Digital financial services firm One97 Communications, which operates under the Paytm brand, expects to maintain operating profit growth, company founder and CEO Vijay Shekhar Sharma said on Monday. Paytm’s EBITDA (earnings before interest, tax, depreciation and amortization), an indicator of operating profit before improving ESOP cost margin by Rs 31 crore, during the third quarter ended December 31, 2022.
The company has calculated an incentive of Rs 130 crore from UPI transactions over the three quarters but Sharma said the incentive could technically make Q4 a free cash flow positive quarter but Paytm would report it as a one-time item. “The UPI incentive will be one-off and we will clearly call out as one-off. The Rs 130 crore that we are quoting is for three quarters. The fourth quarter number will top it. Because we Calling it a one-off – time item, we are not calling it free cash flow generative. We will call it free cash flow generative when we are consistently sure of it,” Sharma said during the earnings call. He said that the company will focus on increasing EBITDA profitability.
“We will continue to grow EBITDA profitability. Can it go to double digits? In what timeline? I don’t know. But it certainly can go to double digits. But like I said it’s continued EBITDA growth that We are looking forward from here,” Sharma said. Paytm achieved operating profit excluding ESOP cost in the December 2022 quarter itself, which is three quarters ahead of the company’s guidance. Paytm Payments to onboard new customers Responding to a query on RBI approval for the bank, Sharma said he is hopeful of getting approval soon based on ongoing discussions with the banking regulator.
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The Reserve Bank of India (RBI) has barred Paytm Payments Bank from onboarding new customers from March 2022, citing “material supervisory concerns” observed in the bank. Paytm President and Group Chief Financial Officer Madhur Deora said that till Friday the company has completed. Share buyback of Rs 796 crore. The company’s board has approved share buyback of Rs 850 crore at Rs 810 per share. Paytm narrowed its consolidated net loss to Rs 392 crore in the third quarter ending December 2022. The company had reported a net loss of Rs 778.4 crore in the same period a year ago.
Its revenue from operations during the quarter grew nearly 42 per cent to Rs 2,062.2 crore as against Rs 1,456.1 crore in the year-ago period. Contribution profit, which excludes taxes and marketing costs, more than doubled to Rs 1,048 crore during the reported quarter on a year-on-year basis. Paytm Services revenue grew 21 per cent to Rs 1,197 crore during the reported quarter from Rs 992 crore in the December 2021 quarter. The value of loans disbursed through Paytm grew four-fold to Rs 9,958 crore in the December 2022 quarter from Rs 2,181 crore in the year-ago period. Users doing average monthly transactions on Paytm increased from 64 million in December 2021 to 85 million in December 2022. On Monday, Paytm shares closed at Rs 558 on the BSE, up 6.31 per cent over its previous close.
(With inputs from PTI)
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