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Business News/ Companies / Company Results/  Paytm Q3 result preview: Fintech giant likely to see 32% YoY revenue growth, losses to narrow
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Paytm Q3 result preview: Fintech giant likely to see 32% YoY revenue growth, losses to narrow

Paytm Q3 loss is estimated to drop by 29% YoY to ₹280 crore. On a sequential basis, losses may narrow by 4.3% from the September quarter.

Paytm share price has seen a decent rally over the past one year. Paytm shares have gained over 42% in one year and are up more than 22% in one month.Premium
Paytm share price has seen a decent rally over the past one year. Paytm shares have gained over 42% in one year and are up more than 22% in one month.

Paytm is expected to report strong revenue growth with narrowing down its net loss during the third quarter of FY24 driven by improvement in operational performance.

One 97 Communications, the parent company of fintech giant Paytm, is set to announce its earnings for the October-December quarter of FY24 on Friday, January 19.

The company’s revenue from operations during Q3FY24 is expected to grow 32% year-on-year (YoY) to 2,721 crore, as per brokerages’ estimates. Revenue may rise 8% on a sequential basis.

Paytm Q3 loss is estimated to drop by 29% YoY to 280 crore. On a sequential basis, losses may narrow by 4.3% from the September quarter.

Also Read: HUL Q3 result preview: FMCG major likely to see flat revenue, net profit growth; weak demand to hit volumes

The company’s operating profitability is also expected to increase, driven by improvement in contribution margin on a sequential basis

In the September quarter, Paytm reported a revenue of 2,518.6 crore and a net loss of 290.05 crore.

Yes Securities assumes 6% QoQ growth in Payments Services to Consumers, 12% QoQ growth in Payments Services to Merchants and 6% QoQ growth in Financial Services and Others and arrives at an overall growth in revenue from operations of 8.1% QoQ. 

“We forecast Payment Processing Charges (PPC) as a proportion of Payments Revenue to be at 54.5%, a metric that was 54.4% in 2QFY24. We arrive at a Total Expenses (ex PPC) growth of 6% QoQ, compared with a growth of 3% in 2QFY24, resulting in an EBITDA margin (ex-Other Income and after ESOP cost) of -8.3%, an improvement of 89 bps QoQ," said Yes Securities.

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Brokerage firm Motilal Oswal Financial Services expects healthy growth in total revenue and decline in disbursements and GMV during the quarter. However, it also expects the number of subscription payment devices to grow.

Meanwhile, UBS expects Paytm to break even on EBITDA in FY25 and reach a 20% EBITDA margin by FY28. It views this as a key re-rating trigger, as seen at other new-age companies such as Zomato, where investors value profitable growth more than pure growth.

Read here: Paytm share price rallies over 3% as UBS initiates coverage with a ‘Buy’ call; sees EBITDA breakeven in FY25

Paytm's omni-channel payment business has earned it a 25% industry Gross Merchandise Value (GMV) share. Its large top-of-the-funnel payment business has accelerated monetisation across merchant devices and loans. 

“We think regulatory issues have passed for payments and expect Paytm to benefit from a 24% CAGR in the payment player fee pool in FY23- 28E. Beyond payments, Paytm’s loan origination has grown 7x in FY22-24E, with lending partners rising to nine in FY24 from four in FY22," said UBS.

Paytm share price has seen a decent rally over the past one year. Paytm shares have gained over 42% in one year and are up more than 22% in one month.

At 3:20 pm, Paytm shares were trading 2.07% higher at 751.05 on the BSE.

Read all Q3 results here

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Published: 18 Jan 2024, 03:22 PM IST
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