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Fintech giant Paytm's parent company One97 Communications reported sharp growth in losses for the quarter ended in March 2022, but it also reported robust growth in revenues as well.
Revenues for the quarter in question came in at Rs 1,541 crores, up 89% YoY from Rs 815.3 crores last year and up 5.82% QoQ. The main drivers of the revenues were higher merchant payments processed through MDR-bearing instruments like Paytm wallet, Paytm bank account, cards, etc. The company's Gross Merchandise Value doubled to Rs 2.6 lakh crores.
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However, the company's losses widened significantly, up 71.6% Yoy from Rs 444.4 crores last year to Rs 762.5 crores this year, but contracted sequentially. The company's marketing and promotional expenses doubled during the quarter while its employee benefits expenses almost tripled. Moreover, the company's EBITDA loss improved 12% YoY.
For the full year ended on 31st March 2022, the company's total income came in at Rs 5,264 crores, growing 65.2%, while its total expenses amounted to Rs 7,601.1 crores, surging 59%, resulting in an operating loss of Rs 2,337 crores and a net loss of Rs 2,396.4 crores, growing 41%.
“As announced in April 2022, we believe we will achieve operating breakeven (i.e. EBITDA before ESOP cost) by September 2023. This will be driven by continued revenue growth, along with moderation in costs as operating leverage kicks in. We expect to see continued improvements in contribution margin in Q1 FY 2023 and going forward. In FY 2022, we made significant investments in a) marketing expenses to grow average MTU at 40%+ year-on-year, and b) employee costs, primarily to scale up our devices deployments to 0.8 to 1.0 million per quarter. As we enter FY 2023, we expect to achieve significant operating leverage, and the trajectory of EBITDA improvement to steepen,” Paytm said in a press release.
Paytm's IPO was the largest in India before LIC. The company has consistently fallen ever since it was listed in November 2021. The share saw a brief upward movement last week as the share had surged 14.7% in two days when the company had announced that its loan disbursement had improved 449% YoY.
However, bears took over once again as the share declined once again. The share closed at Rs 575.50 per share on Friday. Allotment at Rs 2,150 each share, Friday's close denotes a 73.2% loss to early investors.
Article by Aman Agarwal.
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