrowed to Rs 1.68 billion, from Rs 7.61 billion a year earlier. Loans distributed through Paytm more than tripled to Rs 125.54 billion, powering a 183 percent surge in revenue in its fast-growing financial services business.
Revenue at Paytm’s two biggest divisions, from payments services to consumers and to merchants, rose 12 percent and 61 percent, respectively. Its contribution margin — a measure of revenue fewer cashbacks and charges such as payment processing — rose to 55 percent, from 35 percent a year earlier.
“Paytm has built a key differentiation in the market for itself with the widest array of payment instruments like Wallet, UPI, Postpaid, Food Wallet, Fastag and a variety of banking products available through Paytm Payments Bank. For offline transactions, the company has devices like Paytm QR code, Android Smart POS, EDC (Electronic Data Capture) device, IoT devices and the soundbox,” said Paytm in a statement.
— Written with inputs from Reuters