Paytm’s parent company, One97 Communications, revealed a consolidated net loss of ₹222 crore for the third quarter ending December 31, 2023. This marked a 43% decrease compared to the net loss of ₹392 crore in the same quarter of the previous fiscal year.
Improvement in Nine-Month Performance
For the nine months ending December 31, 2023, the consolidated net loss amounted to ₹872 crore, nearly half of the ₹1,609 crore net loss reported previously. Consolidated revenues increased by 36% to ₹7,711 crore from ₹5,658 crore.
Quarterly Revenues and Profits
In the third quarter, consolidated revenues rose by 38% to ₹2,850 crore, showcasing significant growth. The contribution profit for this period was ₹1,520 crore, a 45% increase from the same quarter in the previous fiscal year.
Contribution Margin and Factors Impacting It
The contribution margin for the quarter improved to 53%, compared to 51% a year ago. However, it declined by 3 percentage points due to seasonal factors like higher promotions during festivals, a greater mix of events business, and slightly lower payment processing margins typical of the festival season.
Understanding Contribution Margin
Simply put, contribution margin is the money left over from sales after deducting all variable expenses related to producing a product.
Positive Outlook and Consistent Improvement
Paytm highlighted a consistent improvement in profitability due to strong revenue growth and operating leverage. Earnings before interest, taxes, depreciation, and amortization (EBITDA) before ESOP for the quarter were ₹219 crore, compared to ₹31 crore in the same quarter last year.
Paytm’s Lending and User Growth
Paytm distributed loans worth ₹15,535 crore in Q3, a 56% increase year-on-year. As of December 2023, the platform’s lending partners distributed loans to 1.25 crore unique Paytm consumers and merchants. The number of Paytm merchants paying a subscription for payment devices increased to 1.06 crore, a 49 lakh year-on-year growth.
Expansion Plans in GIFT City, Gujarat
The Board of Directors approved the establishment of one or more subsidiaries in GIFT City, Gujarat, with a planned investment of ₹100 crore. This investment aims to facilitate AI-driven cross-border remittances and establish a development center for innovation. Paytm sees GIFT City as an ideal hub for cross-border innovation and aims to reduce friction in global remittances with faster and cost-effective solutions driven by artificial intelligence.
