Paytm On Right Path To Profitability, Free Cash Flows: Vijay Shekhar Sharma

Digital financial services firm One97 Communications, owner of Paytm brand, is on the right path to profitability with payments service becoming monetisable, founder and CEO Vijay Shekhar Sharma said on Monday.
     
While sharing Paytm performance matrix for the month of October, Sharma in a letter to shareholders said that the company is scaling up lending business which has huge demand in the country.
     
"One year ago, we made our way to the public markets. We are aware of the expectations that Paytm carries, and I assure you that we are on the right path to profitability and free cash flows. Our journey to build a scalable and profitable financial services business has just started," Sharma said.
     
The CEO said that the government incentives to UPI payments and merchants' adoption of Paytm devices and subscription products is making payments increasingly monetisable and profitable.
     
Sharma during the earnings call had said that Paytm's commerce business continues to operate with profitability as a target and "it has achieved profitability, complete operating full cost loaded profitability".
     
The company has posted widening of consolidated loss to Rs 571.5 crore in the September 2022 quarter from Rs 473.5 crore in a year-ago period.
     
The losses of the company had narrowed on a quarter-over-quarter basis.
     
"After our recent quarterly reports which showed strong operating leverage and reduction in EBITDA (a measure of earnings performance) losses, we are now excited about the next year of our journey, as we get close to EBITDA profitability and free cash flow generation," Sharma said.
     
He said that the company is now scaling up lending business which can bring financial inclusion to hundreds of millions of people in the country.
     
"Due to the huge demand for lending in our country, our low penetration and the compounding nature of our lending journey, we are extremely optimistic about the prospects of our lending business," Sharma said.
     
In October, Paytm reported loan disbursals at an annualised run rate of around Rs 37,000 crore.
     
The gross merchandise value, which is the total payments made to merchants from the company's app, grew by 42 per cent to Rs 1.18 lakh crore in October 2022 from Rs 83 lakh crore in October 2021.
     
The value of the loan disbursed by Paytm grew close to 5 times to Rs 3,056 crore in October 2022 from Rs 627 crore a year ago while volume grew by more than two-fold to 34 lakh loans from about 13 lakh on a year-over-year basis.
     
The monthly transacting user on its super app grew by 33 per cent year on year to 8.4 crore, according to the company's statement.