India’s Paytm says quarterly revenue rises 39% as loan demand soars

India’s Paytm says quarterly revenue rises 39% as loan demand soars

Indian digital payments firm Paytm (PAYT.NS) has reported a 39% increase in quarterly revenue, driven by high demand for loans. The parent company, One 97 Communications Ltd (PAYT.NS), which owns India’s second-largest digital payments app, announced that revenue for the three months ending June 30 rose to 23.42 billion Indian rupees ($285.68 million), up from 16.80 billion rupees in the same period last year.

Despite a rise in employee-related expenses and the absence of government incentives, Paytm achieved an operating profit for the third consecutive quarter. Operating profit reached 840 million rupees, a significant improvement compared to the operating loss of 2.75 billion rupees in the previous year. Additionally, the net loss narrowed to 3.57 billion rupees.

However, the operating profit for this quarter was lower than the previous quarter, which included a government incentive to promote payments through the Unified Payments Interface (UPI) digital payments system. Paytm defines operating profit as the core profit before the cost of employee stock-owning plans and achieved its first operating profit nine months ahead of schedule in the final quarter of 2022.

Expenses for the quarter increased by 15.9% to 28 billion rupees, primarily due to appraisals during the period, which drove up employee costs by 21%. Paytm’s core payments business saw a 31% increase in revenue, while its financial services revenue, including buy now pay later loans, rose by an impressive 93%. The fast-growing financial services business accounted for 22.3% of the total revenue.

Paytm’s contribution margin, a measure of revenue after deducting cashbacks and charges such as payment processing, rose to 56% from 43% in the previous year. This indicates improved profitability and efficiency in the company’s operations.

In conclusion, Paytm’s quarterly revenue has experienced significant growth, driven by the increasing demand for loans. Despite challenges such as rising expenses and the absence of government incentives, the company achieved an operating profit for the third consecutive quarter. The financial services business has emerged as a key revenue generator, contributing 22.3% to the total revenue. Paytm’s improved contribution margin reflects enhanced profitability and efficiency in its operations.

About News Team

Hi, I'm Alex Perez, an experienced writer with a focus on lifestyle and culture news. From food and fashion to travel and entertainment, I love exploring the latest trends and sharing my insights with readers. I also have a strong interest in world news and business, and enjoy covering breaking stories and events.

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