Paytm Q4 FY24 results: Loss widens to Rs 550 crore, warns of job cuts

Paytm Q4 FY 24 results: Shares of Paytm were trading at Rs 349 at 9:35 am on the BSE following the release of the company's quarter earnings report

This report has been updated.

Indian digital payments firm Paytm’s losses widened to Rs 549.6 crore for the quarter ending on March 31 (Q4) in financial year 2023-24 (FY24), the company reported on Wednesday. During the same period last year, net loss stood at Rs 219.8 crore. The fintech had reported a net loss of Rs 168.4 crore in the last quarter.
 

Consolidated revenue from operations fell 2.9 per cent year-on-year (Y-o-Y) to Rs 2,267.1 crore, from Rs 2,334.5 crore. Sequentially, revenue dropped 20.5 per cent from Rs 2,850.5 crore.
 

Paytm warned of job cuts, stating that it would trim non-core assets following the decline of sales in the fourth quarter, according to a report by Bloomberg. The fintech stated that the regulatory probe had significantly reduced the firm's business operations. 

 

"We expect near-term financial impact to our revenue and profitability, due to disruptions faced in our business in Q4," Vijay Shekhar Sharma, chairman and managing director, Paytm said in a letter to shareholders. 

"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," Sharma added.

Paytm’s financial results for the fourth quarter of FY24 were impacted by both temporary disruptions related to the Unified Payments Interface (UPI) transition and a more permanent disruption due to an embargo on Paytm Payments Bank (PPBL).

The company’s earnings before interest, taxes, depreciation, and amortisation (Ebitda) before employee stock ownership plans (ESOPs) fell sharply to Rs 103 crore in the March quarter, compared to Rs 234 crore in the same quarter the previous year. Excluding UPI incentives, the Ebitda before ESOPs was Rs 185 crore.

Despite these challenges, Paytm’s payments business revenue grew by 7 per cent Y-o-Y to Rs 1,568 crore in the fourth quarter. However, on a quarter-on-quarter basis, there was a 9 per cent decline. The company attributed this drop to the disruption of PPBL products, a temporary conservative approach taken for certain businesses, and disruptions in operating metrics.

Paytm flagged that while the company experienced some financial setbacks in Q4 due to these disruptions, the full impact will be more evident in the first quarter of FY25.

The company highlighted that Paytm Payments Bank’s products, such as the Paytm wallet and FASTag, were distributed by Paytm. Due to the current embargo on these products, the company anticipates an annualised direct impact on Ebitda of approximately Rs 500 crore in a steady state.

For the full financial year 2023-24, the company's consolidated net loss narrowed to Rs 1,422.4 crore, from Rs 1,776.5 crore in FY23. Paytm's revenue from operations witnessed a 24.9 per cent growth at Rs 9,977.8 crore Y-o-Y from Rs 7,990.3 crore.

In an exchange filing, Sharma said, “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 a higher focus on compliance, in letter and in spirit.”

Shares of Paytm were trading at Rs 349 at 9:35 am on the BSE following the release of the company's quarter earnings report.