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Paytm Results: From near-term financial hit to job cuts, 5 highlights from Vijay Shekhar Sharma’s letter to shareholders
- Paytm CEO Vijay Shekhar Sharma highlighted the company’s commitment towards strengthening the governance framework, improving cost efficiencies and the impact on company’s financial performance due to regulatory actions.
Paytm Results: One 97 Communications, the parent company of Paytm, on Wednesday reported widening of net loss to ₹550 crore in the quarter ended March 2024, while its revenue from operations dropped marginally to ₹2,267.10 crore.
Paytm CEO Vijay Shekhar Sharma expects the company to see near-term financial impact on revenue and profitability, after the Reserve Bank of India’s (RBI) ban on its associate Paytm Payments Bank (PPBL).
In a letter to shareholders, Sharma highlighted the company’s commitment towards strengthening the governance framework, improving cost efficiencies and the impact on company’s financial performance due to regulatory actions.
Here are 5 key takeaways from Paytm founder and CEO Vijay Shekhar Sharma’s letter to shareholders.
1] EBITDA before ESOP Profitability in FY24
Paytm achieved its first full year EBITDA before ESOP profitability (since IPO) of ₹559 crore in FY24. Sharma noted that the company demonstrated strong revenue momentum and continued disciplined focus on profitability, in spite of regulatory action on the associate entity, Paytm Payment Bank Ltd. (PPBL).
2] Transition of payments business
Sharma said that the company has successfully transitioned its core payment business from Paytm Payments Bank Ltd to other partner banks. According to him, this move de-risks its business model and also opens up new opportunities for long-term monetization.
3] Impact on revenue, profits
Sharma said the company expects near-term financial impact to its revenue and profitability, due to disruptions faced in business in Q4 after RBI’s ban on PPBL.
“This includes steady state impact due to pausing of PPBL wallet. We had also paused a few other payments and loan products to our customers during the last quarter, and I am happy to share that many such products have been restarted or in the process of starting soon,” Sharma added.
4] AI-driven cost efficiencies
Led by capabilities of Artificial Intelligence (AI) and focussing on core business, Paytm is also working on significant cost efficiencies including leaner organization structure.
“Our ongoing experiments and learnings in AI promise to revolutionize customer and merchant care for the financial industry, while also unlocking new avenues for revenue generation and cost savings. We anticipate tangible results from these initiatives in the coming quarters, further bolstering our competitive advantage in the market,” Sharma told shareholders in the letter.
Also Read: Paytm Results: From widening losses to Payments Bank update, 10 key highlights from Q4 earnings
5] Strong governance
Sharma emphasised on the company’s commitment towards building its business according to regulatory compliances and prudent operations risk policies. He informed that the company was taking various steps to strengthen the governance framework across our group entities (especially regulated entities) by appointing subject matter experts as advisors or independent directors, reviewing various processes etc.
He also ensured having greater regulatory engagement and higher focus on compliance.
At 12:00 pm, Paytm shares were trading 0.64% lower at ₹349.50 apiece on BSE.
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Business NewsCompaniesCompany ResultsPaytm Results: From near-term financial hit to job cuts, 5 highlights from Vijay Shekhar Sharma’s letter to shareholders
First Published:22 May 2024, 12:12 PM IST
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