“Scaling Lending Distribution, On Path To Profitability,” Paytm CEO Tells Shareholders

Paytm founder and CEO Vijay Shekhar Sharma, in a letter, told shareholders that the fintech company is “on the right path to profitability and free cash flows” and is optimistic about its lending business.

“We are now scaling up lending distribution which can bring financial inclusion to hundreds of millions of people in our country. Due to the huge demand for lending in our country, our low penetration and the compounding nature of our lending journey, we are extremely optimistic about the prospects of our lending business,” Sharma stated in the letter.

The comment comes shortly after Paytm announced its operating numbers for October 2022.

Paytm has stated that its loan distribution business continues to witness accelerated growth with disbursements at an annualised run rate (ARR) of INR 37,000 Cr.

In October 2022, the fintech giant disbursed 3.4 Mn loans worth INR 3,056 Cr. The value of loans disbursed grew 387% year-on-year (YoY) (from INR 627 Cr in October 2021) while the number of loans disbursed grew 161% YoY (from 1.3 Mn in October 2021).

In what was good news for stakeholders, Paytm’s EBITDA loss reduced by 99.75% from INR 8.85 Cr to INR 1.99 Lakhs. 

“After our recent quarterly reports which showed strong operating leverage and reduction in EBITDA losses, we are now excited about the next year of our journey, as we get close to EBITDA profitability and free cash flow generation,” the Paytm founder said.

According to the company’s financial results, its net loss widened by 21% YoY to INR 571 Cr in the quarter ending September 2022 but fell by 12% from the preceding quarter (Q1 FY23)

Its revenue from operations surged 76% YoY to INR 1,914 Cr in Q2 FY23 and expenses surged 60.4% YoY to INR 2,561.4 Cr. 

Shares of Paytm parent One97 Communications Ltd opened at INR 645 – a 13% rise from the previous close.

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