Paytm posts Rs 928.3 cr profit in Q2 on gains from sale of entertainment ticketing biz

New Delhi, Oct 22 (PTI) One97 Communications, the parent of Paytm, on Tuesday posted a net profit of Rs 928.3 crore in the quarter ended in September 2024, compared to a Rs 290.5 crore loss it incurred a year ago, as an exceptional gain from sale of entertainment ticketing business to Zomato improved the fintech firm's Q2 scorecard.

The revenue from operations slumped 34.1 per cent year on year to Rs 1,659.5 crore during the just-concluded quarter.

For the July-September quarter of FY25, Paytm reported a Profit after Tax (profit attributable to owners of parent) of Rs 928.3 crore. This included an exceptional gain of Rs 1,345 crore on account of sale of the entertainment ticketing business, Paytm said in its earnings statement.

"The company believes that the continued focus on payments and distribution of financial services will drive sustained, profitable growth. The same is reflected in its growing revenue for payments business of Rs 981 crore, up 9 per cent QoQ, and revenue from financial services at Rs 376 crore, up 34 per cent QoQ," it said.

The company's indirect cost has come down by 17 per cent sequentially to Rs 1,080 crore due to reduction in employee costs (down 13 per cent QoQ), marketing expenses and absence of certain one-time expenses incurred in Q1 FY 2025.

On the company’s merchant subscription business, the company said that new subscription paying device merchant sign ups have exceeded January 2024 levels. Currently the total merchant subscriptions stand at 1.12 crore.

"Our plan is to pick up inactive devices and redeploy them after refurbishment, which helps us reduce capex. When we pick up inactive devices, our merchant count reduces. We plan to continue reactivating merchants and redeploying inactive devices to new merchants over the next 2-3 quarters. This will lead to higher active merchant base and higher revenue,” the company said.

The company said that over the next quarters it should sharply focus on being a compliance-first company, continuing merchant payment innovations and driving customer acquisition, increasing high margin financial services revenue by expanding financial services partners, and use of Artificial Intelligence to reduce costs.

The company has also announced that it will start with DLGs (Default Loss Guarantees) on the distribution of merchant loans.

“There is increased interest and comfort from existing as well as new lenders to expand the partnership due to better asset quality trends and higher demand from our merchants. Following the regulatory framework, and the emerging market practice, we see increased willingness from lenders to partner and allocate more capital in the Default Loss Guarantee (DLG) model," it said.

The DLG model will help to increase disbursements with the existing partners and expand partnerships with new lenders for the loan distribution, it said. The company has taken approval from its Board for a partner providing DLG of Rs 225 crore over a period of time.

The company said its cash balance stands at Rs 9,999 crore as of the quarter ending September 2024, as compared to Rs 8,108 crore in the June quarter. PTI MBI MBI MR