Paytm share price trades in green post operating performance updates for May

Shares of One 97 Communications (Paytm) rose over a per cent but soon cooled off to trade with mild gains in morning trade on BSE on Monday (June 5) after the company's update on its operating performance for the month of May showed healthy growth in the consumer base for the June quarter to date. The stock opened at ₹724 against the previous close of 717.55 and touched a high and low of ₹725.45 and ₹711.50 in trade so far.

The company in a BSE filing on Monday (June 5) said it continued witnessing the expansion of the consumer base with average monthly transacting users (MTU) at 9.2 crore for the quarter to date (average for April and May 2023), up 24 per cent year-on-year (YoY).

Besides, it said its leadership in payment monetisation continued in May, as subscription devices for payment devices like Soundbox and POS machines continued witnessing increased acceptance by merchants.

Paytm added that the number of merchants paying subscriptions for payment devices has reached 75 lakh as of May 2023, an increase of 4 lakh devices in the month.

"Merchant Payment Volumes (GMV) for the quarter to date (for April and May 2023) stood at ₹2.65 lakh crore ($32.1 billion), with YoY growth of 35 per cent. Continued scale in our loan distribution business with disbursements of ₹9,618 crore ($1.2 billion, YoY growth of 169 per cent) and 85 lakh loans (YoY growth of 54 per cent) distributed in the quarter to date (for April and May 2023)," the company said.

"We continue to see growth in the distribution of Postpaid and Personal Loans. We have partnered with large NBFCs and Banks and we continue to focus on the quality of loans distributed through our platform. We currently have seven lending partners and we aim to onboard three-to-four partners in FY24," said Paytm.

Paytm shares hit their 52-week high of ₹844.40 on BSE on August 8, 2022. As of the close of the previous session, the stock is 15 per cent below its one-year peak. The stock has gained strength in the current calendar year, jumping over 35 per cent so far against a 3 per cent gain in the benchmark Sensex.

As Mint reported earlier, Paytm's consolidated net loss narrowed sharply to ₹168.4 crore in the fourth quarter of FY23, compared to a loss of ₹761.4 crore in Q4 of the previous year. The performance was aided by an increase in GMV, higher merchant subscription revenues, growth of loans disbursed, and full years’ UPI incentives reported during the quarter.

Its revenue from operations stood at ₹2,334.5 crore in Q4FY23, registering a growth of 51.5 per cent from ₹1,540.9 crore in Q4FY22 and up by 13.2 per cent from ₹2,062.2 crore.

Global financial firm Citi recommended a 'buy' on Paytm stock after the Q4 numbers and raised the target price to ₹1,144 from ₹1,103, citing Paytm Q4 numbers were well ahead of Citi and consensus estimates on adjusted EBITDA at ₹230 crore ((Citi/Consensus: ₹90 crore/ ₹110 crore) and adjuted EBIT at ₹74.4 crore (Citi: - ₹62 crore).

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