SoftBank and Ant Financial-backed One97 Communications, Paytm's parent, posted a net profit of Rs 930 crore dring the second quarter of FY25, aided by gains from sale of the company’s entertainment ticketing business to Zomato.
The company had posted a loss of nearly Rs 292 crore in the corresponding quarter of the previous financial year.
The company gained Rs 1,345 crore on account of the sale of the entertainment ticketing business. In August, the company it sold its movie and events ticketing business to the listed food delivery and quick commerce aggregator. The final price of the sale was Rs 2,014 crore.
The sale also increased the company’s cash reserves to Rs 9,999 crore as of September end.
While company’s revenue rose 11% quarter-on-quarter (q-o-q) to Rs 1,660 crore, it fell around 34% from a year ago.
Shares of Paytm ended Tuesday's trading session with cuts of 5.3% at Rs 687.30 apiece on the Bombay Stock Exchange.
The indirect cost fell 17% sequentially to Rs 1,080 crore during the quarter, due to a reduction in non-sales employee costs, marketing expenses, and the absence of certain one-time expenses.
“We are early adopters of AI and it has helped us improve the productivity of our tech teams materially. Implementation of AI across businesses has helped us bring down employee cost,” the company said in an exchange filing.
The company posted an EBITDA (earnings before interest, taxes, depreciation and amortisation) loss of Rs 186 crore for the quarter under review, much lower than the Rs 545 crore in the June quarter.
Going ahead, Paytm says it will continue to focus on cost discipline. It will continue to invest in sales employees and marketing to drive growth in merchants and consumers, which will further drive growth of the platform.
The company’s payment services revenue rose 9% q-o-q to Rs 981 crore led by an increase in gross merchandise value (GMV), focus on monetisation and increase in merchant subscriptions. GMV stood at Rs 4.5 trillion as of the September quarter.
Net payment margin rose 21% q-o-q to Rs 465 crore in the quarter under review.
“In this quarter, in addition to focussing on growth of GMV, we were able to improve payment processing margin. We continue to expect payment processing margin (including UPI incentive) to be in the range of 5-6 bps for the year,” the filing said.
Merchant subscriptions were 1.12 crore as of 30 September. The company attributed the growth in subscription revenue to a higher active subscriber base.
Revenue from financial services rose 34% q-o-q to Rs 376 crore, aided by an increase in collection bonus in merchant loans and higher share of merchant loans which have higher take rate.