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One97 Communications, the parent company of Paytm has published its Q2FY23 results wherein the company reported a net loss of Rs 571 crores.
The revenues of the online wallet operator surged to Rs 1,914 crores, up 76.2% when compared to Rs 1,086 crores reported in the corresponding quarter last year. The revenues from its core business i.e. payments services rose 55.6% to Rs 1,173 crores as its net payments margin rose 15% YoY.
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The number of average monthly transacting users surged 39% YoY during the quarter. Revenues from its financial services segment (BNPL, personal and merchant loans) reported 4-fold growth to Rs 349 crores while the number of loans disbursed grew to Rs 7,313 crores, up almost 224%.
On the other hand, consolidated net losses widened to Rs 571 crores, marking a 20.7% spike in net losses. Indirect costs stood flat as the company made 'disciplined investments in areas where we see attractive monetization opportunities’.
The main fields of investment during the quarter were its sales team (to increase its merchant base and subscription), technology teams, and targeted marketing.
Recently, the company's banking arm, Paytm Payments Bank, which was barred from onboarding new customers due to IT issues, received the central bank's observation which mainly spoke of the company's IT outsourcing processes and operational risk management. Currently, it is uncertain as to when the company might be allowed to bring in new customers, but the company has assured that the measures imposed would not materially impact its overall business.
The stock of Paytm could see some pain in the coming weeks as its lock-in period is set to end. This would allow early investors like Softbank to offload their holdings resulting in selling pressure. The stock currently trades at around Rs 641.80 per share.
Article by Aman Agarwal.
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