Paytm Q1FY25 results: Loss widens to Rs 840 crore, revenue falls 36%

Paytm Q1FY25 results: One97 Communications' income for the first quarter fell 33%; Paytm is currently awaiting regulatory approval to start onboarding new UPI users

One97 Communications, the parent company of fintech giant Paytm, reported on Friday that its consolidated loss had widened to Rs 840.1 crore for the quarter ended June 30, 2024 (Q1FY25). This was significantly higher than the Rs 358.4 crore loss reported in the same period last year.

The firm's revenue from operations declined to Rs 1,502 crore, a 36 per cent drop from Rs 2,342 crore in the year-ago period. The company's total income came to Rs 1,639.1 crore, a 33.5 per cent decline from Rs 2,464.2 crore reported during the corresponding period last year.

Breaking down the revenue, the payments business contributed Rs 900 crore, financial services added Rs 280 crore, and the remaining amount came from marketing services.

Quarter-on-quarter, the company’s losses widened from Rs 550.5 crore. Revenue from operations decreased by 33.7 per cent from Rs 2,267.1 crore. Total income also fell by 33.5 per cent from Rs 2,398.8 crore.

A significant factor affecting the company’s performance has been the restrictions imposed by the Reserve Bank of India (RBI) on Paytm’s associated entity, Paytm Payments Bank Limited (PPBL), at the beginning of this year.

In a regulatory filing, Paytm outlined its strategic focus areas aimed at driving sustainable growth and profitability:

• Leading the market with innovative merchant payment solutions, including new devices and the aggregation of various MDR-bearing (merchant discount rate) payment instruments.
• Reactivating dormant unified payments interface (UPI) customers and, once permitted, acquiring new UPI users with a disciplined approach to acquisition costs.
• Enhancing credit distribution by diversifying lending products and partners, with an emphasis on secured lending products.
• Increasing resources allocated to insurance and mutual fund distribution to leverage large monetisation opportunities.
• Providing marketing services to merchants to drive more commerce opportunities.
• Maintaining a stringent focus on compliance across all business operations.
• Paytm is currently awaiting regulatory approval to start onboarding new UPI users. As of June, the company had about 78 million monthly transacting users, a slight increase from March but a significant drop from January, when the number was approximately 10.4 crore.

Earlier, Paytm had written off Rs 227.1 crore worth of investment in PPBL, recognising it as "impairment losses".

The number of merchants subscribing to Paytm’s devices also saw a marginal increase, with about 1.09 crore merchants subscribed as of the end of June 2024, up slightly from the previous quarter.

Shares of One97 Communications were trading at Rs 449 on the BSE following the quarter results.