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Fintech major Paytm reports Rs 208 crore loss in Q3FY25, revenue jumps to Rs 1,828 crore

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Sumit Vishwakarma
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Paytm q3fy25

Paytm CEO Vijay Shekhar Sharma

Vijay Shekhar Sharma-led One 97 Communications, the parent company of Paytm, today announced its financial results for the third quarter of fiscal year 2025 (Q3FY25), reporting a notable upswing in revenue and a narrower net loss compared to the previous quarter. 

While the company’s year-on-year numbers show a decline in revenue, Paytm remains optimistic about continued growth in both its payments services and financial services segments.

Revenue and profitability 

Paytm recorded an operating revenue of Rs 1,828 crore for the October-December 2024 quarter, marking a 10% increase from the previous quarter. However, it declined 36% from Rs 2,850.5 crore in the same period last fiscal year. 

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The company’s net loss stood at Rs 208.3 crore, improving both quarter on quarter and compared with Rs 219.8 crore in the year-ago period.

Paytm attributed the quarter-on-quarter revenue growth to a rise in Gross Merchandise Value (GMV), healthy subscription revenues, and higher income from distributing financial services. 

The company’s profit after tax improved by Rs 208 crore over the previous quarter, signaling continued progress toward profitability.

Payments business expansion 

Payment services contributed Rs 1,059 crore in revenue during the quarter, up 8% from the previous three months. This growth was propelled by a 13% increase in GMV to Rs 5 lakh crore. The merchant subscription base for Paytm’s devices expanded to 1.17 crore, with around 5 lakh additions during the quarter.

The company noted that the National Payments Corporation of India (NPCI) granted it approval to onboard new UPI users, helping monthly transacting users climb to 7.2 crore in December from 6.8 crore in September.

Paytm says it will continue to develop innovative products, along with disciplined brand and performance marketing, to drive expansion in its consumer base.

Growth in financial services 

Revenue from financial services surged 34% quarter on quarter to Rs 502 crore. This jump was driven by a higher share of merchant loans, better collection efficiencies, and strong revenue from Paytm’s Default Loss Guarantee (DLG) portfolio. 

“We continue to see increased interest from lenders to partner using the DLG model for both Merchant and Personal Loans, which will help to increase disbursements with the existing partners and expand partnership with new lenders,” said Paytm.

The company has also partnered with more financial institutions, which it expects will further strengthen its lending and collection capabilities.

Paytm disbursed Rs 3,831 crore worth of merchant loans in the quarter, compared with Rs 3,303 crore in the previous quarter. About half of these loans went to repeat borrowers. 

Personal loans totalling Rs 1,746 crore were also disbursed in a distribution-only model, though Paytm has resumed a distribution-and-collection model for a select group of new and repeat customers with a record of strong asset quality.

Cost efficiency and future outlook 

Paytm reported that its cash balance stood at Rs 12,850 crore as of December 2024, an increase of Rs 2,851 Cr QoQ, largely on account of the conclusion of the PayPay stake sale and improvement in working capital.

Indirect expenses (excluding ESOP costs) declined 7% quarter on quarter and 23% year on year, reflecting the company’s ongoing cost-management efforts.

Looking ahead, Paytm plans to introduce more innovative devices and solutions to meet the needs of diverse merchants, particularly in Tier-2 and Tier-3 cities where it sees strong potential for further growth. 

“To further strengthen our market leadership, we are committed to launching innovative, first-of-its-kind payment devices and solutions tailored to diverse merchant needs. Our extensive distribution and service network positions us well to capitalize on this growing market. We believe that tier-2 and tier-3 cities offer significant penetration opportunities and we will further expand our distribution network to onboard more merchants from these markets,” said the company.

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