Paytm To Shift Focus From EBITDA Before ESOP To PAT For Better Clarity On Its Financials: Vijay Shekhar Sharma

Paytm will now shift its focus from EBITDA before ESOP to profit after tax (PAT), a move aimed at offering a clearer view of the company’s overall financial health.

While intimating about Paytm’s strategic pivot during the annual general meeting today (September 12), founder and managing director Vijay Shekhar Sharma underscored the company’s commitment to demonstrating genuine financial performance and operational maturity.

“My board members advised me to shift the focus from EBITDA before ESOP as a benchmark to PAT. We recognise that EBITDA before ESOP, due to its large ESOP charge, provides only a partial picture of our financial health. Our commitment is now to focus on PAT, reflecting our drive towards true profitability,” Sharma said.

EBITDA, short for earnings before interest, taxes, depreciation, and amortization, is an alternate measure of profitability to net income. It’s used to assess a company’s profitability and financial performance.

Sharma also said that the company would apply for a payment aggregator licence with RBI in due course.

Paytm’s CEO reaffirmed the company’s focus on its core payments business while expanding into financial services like loans, mutual funds, and insurance to drive profitability. He emphasised that Paytm is harnessing AI to develop innovative technologies, which have already been integrated across all business segments.

He said that AI will revolutionise industries, with early adopters gaining a significant competitive edge.

Sharma also forecasted that India will emerge as a global leader in financial technology within the next five years, with a responsibility to lead advancements in AI.

He further acknowledged the growing demand for Paytm to establish an AI-powered risk management committee, reflecting forward-looking expectations.

Paytm saw its consolidated net loss widen 134% year-on-year to INR 840.1 C in the June quarter (Q1) of the financial year 2024-25 (FY25) as compared to INR 358.4 Cr in the year ago-period.

Revenue from operations also declined 36% in Q1 FY25 to INR 1,502 Cr from INR 2,342 Cr in the corresponding quarter last year.

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