Paytm has unveiled its financial results for fiscal year 2024, showcasing a year marked by a mix of growth and challenges. Despite a challenging fourth quarter, the company’s performance in the first three quarters helped it close the year on a high note. Paytm’s revenue declined 3% YoY and 20% QoQ during Q4 FY24, amounting to ₹2,267 crore. This decline was largely expected due to the Reserve Bank of India’s (RBI) ban impacting Paytm Payments Bank Limited (PPBL).
However, the full year tells a different story. The fintech giant reported an impressive 25% YoY growth in its operating revenue, amounting to ₹9,978 crore in FY24. This impressive growth was driven by several factors, including an increase in Gross Merchandise Value (GMV), the addition of new devices, and expansion in the payment and financial services distribution business.
Paytm’s losses widened to ₹550 crore in Q4 FY24, a notable increase from ₹168 crore in Q4 FY23. However, this increase was tempered by an impairment charge of ₹227 crore related to the carrying value of the company’s investment in PPBL. For the full fiscal year, Vijay Shekhar Sharma-led Paytm reported a net loss of ₹1,423 crore in FY24, an improvement from the ₹1,777 crore loss recorded during the previous year.
Interestingly, a key highlight of Paytm’s FY24 results was its performance in terms of EBITDA before ESOP. FY24 has been a milestone year for Paytm as it became EBITDA positive before ESOP for a full year since its IPO. The company reported an EBITDA before ESOP of ₹559 crore, a significant turnaround from the – ₹176 crore EBITDA recorded in FY23. This achievement underscores Paytm’s ongoing efforts to improve its financial health and operational efficiency.
Key Highlights: Paytm Q4 FY24 Results
Key segments of Paytm’s business displayed mixed results during FY24.
- Payments Revenue: Grew 7% YoY to ₹1,568 crore but was down 9% QoQ in Q4 2024. However, during the full year, Paytm generated ₹6,235 crore in revenue from its payment services, an increase of 26% YoY.
- Financial Services and Others Revenue: Declined 36% YoY and 50% QoQ to ₹304 Cr in the fourth quarter of fiscal 2024, due to lower loan distribution. However, taking a broader view, Paytm’s revenue from financial services and others increased an impressive 30% to ₹2,004 crore.
- Marketing Services Revenue: Increased just 1% YoY to ₹395 crore in Q4 FY24 but declined a notable 23% QoQ. However, looking at the full year, Paytm witnessed a strong 14% YoY growth in its marketing services revenue, amounting to ₹1,520 crore.
Paytm Loan Business: A Segment Under Pressure
Paytm’s loan business faced significant challenges in Q4 FY24. The number of loans distributed dropped a massive 86% YoY to 0.16 crore. The value of these distributed loans also plummeted a notable 54% YoY and 63% QoQ to ₹5,799 crore.
However, despite the challenges in Q4, Paytm’s loan business demonstrated resilience for the full fiscal year. The value of loans distributed through Paytm surged an impressive 48% YoY to ₹52,390 crore.
Paytm’s merchant loans also saw a steep decline, with the number dropping 43% YoY and 56% QoQ to just 0.8 lakh during the fourth quarter of fiscal 2024. The value of these kinds of loans decreased 28% YoY and 53% QoQ to ₹1,671 crore during the period. This decline was due to a pause in February; however, there was a notable latent demand once it resumed towards the end of March.
Similarly, the number of personal loans distributed stood at 2.4 lakh during the March quarter of fiscal 2024, down 11% YoY and 4% QoQ. As a result, the total value of these loans offered by Paytm also fell, albeit a minimal 1% YoY, but a notable 24% QoQ to ₹3,408 crore during the period.
The value of Paytm’s postpaid loan distribution declined drastically by 90% YoY in Q4 FY24, to just ₹720 crore. This sharp decrease was influenced by the company’s decision to reduce Postpaid loan distribution in December 2023, which was paused entirely in February 2024.
Paytm’s Monthly Transacting Users (MTU) declined consistently in each month of 2024: 10.4 Cr in January, 9.6 Cr in February, 8.9 Cr in March, and 8.0 Cr in April. This downward trend can be attributed to the pause in new user sign-ups for the TPAP app and voluntary user attrition following the RBI ban on Paytm Payment Bank Limited (PPBL). It is important to note that Paytm‘s UPI market share also plummeted to 8.40% in April 2024, down from the 11.8% it held in January, just before regulatory actions were enforced.
However, in May, the fintech company observed stabilization in transacting user count on a month-on-month basis. Paytm has resumed user campaigns and marketing efforts, resulting in improvements in both retention and reactivation.
In conclusion, despite the double-digit declines in revenues across all segments during the fourth quarter, One97 Communications, the parent company of Paytm, demonstrated resilience throughout fiscal year 2024. However, the significant decline in its lending business poses a major challenge for the fintech company. It would be interesting to see how CEO Vijay Shekhar Sharma navigates these ongoing challenges within Paytm and strategizes to overcome them.
