Paytm's Q4FY24 net loss rises to Rs 550 crore, revenue down 2.9% YoY to Rs 2,267.10 crore

Vijay Shekhar Sharma-led Paytm announced its financial results for the fourth quarter of the fiscal year ending March 2024 (Q4 FY24) on Wednesday. 

The fintech company has reported a slight 3% decline in revenue from operations, which totalled Rs 2,267 crore, down from Rs 2,334 crore in Q4FY23.

This decline occurred despite the termination of Paytm Payments Bank Limited (PPBL) services and was primarily influenced by macroeconomic challenges, competitive pressures, and regulatory changes.

Key financial metrics for FY24

For the full fiscal year 2024, Paytm’s revenue from operations increased significantly by 25%, reaching Rs 9,978 crore, compared to Rs 7,990 crore in FY23.

This growth was driven by an increase in gross merchandise value (GMV), expansion in device installations, and a broader range of financial services.

The company’s GMV grew by 39% YoY to Rs 18.3 lakh crore, and merchant subscriptions rose to 1.07 crore by March 2024, marking an increase of 39 lakh from the previous year.

Regulatory challenges

The Reserve Bank of India (RBI) had imposed restrictions on Paytm in January due to concerns over compliance with regulatory norms. Although the RBI later granted brief relaxations, these restrictions impacted Paytm’s revenue.

Payment services revenue, for instance, grew 7% YoY to Rs 1,568 crore in Q4 FY24 from Rs 1,467 crore in Q4 FY23 but decreased by 9% quarter-on-quarter due to disruptions in PPBL services. Despite these challenges, Paytm managed to improve its operational efficiency and profitability.

Profitability and cost management measures

Paytm reported a contribution margin of 57% in Q4 FY24, including UPI incentives, and recorded an EBITDA before ESOP costs of Rs 103 crore.

However, the company's net losses increased to Rs 550 crore in Q4 FY24 due to a combination of factors, including a loss of Rs 227 crore related to PPBL and non-cash ESOP costs amounting to Rs 326 crore.

To counter these challenges, Paytm optimized its cost structure by leveraging AI capabilities and reducing employee and marketing costs, which are expected to save around Rs 400-500 crore annually.

Future expectations and strategic plans

Looking ahead, Paytm anticipates an incremental EBITDA impact of Rs 100-150 crore in Q1 FY25 due to the temporary disruptions experienced in February and March.

The company expects to recover from these impacts by Q2 FY25, with stabilization or growth in consumer and merchant base metrics from April/May.

Additionally, Paytm is in discussions with the National Payments Corporation of India (NPCI) to confirm signing up new UPI consumers for its TPAP App. The company also plans to reinvest in marketing and user growth areas in the coming financial year to drive further expansion.