Paytm's net loss likely to widen YoY in Q3; revenue may slip 34%: Analysts

Paytm's revenue is expected to decrease by 34 per cent Y-o-Y, analysts and investors will eye traction on new business verticals

One 97 Communications, the parent company of Paytm, is scheduled to release its third quarter (Q3FY25) earnings on Monday, January 20, 2025.

 

As per Bloomberg estimates Paytm's revenue is likely to decline by 34.4 per cent year-on-year (Y-o-Y) to Rs 1,868.4 crore as compared to Rs 2,850.5 crore a year ago. On a quarter-on-quarter (Q-o-Q) basis, revenue is forecasted to grow 10.8 per cent.

 

The company's net loss is likely to widen Y-o-Y to Rs 35.05 crore for the quarter ended December 31, 2024, as compared to a loss of Rs 22 crore a year ago, as per Bloomberg. In Q2FY25, the company reported a net profit of 93 crore.  Analysts and investors will eye traction on new business verticals. 

Here's what analysts expect from Paytm Q3FY25:

Motilal Oswal: Analysts at Motilal see Paytm's disbursements and gross merchandise value (GMV) to increase sequentially. Further, total revenue growth is expected to improve sequentially.

 

The brokerage expects revenue for the third quarter ended December 31, 2024, at Rs 1,800 crore as compared to Rs 1,660 crore in Q2.

 

Master Capital Services: Vishnu Kant Upadhyay, AVP - research and advisory, Master Capital Services expects a healthy growth in Paytm's GMV in Q3FY25.

 

Upadhyay believes despite facing regulatory challenges that led to a decline in monthly transactions, Paytm has successfully maintained a stable merchant base of 42 million through strategic initiatives to retain its existing merchants.

 

He anticipates revenue from operations to grow by 8 per cent Q-o-Q, surpassing Rs 1,800 crore along with the rise in non-operational income.  ALSO READ: Tech Mahindra Q3FY25: Net profit jumps 93% to Rs 983 cr, revenue up 1.4%

 

Stoxbox: Abhishek Pandya, research analyst, StoxBox expects Paytm's operational revenue to improve in Q3 due to strong growth in merchant device subscription revenue.

 

Additionally, Pandya believes the recent approval from the Ministry of Finance for foreign direct investment (FDI) in its subsidiary, PPSL, along with the reapplication for a Payment Aggregator (PA) license with the Reserve Bank of India (RBI), marks a crucial development.

 

For Q3, he anticipates further enhancements in Ebitda due to the management's strategic focus on reactivating inactive users, increasing  Average Revenue Per User (ARPU), and expanding its ecosystem. Paytm is actively working on cost optimisation and has seen an increase in non-operating income. This includes treasury income from the recent stake sale in its entertainment business and PayPay Corp.

 

These factors are expected to position the company for profitability by FY26 (without one-off gains). Therefore, he expects Paytm to deliver steady performance in Q3FY25.