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Paytm Q4 Results FY-2022

21 May 2022

One 97 Communications, the parent company of fintech firm Paytm, declared its Q4 FY22 results late on 20 May 2022. 

Paytm’s net losses widened to Rs. 761.4 crores in Q4FY22, from Rs. 441.8 crores last year as expenses ate into the company’s topline growth. As per company statements, a rise in payment processing charges, marketing costs and employee benefit expenses were a drag on profits in the full-year numbers.

During the March quarter FY22, revenue from operations, jumped 89% yearly to Rs. 1540.9 crores, up 88% from Rs. 815.3 crores. This was driven by healthy growth in merchant payments through MDR instruments – Paytm Wallet, Paytm bank account, cards, etc. – and disbursements of loans through partners on the Paytm platform. 

More on Q4

The Gross Merchandise Value (GMV) for the fourth quarter of the financial year was recorded at Rs 2.6 lakh crores, up 104% on a yearly basis. Loans distributed through the online payments giant stood at Rs. 3,553 crores, growing 417% y-o-y and 63% q-o-q, beating all market estimates. The number of loans stood at 6.5 million, rising 374% over last year.

EBITDA (before ESOP costs) during the March quarter stood at Rs. 368 crores, up 12% on a yearly basis. Average MTU (number of unique users with at least one successful payment transaction in a month) grew an impressive 41% y-o-y to 70.9 million (7.09 crores). This was led by their reach to rural hinterlands. 

Also Read: What is Esop?

Paytm stated that it was on track to achieving its break-even target in the quarter ending September 2023. This in hopes of revenue growth and moderation in costs. 

While the scrip has been among the worst performers on the S&P BSE IPO index since its listing in November 2021. The Paytm scrip on Friday rose 3.30%, closing at Rs. 572 for the day. 

Segment-wise revenue

  • Revenue from Payments Services to Consumers was recorded at Rs. 469 crores, up 69% during Q4FY22
  • Payments Services to Merchants revenue increased 90% y-o-y to Rs. 572 crores 
  • Commerce and Cloud Services to Merchants rose 61% y-o-y to Rs. 320 crores
  • Revenue from Financial Services & Others stood at Rs. 168 crores, up 342% y-o-y

Highlights

  • Revenue from operations stood at Rs. 1540.9 crores, up 89% y-o-y during the quarter
  • Average MTU stood at 70 million, up 41% y-o-y in the recent quarter
  • Loans disbursed made a record high, at Rs. 3553 crores, up 417% yearly in Q4FY22
  • Contribution profit (defined as revenue from operations less direct costs) improved to 35% of revenue in the quarter from 21.4% in Q4 FY2021.

Misses

  • Paytm stock has been a non-performer on major indices
  • The company’s losses widened to Rs. 761.4 crores in Q4 FY22 from 441.8 crores last year
  • Expenses on account of employee benefits more than doubled to Rs 863.4 crores from Rs 347.8 crores in the March 2021 quarter.
  • Payment processing charges increased by 52% to Rs 774.2 crores in Q4 FY22
  • Marketing expenses spiked to Rs 248.9 crores from Rs 100.1 crores

Check Paytm Stock Details and Fundamental here: Paytm Share Price

Management talks

“In the payments business, the company is focussing on driving innovation and financial inclusion while closely following the letter and spirit of all regulations. The company is conducting its lending business in strict compliance with the existing digital lending guidelines as prescribed by the regulator in June 2020. It is further strengthening its partnerships with blue-chip lending institutions. 

Company associate Paytm Payments Bank continues to engage with the Reserve Bank of India in addressing its concerns. Paytm Payments Bank is pursuing the initiation of an IT audit, as one of the key areas of observation, in a time-bound manner,” a statement from the company read. 

Other news

  • Reserve Bank of India banned Paytm Payments Bank from onboarding any new customers following allegations of data leaks to Chinese firms.
  • Jack Ma’s Ant Group pulls out of Paytm Mall, sells entire stake 
  • Paytm market capitalization stood at Rs.37,325 crores as of 20 May, 2022
  • ROCE and ROE were recorded at -17.8% and -19.4%, respectively.

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Research Analyst: Bavadharini KS

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