Key Highlights Of Paytm’s Q3 FY23 Financial Results

One97 Communications, the parent company of fintech major Paytm, published its financial results for the third quarter (Q3) of the financial year 2022-23 (FY23) on Friday (February 3). 

Here are the key takeaways from the results:

Headline Numbers: Paytm’s net loss halved year-on-year (YoY) to INR 392 Cr in Q3 FY23 and revenue from operations surged 41% on a yearly basis to INR 2,062 Cr. Meanwhile, Paytm’s total expenses in the quarter ended December 2022 rose marginally by 8% to INR 2,522.3 Cr, largely on back of employee expenses, which accounted for a big chunk of expenditure at INR 945.6 Cr. 

Paytm Turns ‘EBITDA Positive’: In its statement, the startup claims to have achieved its target of EBITDA profitability, without ESOP cost, in Q3 FY23. The fintech major reported an EBITDA, without ESOP cost, of INR 31 Cr in the quarter. 

Under RBI Lens: Paytm confirmed that it was working to resolve issues flagged by the Reserve Bank of India (RBI) with regards to its payments bank licence. The company has submitted a response on issues raised by the central bank and, subsequently, RBI has suggested remedial steps.

Paytm claims to be in the process of complying with these steps and will submit a report in this regard to RBI. In 2022, RBI barred Paytm from onboarding new customers over concerns around gaps in its technology systems.

On the separate issue of non-issuance of payments aggregator licence by RBI for the listed unicorn, the Noida-based startup is said to have been directed to re-submit its application. 

The fintech startup has said that RBI’s measures in both the cases have not ‘materially impacted’ Paytm’s overall business. 

Operational Metrics: Paytm’s gross merchandise volume (GMV) in the quarter ended December 2022 grew to INR 3.5 Lakh Cr, while average monthly transacting users during the quarter rose 32% on a yearly basis to 8.49 Cr.

Focus On Merchants: The number of registered merchants at the end of December 2022 stood at 3.14 Cr, while the platform processed 628 Cr merchant transactions in Q3 FY23. The number of Paytm payments devices deployed across the country hovered around the 58 Lakh mark. 

It’s Raining Loans: Paytm disbursed 1.04 Cr loans in Q3 FY23, up 137% YoY. It also processed loans worth INR 9,958 Cr during the period, up 357% over the same period last fiscal. The company added 14 Lakh new borrowers in the quarter under review.

Paytm activated around 1.5 Lakh co-branded credit cards during the quarter, bringing the total to 4.5 Lakh activated cards at the end of December, 2022. 

Average ticket size of personal loans stood at INR 1.2 Lakh, with an average tenure of 15 months, while the average ticket size of merchant loans hovered around the INR 1.5 Lakh mark with an average tenure size of 12 months.

Govt Incentives: The recent INR 2,600 Cr scheme announced by the government for incentivising digital payments is expected to create additional INR 130 Cr revenues for the fintech player in Q4 FY23. However, no UPI incentive was recorded by Paytm in Q3 FY23. 

Share Buyback Continues: At the end of the quarter ended December 2022, Paytm spent INR 68 Cr cash to purchase 15 Lakhs shares as part of a buyback plan. At the end of Q3 FY23, the startup had INR 8,957 Cr outstanding as cash balances. 

Until February 3, Paytm purchased 1.46 Cr shares in total for INR 796 Cr at an average price of INR 543 per share.

“With our focus on growth and keeping a tight vigil on operational risk and compliances, I am very confident that we will soon achieve our next milestone of becoming a free cash flow generating company,” said CEO and founder Vijay Shekhar Sharma.