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Paytm Q3 Results 2022

05 February 2022
4 minutes

Payments platform and finance technology company PayTM posted its quarterly results for Q3 FY22 on February 4, 2022. This was the company’s first quarterly earnings report after going public with its IPO in November 2021. In the quarter that ended on December 31, 2021, PayTM’s net losses widened to Rs 778 crore from a net loss of Rs 482 crore in the previous quarter, making it a 61.4% QoQ increase in the losses. On a YoY basis, the net loss widened by 45% from a net loss of Rs 535 crore in the year ago period.

The revenue from operations in the quarter under review was up 89% YoY to Rs 1,456 crore from Rs 772 crore in the year ago period. On a sequential basis, the revenue from operations was up 34% from Rs 1,086 crore in Q2 FY22. The jump in the revenue from operations was attributed to loan disbursements on PayTM and recovery of the business from the impact of COVID amid the festive season.

The company’s total income increased by 35% QoQ to Rs 1,533 crore from Rs 1,134 crore in the previous quarter. On a YoY basis, the total income was up 76% from Rs 867 crore in the year ago period. The company reported its contribution profit (defined as Revenue from operations less payment processing charges, promotional cashback and incentives, and other direct costs) improved to 31.2% of revenue in the quarter under review from 8.9% in Q3 FY21

It is important to note that PayTM’s expenses in the quarter under review jumped significantly- 45% QoQ and 72% YoY to Rs 2,317 crore primarily led by payments processing charges and employee benefits expense. PayTM’s monthly transacting users grew by 37% YoY to 64.4 million users in Q3 FY22.

The stock of PayTM closed in the green at Rs 953.30 per share after rising by 0.93% ahead of its regulatory filing at the end of the intraday trading session on February 4, 2022.

Hits of Paytm Q3 Results 2022

  • Revenue from operations up 89% YoY, 34% QoQ to Rs 1,456 crore in the quarter under review
  • Total income up 35% QoQ, 76% YoY to Rs 1,533 crore in Q3 FY22
  • Payment processing charges down to 0.31% from 0.46% in the year ago period

Misses

  • Net loss widens to Rs 778 crore from net loss of Rs 482 crore in the previous quarter and a net loss of Rs 535 crore in the year ago period
  • Total expenses jump 45% QoQ and 72% YoY to Rs 2,317 crore in the quarter under review

Segment-wise results

  • Payment Services to consumers: Revenue up 60% YoY to Rs 406 crore from Rs 254 crore in Q3 FY21
  • Payment Services to merchants: Revenue up 117% YoY to Rs 586 crore from Rs 269 crore in Q3 FY21
  • Financial services & others: Revenue up 201% YoY to Rs 125 crore from Rs 42 crore in Q3 FY21
  • Commerce & Cloud services: Revenue up 64% YoY to Rs 339 crore from Rs 207 crore in Q3 FY21

What the management says

The company said, “The strong growth was driven by increase in merchant payments processed through MDR bearing instruments (Paytm Wallet, Paytm bank account, other banks netbanking, debit and credit cards), disbursements of loans on platform and recovery of commerce business from covid impact. Our customers are showing greater retention and higher engagement. We continue to rapidly expand our customer and merchant base. Number of consumers on our platform is now over 350 million and our merchant base has expanded to 24.9 million from 20 million a year ago. “We have seen strong growth across all our products: Paytm Postpaid (BNPL), personal loans and merchant loans. We have expanded partnerships to 8 banks and NBFCs.”

Other things to know about PayTM  

  • PayTM was the largest IPO in India’s history and was listed on the stock exchange on November 18, 2021. The stock was listed at Rs 1,950 per share, 10% below its issue price of Rs 2,150 per share. Ever since its IPO, PayTM’s stock is trading 104% below its listing price at Rs 953 per share (as of February 4, 2022).
  • PayTM has the second largest market capitalization in the business support services sector at Rs 61,000 crore after Nykaa (as of February 5, 2022).
  • PayTM’s P/E ratio is at -36.44 against the industry average of 70.21 while its P/B ratio is at 9.48 against the industry average of 5.15. (as of February 5, 2022)

To read the RA disclaimer, please click here.
Research Analyst: Bavadharini KS

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