Paytm's founder Vijay Shekhar Sharma has said that he is aware of the expectations that the company carries and assured investors that they are on the path to profitability and free cash flows. He also said that Paytm’s journey to build a scalable and profitable financial services business has just started.
“After our recent quarterly reports which showed strong operating leverage and reduction in EBITDA losses, we are now excited about the next year of our journey, as we get close to EBITDA profitability and free cash flow generation,” Sharma also said.
One97 Communications reported its Q2 results for FY2023 last week. The fintech company saw its net loss narrow down to Rs 571 crore for the September quarter compared with Rs 644 crore in the June quarter. Additionally, its revenues for the quarter jumped 76 per cent year-on-year (YoY).
Sharma on Monday highlighted that the lending space in India has huge potential and that it is scaling up its lending business to bring more financial inclusion within the country. He said that high demand and low penetration presents significant prospects for the company’s lending business.
Despite incurring losses, Paytm’s focus on profitability got a thumbs up from analysts. JM Financial, post the earnings call, said, “We like the management’s approach to improve efficiencies and focus on profitability and expect Ebitda breakeven by FY26E. Paytm has corrected 70 per cent since its IPO while its operating metrics are gradually improving (net payment margin, ramp up of financial services).”
Analysts also believe that its financial services business is on a firm footing.
For the month of October, the Sharma-led company noted that the annualised run rate of loan disbursals reached Rs 37,000 crore. In addition, the number of loans disbursed grew by 161 per cent YoY to 3.4 million.
“We continue to seek growth and upsell opportunities as low penetration supports future growth potential, while we work with our partners to remain focused on the quality of the book,” Paytm shared.
The company also revealed that its payment devices for which it has partnered with merchants (through subscription model) across the country has exceeded 5.1 million. And the monthly transacting users also grew to 84 million last month compared to 63 million in the year-ago month.
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