Paytm's Payment Profitability Sees Significant Growth in Q4FY23

In its latest financial results, Paytm has announced a significant improvement in its payment profitability in the quarter ended March 2023 (Q4FY23). The company's net payment margin expanded by an impressive 158 per cent year-on-year (YoY) to reach ₹687 crore. This growth is driven by various factors, including the company's ability to monetize Paytm app traffic in its Commerce and Cloud segment by providing marketing services to its merchants.

Paytm's Commerce and Cloud revenue grew by 23 per cent YoY to ₹392 crore in Q4FY23, while the company's overall financial services and other revenue saw a significant increase of 183 per cent YoY to ₹475 Cr. This growth is largely attributed to a 364 per cent increase in the value of loans disbursed through Paytm's platform.

The company's loan distribution business has also seen significant growth, with revenue from financial services and others growing by 252 per cent in FY2023 to ₹1,540 crore. Additionally, Paytm's payments revenue grew by 41 per cent YoY to ₹1,467 crore in Q4FY23, with payment revenue growing 28 per cent YoY after excluding prior quarters' UPI incentives.

These numbers demonstrate the profitability of Paytm's payment business, despite the higher share of UPI. The company has beaten estimates from analysts such as Bank of America, Goldman Sachs, Morgan Stanley, Citi, and Macquarie, which forecast Q4 revenues ranging from ₹2,189 crore to ₹2,319 crore.

Overall, Paytm's latest financial results indicate a significant improvement in its payment profitability, driven by growth in its Commerce and Cloud revenue, loan distribution business, and payments revenue.

Paytm 200m 98m yoy