One 97 communications ltd run fintech firm Paytm operating released its Quarterly 4 results, that ended in March 2024, on Wednesday.
Paytm Quarterly Performance
For the year and quarter ending March 2024, the company recorded a revenue growth of 7% Year-on-Year (YoY) growth to Rs.1586 crore but its Quarter-on-Quarter (QoQ) was down by 9% because of discontinuation of PPBL (Paytm Payment Banks Limited) wallet.
Their EBITDA before ESOP plummeted to Rs.103 crore in March quarter compared to Rs.234 crore in previous year’s March quarter. Excluding UPI incentives, the EBITDA before ESOP was recorded at Rs.185 crore.
Expectations for the next quarter
Disruptions from the previous quarter in March 2024 will result in a “full financial impact” in Q1 FY25. For the next quarter, they expect a revenue of Rs 1500-1600 crore and EBITDA before ESOP of Rs 500-600 crore. A meaningful recovery resulting from resuming certain products and achieving steady growth in operating metrics is the goal for the subsequent quarter.
Additionally, subscription merchant is expected to fully recover by Q3 FY25. Merchant subscription in Q4 was Rs.90 per device per month which will likely bottom out at Rs.80 in Q1 FY25, and later on jump to Rs.100 by Q4 FY25.
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Transition from PPBL
Complying to RBI’s directions to PPBL, the fintech company has adopted the following measures and formulate partnerships with:
- Operating UPI services as TPAP to existing UPI customers and merchants, and onboarding of new merchants.
- Card acquiring and BIN sponsorship for card acceptance offering to merchants.
- Nodal/escrow accounts for settlement of funds to merchants
- FASTag distributions of other banks
- Bharat Bill Payments Services
Analysts recommend
Given that the fintech giant is in its transition phase and might take some time before getting stabilized, it is suggested that shareholders hold their stocks.
Market analyst Gaurang Shah believes, “we don’t see much clarity in where the company is going,” suggesting unpredictability in the performance of the company in near future or the next quarterly performance.
However, Paytm MD Vijay Shekhar Sharma exhibited his commitment towards building a business according to regulatory compliances and prudent operation risk policies. Furthermore, it will appoint various subject matter experts as advisors or independent directors to strengthen the governance framework across group entities.
Impact on Shares
Following the result declaration, the Paytm share price has dropped by 0.81% and is currently trading at Rs.348.90. Over the past year, Paytm shares have seen a significant decrease of 50.23% to Rs.348.90.
