One97 Communications, the recently listed fintech giant that operates Paytm, on Saturday posted a 63.6 percent growth in revenue from operations for the July-September quarter, totaling Rs 1,086.4 crore.
The Noida-based digital payments firm generated Rs 663.9 crore in operational revenue during the same period last fiscal year (FY21). It attributed the increase in revenue to a 52 percent increase in non-UPI payment volumes (GMV) and a three-fold increase in financial services and other revenues, according to a regulatory filing.
The fintech unicorn’s overall income increased by nearly 50 percent during the period under review, reaching Rs 1,134.5 crore, up from Rs 758.1 crore in Q2FY21. Paytm’s payments and financial services revenue increased by 69 percent year over year to Rs 842.6 crore, while commerce and cloud services revenue increased by 47 percent to Rs 2,438 crore.
Paytm’s management in a statement said, “Our contribution profit increased to Rs 2.6 billion (~Rs 260 crore), up 592 percent year-on-year. Contribution profit for H1 FY 2022 at Rs 5.0 billion (~Rs 500 crore) has exceeded the contribution profit of Rs 3.6 billion (~Rs 360 crore) for the full previous financial year.”
In addition, its payment processing charges as a percentage of the gross merchandise value (GMV) have decreased from 0.52 percent in Q2 FY 2021 to 0.34 percent in Q2 FY 2021. Its net losses increased by 8.42 percent to Rs 473.5 crore in the July-September quarter, compared to Rs 436.7 crore in the previous quarter.
Paytm, led by Vijay Shekhar Sharma, has also minimized its indirect expenses from 70 percent of revenues in Q2 FY 2021 to 63 percent in Q2 FY 2022. Marketing and promotional expenses (excluding incentives and cashback) were Rs 102.3 crore, relatively stable year on year at 9 percent of revenues, despite the company increasing average Monthly Transacting Users (MTUs) by 14.4 million from Q2 FY 2021 to Q2 FY 2022. Its overall expenses in the second quarter of FY22 increased by 37 percent to Rs 1,599.4 crore, up from Rs 1,166.8 crore in Q2FY22.
Paytm noted in its filing, “With continued investments in technology and merchant base expansion, our employee cost (excluding ESOP) at Rs 3,672 million (~Rs 367.2 crore) reduced from 40 percent of revenues in Q2 FY 2021 to 34 percent in Q2 FY 2022.”
According to the filing, some of the massive growth patterns of the NCR-based fintech giant’s business feature an increase in payments revenues and profitability thanks to increased payment volumes from non-UPI instruments (including Paytm Payment Instruments). Payment services to merchants, the comeback of high-margin commerce, cloud-based growth due to increased advertising, and a surge in financial services revenues because of significant lending growth.
The company’s gross merchandise value (GMV) for Q2 FY 2022 was Rs 1,95,600 crore, an increase of 107 percent year on year, and the growing trend maintained in October 2021, when the GMV was Rs 83,200 crore, an increase of 131 percent year on year.
The quarterly statements come just over a week after the company went public with a discount on the bourses due to valuation and profitability implications. On November 18, shares of the digital payments firm were listed at a 9.06 percent discount on the BSE at Rs 1,955 each share, compared to the offering price of Rs 2,150.
Although its stock prices plunged by almost 37 percent in the first two trading days, they have gradually regained, with its market capitalization is now Rs 1.15 lakh crore. Its shares closed at Rs 1,781.15 on the BSE on Friday, down Rs 15.40 or 0.86 percent from its previous close.
Source: Paytm Earnings Release