By Nishit Navin and Siddhi Nayak
(Reuters) – India’s Paytm on Monday said it was aiming to become profitable in one-to-two quarters, after it reported a narrower sequential third-quarter adjusted loss as its payments business recovered from the winding down of its payments bank unit.
“We’re going to get PAT profitability once earnings before interest, taxes, depreciation, and amortization before employee stock options cost is profitable, maybe in the next one or two quarters sequentially,” Madhur Deora, the company’s chief finance officer, said in an analyst call.
Paytm posted a loss of 2.04 billion rupees ($23.6 million) before exceptional items and tax for the third quarter ended Dec. 31, compared to a 4.07-billion-rupee loss in the second quarter.
In the previous quarter, it reported its first-ever profit since listing due to a one-time gain from the sale of its ticketing business to food delivery company Zomato.
Paytm said its EBITDA before cost of employee stock options, a key metric for the company, was a negative 410 million rupees, compared to negative 1.86 billion rupees in the previous quarter.
The Reserve Bank of India had wound down Paytm’s banking unit in January 2024, citing persistent compliance issues, sparking worries about its digital payments business.
“Paytm’s fundamentals are improving and it seems like the regulatory hurdles are largely behind us,” said Rahul Jain, vice president – research, at Dolat Capital.
Revenue from operations rose 10.1% sequentially to 18.28 billion rupees. Its revenue from financial services, which includes its loan business, rose 34% and payment services business jumped 8%.
Deora said while Paytm’s lending partners are cautious on unsecured lending, the company expects steady growth in merchant loans going forward.
The company’s expenses fell 31% year-on-year and 1% sequentially, mainly due to lower marketing and employee-related costs.
Separately, Paytm increased a default loss guarantee to 3.5 billion rupees from 2.25 billion rupees to its lending partner SMFG India Credit for loans disbursed to merchants.
($1 = 86.4750 Indian rupees)
(Reporting by Nishit Navin and Sethuraman NR in Bengaluru and Siddhi Nayak in Mumbai; Editing by Savio D’Souza and Varun H K)
