Vijay Shekhar Sharma-led fintech major One 97 Communications, operator of Paytm, swung to black with a profit after tax of ₹928.3 crore for the July-September quarter of FY25 against a loss of ₹290.5 crore in the corresponding quarter of the previous fiscal year, thanks to a one-time gain.
Paytm's operating revenue of ₹1,660 crore fell 34% from ₹2,519 crore in the year-ago period. Paytm says EBITDA before ESOP improved by ₹359 crore QoQ to ₹(186) crore. "We remain committed to reaching EBITDA before ESOP profitability by Q4 FY 2025. With a one-time exceptional gain of ₹1,345 crore, on account of sale of entertainment ticketing business, we achieved PAT of ₹930 Cr in Q2 FY 2025," Paytm says in an exchange filing.
Without the exception gains, Paytm's loss for the said quarter stood at ₹495 crore, up 70% compared to the same quarter last year.
During the said quarter, Paytm completed the transaction to sell its entertainment ticketing business to food-tech platform Zomato. The final price, after working capital adjustments, was ₹2,014 crore, leading to gains of ₹1,345 crore.
Including the gains, Paytm's profit surged 11% on QoQ, due to a 5% QoQ increase in GMV (gross merchandise volume), better realisation from devices and a 34% QoQ increase in revenues from financial services. "Our net payment margin increased 21% QoQ to ₹465 crore, largely on account of improvement in payment processing margin, better device realisation and growth in GMV. Financial Services revenue was ₹376 Cr, up 34% QoQ, on account of increase in collection bonus in merchant loans due to better asset quality trends, and higher share of merchant loans," Paytm says.
The company says it has started working with select lenders by giving the default loss guarantee (DLG), which in the long term will serve a wider merchant base and could increase its financial services distribution revenue.
Paytm says its contribution margin without UPI incentives expanded to 54% in Q2FY25, despite including DLG cost in this quarter. "It has improved due to higher payment processing margin and growth in high margin financial services revenue."
Paytm says its cash balance stood at ₹9,999 crore as of the quarter ending September 2024, as compared to ₹8,108 crore as of the quarter ending June 2024. This excludes Paytm Money Ltd (PML) customer funds of ₹449 crore for June 2024 and ₹412 crore for September 2024. The increase in cash balance on QoQ was primarily on account of ₹2,014 crore cash received during the quarter towards the sale of the ticketing business.
The company's indirect cost came down by 17% QoQ to ₹1,080 crore in Q2 FY25 due to a reduction in employee costs (down 13% QoQ), marketing expenses and the absence of certain one-time expenses incurred in Q1FY25.
Paytm shares, meanwhile, dipped 4.08% to ₹696.25 on the BSE after a gap-up opening in the morning trade. The shares are currently trading 29.8% down as compared to the 52-week high of ₹992.05 touched on October 23, 2024.
