Paytm shares gained 5% today; Q4 results on Wednesday, May 22; earnings preview

Shares of One 97 Communications Ltd (Paytm) climbed 5 per cent in Tuesday's trade ahead of its March quarter results on Wednesday, May 22. Analysts largely expects Paytm to see widening of losses sequentially. They said investors would keenly follow commentary on how the fintech major is looking to regain lost ground. 

YES Securities expects Paytm to report a loss of Rs 751.60 crore for the March quarter. It sees revenue for Paytm falling 2.1 per cent YoY to Rs 2,284.30 crore.  Dolat Capital Market sees Q4 loss at Rs 398 crore. It sees revenue at Rs 2,023 crore, down 13 per cent. This brokerage expects 29 per cent dip QoQ due to PPBL business transition. Adjusted Ebitda is seen at Rs 50 crore, helped by UPI incentive. 

"Expect higher PAT loss due to weak operating performance." it said while expecting details on MTU, devices, loans and commentary on regaining lost ground would be keenly watched.

Motilal Oswal expects Paytm to report sales at Rs 1,830 crore, down 21 per cent YoY. It sees net loss at Rs 469.30 crore. Contribution margin is seen at 59.6 per cent. Ebitda margin is seen at minus 23.6 per cent while adjusted Ebitda margin at minus 2.5 per cent.

"We estimate a 23 per cent YoY decline in GMV in 4QFY24, amounting to Rs 3.9t. Additionally, the value of disbursed loans is expected to plunge 67 per cent sequentially, as the company has suspended postpaid loans due to RBI concerns and put merchant loans on hold pending data on QR transition," Motilal Oswal said. 

YES Securities sees 17 per cent sequential degrowth in Payments services to consumer, 5 per cent degrowth in payments services to merchants and 55 per cent QoQ degrowth in financial services to suggest a degrowth of 20 per cent in sequential revenue. 

It sees payment processing charge (PPC) as a proportion of payments revenue to be at 54 per cent against 58.5 per cent in the December quarter. It suggested Ebitda margin (ex-other income and after ESOP cost) at minus 28.9 per cent, down 2300 basis points QoQ. 

The stock climbed 5 per cent to hit a high of Rs 361.50. It eventually closed the day at Rs 351.75, up 2.16 per cent.