Paytm Q4 Results Highlights: Fintech posts net loss of ₹550.5 crore, shares rise

• Share price: ₹360 (+2.3%)
• Open: ₹356
• High: ₹361.5
• Low: ₹344.5
• Previous close: ₹351.7
• Total m-cap: ₹22,888.5 crore
• Free float m-cap: ₹10,528.7 crore

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Paytm said that its fourth quarter results for FY24 were impacted by temporary disruption on account of UPI transition and permanent disruption because of Paytm Payments Bank Ltd (PPBL) embargo.

The Reserve Bank of India (RBI) has barred PPBL from accepting fresh deposits or top-ups in any customer account, wallets, prepaid instruments, FASTags etc after February 29, 2024, due to non-compliance and material supervisory concerns.

Paytm will hold its earnings conference call for shareholders, investors and analysts on Wednesday, May 22, 2024 from 4 pm to 5 pm to discuss financial results of the company for the quarter ended March 31, 2023.

Paytm's Cash balance is ₹8,650 crore as of quarter ending March 2024, as compared to ₹8,901 crore as of quarter ending December 2023. The above includes Paytm Money Ltd (PML) customer funds of ₹462 crore for December 2023 and ₹339 crore for March 2024. Cash balance (excluding change in Paytm Money Ltd (PML) customer funds) has come down in line with EBITDA before ESOP (excluding UPI incentive).

In Q4 FY 2024, Paytm's EBITDA before ESOP was ₹103 crore as compared to ₹234 crore in Q4 FY 2023.

Excluding the UPI incentives, the fintech company's EBITDA before ESOP was (₹185 Cr) as compared to ₹52 crore in Q4 FY 2023. Excluding UPI incentives, EBITDA before ESOP margin, stands at (9%) for Q4 FY 2024, versus 2% in Q4 FY 2023.

• Enhancing governance structure across Paytm and its group entities by appointing subject matter experts as advisors or Independent directors, have greater regulatory engagement and higher focus on compliance, both in letter and spirit
• Reaffirm commitment to payments as the company's core business by focusing on recovering the consumer and merchant base, making targeted investments to bring them back to the Paytm platform
• Focus on monetisation by cross-selling financial services, in line with regulatory guidelines. Expand offerings through Insurance and Equity broking & distribution
• Achieve significant cost efficiencies through AI led capabilities, a leaner organization structure and the pruning of non-core businesses

"FY 2024 has been a landmark year for the company as we achieved our first full year of EBITDA before ESOP profitability (since IPO) of ₹559 Cr. We demonstrated strong revenue momentum (up 25%) and continued our disciplined focus on profitability (EBITDA before ESOP margin up by 8%), in spite of regulatory action on our associate entity, Paytm Payment Bank Ltd. (PPBL).

I am happy to share that we have successfully transitioned our core payment business from PPBL to other partner banks. This move de-risks our business model and also opens up new opportunities for long-term monetization, given our platform’s strength around customer and merchant engagement. It has been possible in such a short period of time with extensive support from the Regulator, NPCI, Bank partners and our committed team mates. The unwavering commitment of our government and regulator to support innovation and financial inclusion, keeps us true to our mission and committed to our long-term sustainable growth opportunity.

We expect near-term financial impact to our revenue and profitability, due to disruptions faced in our business in Q4. This includes steady state impact due to pausing of PPBL wallet. We had also paused a few other payments and loan products to our customers during the last quarter, and I am happy to share that many such products have been restarted or in the process of starting soon.

Led by capabilities of AI and focussing on core business, we are also working on significant cost efficiencies including leaner organization structure. Our ongoing experiments and learnings in AI promise to revolutionize customer and merchant care for the financial industry, while also unlocking new avenues for revenue generation and cost savings. We anticipate tangible results from these initiatives in the coming quarters, further bolstering our competitive advantage in the market.

We are fully committed towards building our business according to regulatory compliances and prudent operations risk policies.

We are also taking various steps to strengthen the governance framework across our group entities (especially regulated entities) by appointing subject matter experts as advisors or independent directors, reviewing various processes etc. I am ensuring that we have greater regulatory engagement and have higher focus on compliance, in letter and in spirit.

I am proud of the talent we have in our company, the culture of resilience and entrepreneurship. We remain more committed than ever towards growth, profitability, and maintaining robust governance and compliance".

• Share price: ₹346.1 (-1.5%)
• Open: ₹356
• High: ₹356
• Low: ₹344.5
• Previous close: ₹351.7
• Total m-cap: ₹22,007.9 crore
• Free float m-cap: ₹10,113.4 crore

• For FY24, Paytm’s revenue from operations grew by 24.8% YoY to ₹9,978 crore
• Growth in revenue was mainly due to rise in gross merchandise value (GMV), device additions, and growth in the financial services distribution business.
• Meanwhile its net loss for FY24 narrowed to ₹1,422 crore from ₹1776 crore.
• On the back of growth and improvement in contribution margin, FY24 EBITDA before ESOP increased to ₹559 crore. EBITDA margin at 6% (up 8 percentage point)

Paytm is a financial technology company that offers digital payments and financial services. It was founded in 2010 by Vijay Shekhar Sharma.