India’s Paytm sees losses narrow to ₹208 crore, shares tick up

Paytm posted its earnings for the December quarter on January 20.

The payment giant reported that its net loss for the December quarter narrowed to ₹208 crore (around $24.4 million), compared to ₹220 crore in the same period last year.

During the quarter, Paytm completed the sale of its stake in Japan’s PayPay Corporation for $280 million (₹2,372 crore), resulting in a reported gain of ₹388 crore.

This follows the company’s massive profit in the September quarter, driven by a one-time gain from the sale of its ticketing business to Zomato.

Without this exceptional gain, Paytm would have remained in the red.

Despite the narrowing loss, the company continued to experience challenges, though its digital payments business showed signs of recovery, particularly following the winding down of its payments bank unit.

Revenue for the quarter fell 36%, standing at ₹1,828 crore, down from ₹2,850 crore in the same quarter last year.

However, on a quarter-on-quarter (Q-o-Q) basis, revenue grew by 10% due to an increase in Gross Merchandise Value (GMV), growth in subscription revenues, and a rise in revenues from financial services distribution.

Shares of the fintech major were up over 1% to trade at ₹910.65 on Monday.

Paytm’s revenue breakdown

Of the total revenue of ₹1,828 crore, ₹1,059 crore came from the payments business, showing an 8% growth on a Q-o-Q basis, while ₹502 crore was generated from financial services, reflecting a 34% increase Q-o-Q.

Paytm also reported having 1.17 crore merchant subscriptions as of December 2024, an increase of 5 lakh Q-o-Q, with revenue per merchant rising.

The company noted that its strategy of refurbishing inactive devices and redeploying them at new merchants contributed to the rise in revenue per merchant and reduced capital expenditure.

Paytm’s Monthly Transacting Users (MTUs) on the consumer payments side increased to 7.2 crore in December 2024, up from 6.8 crore in September 2024, following the Reserve Bank of India’s approval to onboard new UPI customers in October.

Paytm’s financial services revenue was bolstered by an increase in the share of merchant loans, higher trail revenue from the Default Loss Guarantee (DLG) portfolio, and better collection efficiencies.

During the quarter, 5.9 lakh customers utilized Paytm’s platform for services like loans, equity broking, and insurance.

The company disbursed ₹3,831 crore in merchant loans, showing slight improvement from the previous quarter, with a significant portion under the DLG model.

Paytm continued to recalibrate its personal loans business, focusing on a distribution-only model and tightening risk policies in collaboration with lenders.

The company disbursed ₹1,746 crore in personal loans during the quarter. It also saw increased interest from lenders to partner under the DLG model for both merchant and personal loans, which is expected to boost disbursements and expand partnerships with new lenders.

The outstanding AUM for DLG portfolios as of December 31, 2024, stood at ₹4,244 crore, compared to ₹1,651 crore on September 30, 2024.

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