Paytm Shares Surge Over 5% As Fintech Posts 1st Quarterly Operating Profit Increase Since IPO

One97 Communications Ltd aka Paytm’s share price rose by close to 5% shortly after markets opened on Monday as the mobile payments and financial services giant posted its first-ever quarterly operating profit since listing on the stock market.

What Happened? Paytm late Friday posted a 42% increase in revenue from operations in the third quarter ended December 2022 to ₹2,062 crore while also managing to narrow its consolidated net loss to ₹392 crore from a figure of ₹778.4 crore in the same period a year ago.

Paytm saw a strong increase in merchant subscription revenues, alongside growth in loan distribution and its commerce business, leading to an 8% quarter-on-quarter improvement in revenue from operations.

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The company’s merchant subscriptions moved up to 5.8 million compared to 3.8 million a year ago while average monthly transacting users (MTU) also continued to surge to 85 million for the quarter, increasing 32% from the same period last year. The number of loans disbursed through Paytm also saw remarkable growth over the past year, rising 137% year-on-year.

Paytm founder and CEO Vijay Shekhar Sharma said the company during the reported quarter has achieved its target for operational profit, excluding ESOP cost.

“I wrote to you on April 6, 2022, and set a target for EBITDA before ESOP cost breakeven by the September 2023 quarter. I am very happy to share that our company has achieved this milestone of EBITDA before ESOP cost profitability in the December 2022 quarter itself. This is three quarters ahead of our guidance,” Sharma said.

“With our focus on growth and keeping a tight vigil on operational risk and compliances, I am very confident that we will soon achieve our next milestone of becoming a free cash flow generating company," he added.

Price Action: Paytm’s share price was up 5.39% on Monday to ₹553.10.

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