Tag: one97 communications

Paytm Expects to Generate Free Cash Flow by Year-End: CEO Vijay Shekhar Sharma

Fintech firm One97 Communications, which operates under the Paytm brand, expects to generate free cash flow by the end of this year, a top company official said on Saturday. 

Paytm founder and CEO Vijay Shekhar Sharma, in an earnings call, said that growth for the company in the June 2023 quarter came on account of expansion in payments, financial services and commerce business.

“We are on our committed guidelines of becoming free cash flow positive by the year-end,” Sharma said.

Paytm has reported a narrowing of loss to Rs. 358.4 crore in the first quarter ended June 30, 2023.

The company had posted a loss of Rs. 645.4 crore in the same period a year ago.

Its revenue from operations increased by 39.4 percent to Rs. 2,341.6 crore during the reported quarter from Rs. 1,679.6 crore in the June 2022 quarter.

The company said its merchant payments volume (GMV) grew 37 percent year-on-year to Rs. 4.05 lakh crore in the April-June quarter of FY 2023-24.

Sharing an update on the RBI’s bar on the onboarding of new customers by Paytm Payments Bank, Sharma said it has submitted a compliance report to the banking regulator, and the same is under review.

He said that approval from the Reserve Bank of India has taken longer than it was anticipated but it is expected to come soon.

During the financial year (FY) 2022, the RBI directed the Paytm Payments Bank (PPBL) to stop the onboarding of new customers with effect from March 1, 2022.

In FY2023, the apex bank appointed an external auditor to conduct a comprehensive systems audit of the PPBL.

On October 21, 2022, PPBL received the final report thereof from the RBI, outlining the need for continued strengthening of IT outsourcing processes and operational risk management, including KYC etc at the Bank. 

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Paytm Registers Incentive Worth Rs. 130 Crore From UPI Transactions in 3 Quarters

Digital financial services firm One97 Communications, which operates under the Paytm brand, expects to sustain operational profit growth, company’s founder and CEO Vijay Shekhar Sharma said on Monday.

Paytm‘s EBITDA (earnings before interest, taxes, depreciation, and amortisation), an indicator of operational profit, before ESOP cost margin improved to Rs. 31 crore during the third quarter ended December 31, 2022.

The company has calculated an incentive of Rs. 130 crore from UPI transactions in three quarters but Sharma said that the incentive may technically make the fourth quarter a free cash flow positive quarter but Paytm will report as a one-time item.

“UPI incentive will be one-off and we will explicitly call out as one-off. Rs. 130 crore that we are quoting is for three quarters. The fourth quarter number will be topped on top of it. Because we are calling it one-time item, we are not calling it free cash flow generative. We would rather say free cash flow generative when we are consistently sure of it,” Sharma said during the earnings call.

He said that the company will focus on increasing EBITDA profitability.

“We will continue to increase the EBITDA profitability. Could it go to two digits? In what timeline? I don’t know. But it could go to two digits for sure. But like I said this is sustained EBITDA growth that we are seeking from here on,” Sharma said.

Paytm achieved the target for operational profit, excluding ESOP cost in the December 2022 quarter itself which is three quarters ahead of the company’s guidance.

Responding to a query on RBI’s clearance for Paytm Payments Bank to onboard new customers, Sharma said he expects the approval to come soon based on the discussion that is going on with the banking regulator.

The Reserve Bank of India (RBI) has barred Paytm Payments Bank from onboarding new customers, citing “material supervisory concerns” observed at the bank since March 2022.

Paytm President and group chief financial officer Madhur Deora said that as of Friday the company has completed a share buyback worth Rs. 796 crore. The company’s board has approved a share buyback worth Rs. 850 crore at Rs. 810 apiece.

Paytm narrowed its consolidated net loss to Rs. 392 crore in the third quarter that ended December 2022. The company had posted a net loss of Rs. 778.4 crore in the same period a year ago.

Its revenue from operations jumped about 42 percent to Rs. 2,062.2 crore during the quarter from Rs. 1,456.1 crore in the year-ago period. The contribution profit, which excludes taxes and marketing cost, more than doubled to Rs 1,048 crore during the reported quarter on YoY basis.

Paytm services revenue grew by 21 percent to Rs. 1,197 crore during the reported quarter from Rs. 992 crore in December 2021 quarter.

The value of loans facilitated through Paytm increased over four-fold to Rs. 9,958 crore in December 2022 quarter from Rs. 2,181 crore in the same period a year ago.

The average Monthly Transacting Users on Paytm grew to 8.5 crore in December 2022 from 6.4 crore in December 2021.

Shares of Paytm closed at Rs. 558, up by 6.31 per cent compared to the previous close, at BSE on Monday. 

