Paytm, a giant in the fintech industry will attain operational profitability by the end of 2023, according to Vijay Shekhar Sharma, chief executive and MD of the listed startup.
Penning a letter to the shareholders in the company’s annual report, Sharma said, “I believe that over the past year, our team has done a great job in massively improving our revenues and contribution profits, which allows for investments in our payments and credit businesses while at the same time reducing our EBITDA losses.”
“We are seeing excellent momentum in our businesses and are on track to achieve operating profitability (EBITDA before ESOP cost) by the quarter ending September 2023,” he added.
It is wise to note that Sharma has stated this objective several times. He wrote a letter to the shareholders in a similar format at the end of the previous quarter, mentioning the September 2023 deadline, as well as during an earnings call in May.
The results of Paytm throughout the previous fiscal year reflect this. From -59 % in FY21 to -30.5 % in FY22, Paytm’s EBITDA margin increased. The major fintech company’s net profit margin also increased, going from -60.7 % in FY21 to -48.2 % in FY22.
But in FY22, Paytm’s losses increased to INR 2,396.4 Cr. While the latest fiscal’s revenue from operations increased by 77 % year over year (YoY), to INR 4,974 Cr. During the same period, its expenses also increased to INR 7,601.1 Cr.
As a result, Paytm’s revenue is increasing faster than its expenses, indicating that future profitability is approaching.
The government’s Open Network for Digital Commerce (ONDC), which also has the potential to be a significant revenue stream in the future, has welcomed Paytm and Paytm Mall to its membership.
A recent performance update from Paytm showed that its loan division has experienced solid growth. The fintech giant disbursed 8.5 Mn loans in the quarter that ended June 30, 2022, which is 30% more than the previous quarter, according to a filing with the Bombay Stock Exchange (BSE).
Similarly, the number of loans disbursed expanded by INR 5,554 Cr, or 56 %, quarter over quarter.
Additionally, Paytm reported a little increase in its monthly active users and a double-digit percentage increase in the gross merchandise value (GMV) of transactions taking place on its platform.
On Friday, shares of the prominent listed fintech company opened at INR 720 a piece (July 29). After a lukewarm listing on the bourses, Paytm’s shares suffered a rocky start and are still down 53% from the time the shares were listed. But recently, the share price of the massive fintech company has increased.