Paytm is ‘on the right track to profitability,’ according to CEO Sharma, as loan disbursements increased 387% in October.

Paytm’s loan disbursement value increased 387% year on year to 3,056 crore, while the number of loans disbursed increased 161%.

In a letter to shareholders, Paytm CEO Vijay Shekhar Sharma stated that the company is on the right track to profitability and free cash flows, citing previous quarterly results that demonstrated good operating leverage and a reduction in EBITDA losses.

The company stated that its loan distribution business continued to develop at a rapid pace, with disbursements through Paytm’s platform reaching an annualised run rate of 37,000 crore in October. In the month of October 2022, the value of loans disbursed increased 387% year on year (YoY) to 3,056 crore, while the number of loans disbursed increased 161% YoY to 3.4 million loans.

“I am delighted to provide an update on our operating numbers for the month of October. We are now thrilled about the next year of our journey, as we get closer to EBITDA profitability and free cash flow generation, following our previous quarterly results that demonstrated good operating leverage and a reduction in EBITDA losses “CEO Sharma stated.

“We entered the public markets a year ago.” We are conscious of the expectations placed on Paytm, and I can promise you that we are on the correct track to profitability and free cash flows,” he added.

Meanwhile, total merchant GMV processed through its platform in October 2022 totaled 1.18 Lakh crore, representing a 42% year-on-year increase, owing in part to the festive season, and the company stated that over the past few quarters, its focus has been solely on volumes that generate profitability, either through net payments margin or direct upsell potential.

“We continue to strengthen our leadership in offline payments, with merchants paying us subscription (for payment devices) currently numbering more than 5.1 million across the country.” The significant use of devices promotes larger payment volumes and subscription revenues with our subscription as a service model, while boosting the funnel for our merchant loan distribution,” it stated.

The company’s net loss increased to 571 crore in the July-September period, up from 473 crore the previous year, but down from 650 crore in the preceding quarter of June 2022.