One 97 Communications, the parent company of the fintech firm Paytm, announced a 38 per cent increase in third-quarter revenue attributed to the strong performance of its payments business and robust loan growth in the financial services segment.
The consolidated revenue for the October-December quarter surged by 38 per cent, reaching Rs 2,851 crore compared to Rs 2,062 crore in the same period a year earlier.
In Q3 FY24, Paytm reported a significant improvement in its net payment margin, which increased by 63 per cent to Rs 748 crore year-on-year (YoY). Payment margins are influenced by Paytm's earnings from non-UPI instruments, including post-paid, EMI, cards, and subscription charges on devices sold to merchants.
As of December 2023, Paytm's merchant subscriptions reached 1.06 crore, indicating a YoY increase of 49 lakh.
Financial services performance
On December 1, Paytm made the decision to limit post-paid loans (excluding those below Rs 50,000), which had a minor or partial impact on overall financial services revenue. Despite this, financial services revenue stood at Rs 607 crore, reflecting a 36 per cent increase compared to the previous quarter.
"Net payment margin has gone up 63 per cent YoY to Rs 748 Cr due to increase in payment processing margin and an increase in merchant subscription revenues. Payment Processing Margin is in the 7-9 bps range (no UPI incentives booked during the quarter). The financial services take rate has improved QoQ due to a higher proportion of merchant loans and personal loan distribution (postpaid loans reduced QoQ as communicated in the December 6, 2023 update) and increasing revenue from the insurance distribution business. The average ticket size of merchant loans and personal loans will continue to increase as the proportion of high-ticket loans continues to increase." the company said in an exchange filing.
During the quarter, Paytm disbursed a total of Rs 15,535 crore in loans, slightly lower than the Rs 16,211 crore in the September quarter. However, this marked a substantial 63 per cent YoY increase. The average monthly transacting users of the company rose by 18 per cent year-on-year to 10 crore.
"Our Average Monthly Transacting Users (MTU) for Q3 FY 2024 grew by 18 per cent YoY to 10 crore as the Paytm app remains a preferred choice for customers with its offering to pay for various use cases through comprehensive payment instruments, such as UPI (including RuPay credit cards), wallets, cards, etc," the company added.
Shares of One 97 Communications ended Friday's trading session at Rs 766.20, 1.58 per cent higher than the previous close of Rs 754.30 on the NSE.
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