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Paytm 2022 Recap Calls Delhi-NCR as India’s Digital Payments Capital

One97 Communications (OCL), which owns Paytm, on Wednesday announced the release of Paytm 2022 Recap, highlighting the interesting trends of transactions made through Paytm in the last year.

Paytm UPI is one of the most preferred payment methods for Indians, with its superfast and secure payments. Users can also check their individual payments journey with Paytm in 2022 through paytm.com/recap, the leading payments and financial services company said.

The company’s report showed that Delhi-National Capital Region emerged as India’s digital payments capital whereas Tamil Nadu’s Katpadi is the fastest-growing city for digital payments with 7X growth in 2022. Chennai and Trichy in Tamil Nadu have the highest percentage of offline payments on food and beverages while Amritsar saw the highest spending on health and grooming through Paytm.

Noida and Nagpur saw the highest percentage of spending via Paytm on micro-sellers or street side vendors. Paytm’s market in the Northeast also saw huge growth. The fastest-growing cities in the Northeast for unified payments interface (UPI) transactions are — Lohit in Arunachal Pradesh, South Sikkim and Ranipool, and Assam’s Guwahati, Dibrugarh, Jorhat and Kamrup.

The company said one user had made transactions in 106 cities across 20 states. Another user booked flights between Mumbai and Delhi 358 times using the Paytm app.

An intriguing observation is that the maximum number of payments have been done at 7.23 pm with Wednesday emerging as the busiest day in the week for digital transactions. Two of the most common names among Paytm’s users are Rahul and Pooja. The company helped its users avoid 1,618,796,629 trips to ATMs. The company said it was taking digital payments far and wide, driving financial inclusion with two out of three of its new users coming from smaller cities and towns.

Paytm continues to strengthen its leadership in offline payments with more than 5.5 million merchants now paying subscriptions for payment devices, the fintech firm said, adding that Paytm Soundbox is the sound of merchant transactions in India, with a new merchant and their customers being greeted by its melody every six seconds.

With Paytm UPI, the company enables seamless and superfast money transfers. One user referred more than 1,300 of his friends and family to Paytm last year and earned over Rs. 1 lakh.

Engaging observations have been seen in merchant transactions with Rs. 20 being the most common amount paid on Paytm merchant quick responses (QRs). Varanasi has seen 213 percent growth in offline QR transactions, Paytm said.

Festivals have also been swept by the digital payments wave. During the online Diwali sale season, the highest amount spent by a single user was Rs. 2.8 lakh. Another festival that saw a high volume of Paytm UPI transactions is Rakhi, with Rs. 1,100 being the favourite ‘shagan’.

Paytm spokesperson said, “As the pioneer of QR and mobile-based payments in India, we continue to see widespread love for the most trusted payments app — Paytm. Over the last year, we have seen greater adoption amongst consumers and merchants, leading to some interesting trends with Paytm UPI leading the way. With the trust bestowed upon us by our users, we remain focused on driving financial inclusion in India.”

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Paytm Monthly Transacting Users Grew 49 Percent YoY, Q1 Net Loss Widens to Rs 644.4 Crore

Digital financial services firm One97 Communications, which operates under the Paytm brand, on Friday said its consolidated loss widened to Rs. 644.4 crore in the first quarter ended June 30. The company had recorded a net loss of Rs. 380.2 crore a year ago. 

Paytm said its contribution profit, which excludes taxes and marketing expenses but includes promotional incentives, grew over three-fold to Rs. 726 crore in June 2022 quarter from Rs. 245 crore in the year-ago period.

The consolidated revenue from operations increased 89 percent to Rs. 1,680 crore during the reported quarter from Rs. 891 crore in the June 2021 quarter.

“Earlier this year, we had shared that we would achieve operating profitability by September 2023, driven by better monetisation, as well as moderating growth in costs. The first quarter of the financial year 2023 results exhibit our strategy is well-in-place, with focused improvement on unit economics, better expense management and an increasing mix of higher margin businesses (such as financial services and commerce) steering us on the path to profitability,” Paytm said.

The gross merchandise value more than doubled to Rs. 3 lakh crore in the June 2022 quarter from Rs. 1.5 lakh crore a year ago.

Paytm said that its monthly transacting users grew by 49 percent on a year-on-year basis to 7.48 crore.

During the reported quarter, loans disbursed through Paytm grew by over eight-fold to Rs. 5,554 crore from Rs. 632 crore in the June 2021 quarter.

“Disbursements in our loan distribution business are annualising at a run-rate of about Rs. 24,000 crore, and we believe there is ample opportunity for upsell in this business while being conservative on the quality of the book,” Paytm said in the financial performance report.

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