Paytm ’on right path to profitability’, says CEO Sharma as loan disbursals grow 387% in October

Paytm's chief executive Vijay Shekhar Sharma in a letter to shareholders said that the company is on the right path to profitability and free cash flows, after its recent quarterly reports which showed strong operating leverage and reduction in EBITDA losses.

The company said its loan distribution business continued to witness accelerated growth with disbursements through Paytm's platform now at an annualised run rate of ₹37,000 crore in the month of October. The value of loans disbursed grew 387% year-on-year (YoY) to ₹3,056 crore, while the number of loans disbursed grew 161% YoY to 3.4 million loans in the month of October 2022.

"I am pleased to share our update on operating metrics for the month of October. 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," said CEO Sharma.

“One year ago, we made our way to the public markets. We are aware of the expectations that Paytm carries, and I assure you that we are on the right path to profitability and free cash flows,” he added.

Meanwhile, the total merchant GMV processed through its platform for the month of October 2022 aggregated to ₹1.18 Lakh crore, marking a y-o-y growth of 42%, partly due to festive season and the company said that over the past few quarters, its focus is only on volumes that generate profitability, either through net payments margin or direct upsell potential.

“We continue to strengthen our leadership in offline payments, with merchants who pay us subscription (for payment devices), now exceeding 5.1 million across the country. With our subscription as a service model, the strong adoption of devices drives higher payment volumes, and subscription revenues, while increasing the funnel for our merchant loan distribution,” it said.

The company's net loss in the July-September period swelled to ₹571 crore as compared to ₹473 crore a year earlier, however narrowed from ₹650 crore in the previous quarter of June 2022.

Shares of One 97 Communications Ltd (Paytm) were trading more than a per cent to ₹654 apiece on the BSE in Monday's early treading session.