PC: Mint
One97 Communications Limited, the parent company of Paytm, continues to demonstrate resilience and growth in the dynamic financial landscape, as evidenced by its robust performance in the second quarter of FY25. The company reported a revenue of Rs 1,659.5 crore from operations during Q2 FY25, marking a notable 10.5% quarter-on-quarter growth compared to the previous quarter.
Income from payment services remained the largest contributor to Paytm’s operating revenue, at 59% of the total operating revenue and grew 9% QoQ to Rs 981 crore in Q2 FY25. The remaining financial services, device sales, and other allied services account for the rest and hence signify the diversified business and revenue streams for Paytm.
Now, speaking of the cost side, employee benefit accounting for 38% of the total cost, Paytm incurred Rs.709 crore in Q2 FY25, which was down by 11.2% compared to the previous quarter. It allocated Rs.225 crore to ESOPs. The cost for marketing and payment processing was to be at Rs.151 crore and Rs.305 crore for Q2 FY25, whereas the total operating cost came to Rs.1,864 crores for FY25.
With prudent cost management and decent scale in marketing and employee benefits, Paytm has been able to bring its losses down as much as 47% to Rs 437 crore in Q2 FY25. Here, the company has reported a non-operating income of Rs 1,345 crore on account of the sale of its entertainment ticketing business to Zomato, which has been excluded for computing loss as it is a one-time income.
However, merchants continue to show an uptick in disbursals for loans, growing to Rs 3,303 crore in Q2 FY25 from Rs 2,508 crore in the last quarter. Personal loan disbursals did decline marginally to Rs 1,977 crore in Q2 FY25 due to lenders tightening their risk policies in light of the current economic environment.
Despite such headwinds, Paytm reported EBITDA before ESOP costs of Rs 359 crore for Q2FY25, reflecting enhanced operational efficiencies and measures to control costs. The company reported an EBITDA of Rs 186 crore in Q2FY25, underlining its strong commitment toward profitability and sustainable growth.
The company ended the quarter on a strong note as it maintained a healthy cash balance of Rs 9,999 crore, which reflects its solid liquidity position and financial stability. On the other hand, the Paytm stock faced a 7.39% fall in trading today. The share price was at Rs 672.3 per piece at 12:04 PM. This brings out the volatility and competitiveness of the market as Paytm’s market capitalisation is around Rs 42,800 crore ($5 billion).
Overall, Paytm’s Q2 FY25 performance is a testament to its ability to drive growth while navigating the challenges of today’s uncertain environment and dynamic shifts in the market. Operational efficiency, strategic investments, and diversified revenue streams all clearly position the company to take advantage of emerging opportunities in the future and continue to deliver long-term value to its various stakeholders.
