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Paytm Logs 63.6% Rise in Revenues Backed By Growth in Non-UPI GMV

Revenue from payments and financial services rose by 69% on a year-on-year basis

Its net losses widened by 8.42% to INR 473.5 Cr during July-September quarter

The financial results come just over a week after the company debuted on the stock market

Recently listed fintech giant, One97 Communications, which owns Paytm has recorded a 63.6% increase in its revenue from operations during the July-September quarter at INR 1,086.4 Cr.

During the same period of last fiscal (FY21), the fintech giant had registered an operational revenue of INR 663.9 Cr.

In a regulatory filing, the digital payments major attributed the jump in revenue to a 52% growth in non UPI payment volumes (GMV) and more than three-times growth in financial services and other revenue.

The total income of the fintech unicorn witnessed a nearly 50% growth at INR 1,134.5 Cr during the period under review, compared to INR 758.1 Cr earned in Q2FY21.

Revenue from payments and financial services continued to play a major role in the overall revenue, as it grew 69% on a year-on-year basis to INR INR 842.6 Cr while, the revenue from commerce and cloud services revenue grew by 47% to INR 2,438 Cr.

The filing noted that revenue from commerce rose on the back of continued post-covid recovery in travel and entertainment ticketing businesses and the revenue from the cloud services increased primarily due to a strong growth in the advertisement revenue. 

“Our contribution profit increased to INR 2.6 billion (260 Cr), up 592% year-on-year. Contribution profit for H1 FY 2022 at INR 5.0 billion (500 Cr) has exceeded the contribution profit of INR 3.6 billion (360 Cr) for the full previous financial year,” a Paytm statement said.

Further, its payment processing charges continue to decline as a percent of GMV from 0.52% in Q2 FY 2021 to 0.34% in Q2 FY 2022.

Vijay Shekhar Sharma-led Paytm also has reduced its indirect expenses from 70% of revenues in Q2 FY 2021 to 63% in Q2 FY 2022. Marketing and promotional expenses (excluding cashback and incentives) stood at INR 102.3 Cr, unchanged at 9% of revenues year-on-year, even as the company has increased Average MTUs by 14.4 million from Q2 FY 2021 to Q2 FY 2022. 

“With continued investments in technology and merchant base expansion, our employee cost (excluding ESOP) at INR 3,672 million (367.2 Cr) reduced from 40% of revenues in Q2 FY 2021 to 34% in Q2 FY 2022,” Paytm said in its filing.

Some of the key growth trends of the NCR-based fintech giant’s business, as per the the filing include — increase in payments revenues and profitability due to growth of payment volumes from non-UPI instruments (including Paytm Payment Instruments). Besides, payment services to merchants, recovery of high-margin commerce business, and growth of cloud- owing to ramping up of advertising and increase of financial services revenues driven by huge lending growth are also there.

The company’s gross merchandise value (GMV) for Q2 FY 2022 was INR 1,95,600 Cr, up by 107% year-on-year and the growth momentum continued in October 2021, where the GMV was at INR 83,200 Cr, up 131% year-on-year.

The GMV growth was led by active user engagement and adoption across businesses.  

The financial results come just over a week after the company debuted on the stock market with a discount amid valuation and profitability concerns.

Shares of the digital payments giant listed at a discount of 9.06% on the BSE at INR 1,955 per share on November 18, compared to the issue price of INR 2,150.

Though its share prices declined around 37% in its first two trading days, they have recovered since then and its market cap currently is at INR 1.15 Lakh Cr.

On Friday, its shares on the BSE closed at INR 1,781.15, lower by INR 15.40 or 0.86% from its previous close.

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