Paytm - One97 Communications Share Price Today

Internet Software & Services company One97 Communications announced FY24 & Q4FY24 results:

FY24 Financial Highlights:

• Paytm reported revenue of Rs 9,978 crore, 25% growth
• Contribution profit up 42% to Rs 5,538 crore (margin of 56%, up 7 percentage point)
• EBITDA before ESOP of Rs 559 crore (up Rs 734 crore), EBITDA margin at 6% (up 8 percentage point)

Payment Business:

• Revenue from Payment services up 26% to Rs 6,235 crore
• Net payment margin was up 50% to Rs 2,955 crore; GMV up 39% to Rs 18.3 Lakh crore
• Merchant paying subscription for devices has reached 1.07 crore as of March 2024, an increase of 39 Lakh

Financial Services Business:

• Revenue from financial services and others up 30% to Rs 2,004 crore
• Value of loans distributed was up 48% to Rs 52,390 crore

Q4FY24 Financial Highlights:

• In Q4FY24, payments revenue grew by 7% YoY to Rs 1,568 crore, but was down by 9% QoQ
• Payment Processing Margin: In Q4FY24, GMV grew 30% YoY to Rs 4.7 Lakh crore.
• As of March 2024, merchant subscriptions were 1.07 crore, increasing 39 Lakh YoY
• In Q4FY24, revenue from financial services and others declined 36% YoY to Rs 304 crore
• The value of Merchant Loans distributed declined by 28% YoY to Rs 1,671 crore as it was paused in February and has seen good latent demand once it was resumed in March end.
• The value of Personal Loans distributed declined 1% YoY to Rs 3,408 crore as the distribution only loans continued to scale well during the quarter, and is our focus going forward.
• Q4FY24 contribution profit of Rs 1,288 crore remained flat YoY. Excluding UPI incentives, contribution profit declined 9% YoY. Contribution margin improved to 57% from 55% a year ago, while excluding UPI incentives, the contribution margin was at 51%, flat YoY.
• For Q4FY24, Indirect Expenses (excluding ESOP cost) has increased 13% YoY to Rs 1,186 crore.
• In Q4FY24, our EBITDA before ESOP was Rs 103 crore as compared to Rs 234 crore in Q4FY23.
• Excluding the UPI incentives, our EBITDA before ESOP was (Rs 185 crore) as compared to Rs 52 crore in Q4FY23.
• Excluding UPI incentives, EBITDA before ESOP margin, stands at (9%) for Q4FY24, versus 2% in Q4FY23.
• Our cash balance is Rs 8,650 crore as of quarter ending March 2024, as compared to Rs 8,901 crore as of quarter ending December 2023.

Vijay Shekhar Sharma, MD of the company, said, "FY 2024 has been a landmark year for the company as we achieved our first full year of EBITDA before ESOP profitability (since IPO) of Rs 559 crore. We demonstrated strong revenue momentum (up 25%) and continued our disciplined focus on profitability (EBITDA before ESOP margin up by 8%), in spite of regulatory action on our associate entity, Paytm Payment Bank Ltd. (PPBL).

I am happy to share that we have successfully transitioned our core payment business from PPBL to other partner banks. This move de-risks our business model and also opens up new opportunities for long-term monetization, given our platform’s strength around customer and merchant engagement. It has been possible in such a short period of time with extensive support from the Regulator, NPCI, Bank partners and our committed team mates. The unwavering commitment of our government and regulator to support innovation and financial inclusion, keeps us true to our mission and committed to our long-term sustainable growth opportunity.

We expect near-term financial impact to our revenue and profitability, due to disruptions faced in our business in Q4. This includes steady state impact due to pausing of PPBL wallet. We had also paused a few other payments and loan products to our customers during the last quarter, and I am happy to share that many such products have been restarted or in the process of starting soon.

Led by capabilities of AI and focussing on core business, we are also working on significant cost efficiencies including leaner organization structure. Our ongoing experiments and learnings in AI promise to revolutionize customer and merchant care for the financial industry, while also unlocking new avenues for revenue generation and cost savings. We anticipate tangible results from these initiatives in the coming quarters, further bolstering our competitive advantage in the market.

We are fully committed towards building our business according to regulatory compliances and prudent operations risk policies.

We are also taking various steps to strengthen the governance framework across our group entities (especially regulated entities) by appointing subject matter experts as advisors or independent directors, reviewing various processes etc. I am ensuring that we have greater regulatory engagement and have higher focus on compliance, in letter and in spirit.

I am proud of the talent we have in our company, the culture of resilience and entrepreneurship. We remain more committed than ever towards growth, profitability, and maintaining robust governance and compliance."

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