Paytm Commerce is now generating revenue on the operational level, according to one analyst
- ByStartupStory | November 9, 2022
An analyst said on the earnings call that One97 Communications’ commerce segment had become operationally profitable. The Paytm company, One97 Communications, has set a goal of turning a profit by the end of the fiscal year in September 2023.
“The corporation ensures that cash-back incentives do not exceed profits in the retail sector. The operational side of this company is also profitable now “Kunal Shah, an analyst at ICICI Securities, summarized key points from Paytm’s earnings call in an email. Paytm’s commerce and cloud services mostly consist of advertisements, tickets, and discount coupons.
To the tune of Rs 377 crore, Paytm has reported a 55 percent year-over-year increase in Commerce and Cloud revenues. This growth can be attributed to higher ticket sales, which increased commerce revenue by 49 percent year over year, while advertising revenue recovered and credit card revenues continued to scale, contributing to the cloud division’s 58 percent growth.
“Since this is a substantial figure, it will increase the cost of processing payments for future promotions and cashback incentives. The net payment margin, however, will keep rising as the firm expands “What Shah had to say.
The firm would “continue to cut operations on which it is not generating payment margin,” Shah stated in the key takeaways memo for the results call.
For the three months ending September 30, 2022, the company’s consolidated loss widened to Rs 593.9 crore.
According to a regulatory filing, Paytm lost Rs 481 crore during the same time last year. Compared to the September 2021 quarter, Paytm’s consolidated revenue from operations climbed by roughly 76%, reaching Rs 1,914 crore. Paytm said that its income from consumer payment services climbed by 55% year over year to Rs 549 crore, while revenue from merchant payment services increased by 56% year over year to Rs 624 crore.
The business said that due to greater monetisation and a continuous emphasis on reducing payment processing rates, Paytm’s net payment margin (calculated as payments revenues + other operational revenues, minus payment processing cost) grew multifold to Rs 443 crore year over year.
Its income from the financial services industry climbed 293 per cent to Rs 349 crore on a year-on-year basis and now accounts for 18 percent of the overall revenue, compared to 8 per cent in the September 2021 quarter.
What Paytm said about its loan disbursements.
Paytm said that its loan disbursements increased by 224 percent year over year, reaching a total of Rs 7,313 crore in the second quarter of fiscal year 23.
The firm reported a 39 percent year-over-year gain in monthly transacting users (MTU) to 7.97 crore and a 2 percent increase in merchants to 2.95 crore.
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