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“We’re going to get PAT profitability once earnings before interest, taxes, depreciation, and amortization before employee stock options cost is profitable, maybe in the next one or two quarters sequentially,” Madhur Deora, the company’s chief finance officer, said in an analyst call.
Paytm posted a loss of Rs 204 crore ($23.6 million) before exceptional items and tax for the third quarter ended Dec. 31, compared to a Rs 407 crore loss in the second quarter.
In the previous quarter, it reported its first-ever profit since listing due to a one-time gain from the sale of its ticketing business to food delivery company Zomato.
Paytm said its EBITDA before cost of employee stock options, a key metric for the company, was a negative 410 million rupees, compared to negative Rs 186 crore in the previous quarter.
The Reserve Bank of India had wound down Paytm’s banking unit in January 2024, citing persistent compliance issues, sparking worries about its digital payments business.
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“Paytm’s fundamentals are improving and it seems like the regulatory hurdles are largely behind us,” said Rahul Jain, vice president – research, at Dolat Capital. Revenue from operations rose 10.1% sequentially to Rs 1,828 crore. Its revenue from financial services, which includes its loan business, rose 34% and payment services business jumped 8%.
Deora said while Paytm’s lending partners are cautious on unsecured lending, the company expects steady growth in merchant loans going forward.
The company’s expenses fell 31% year-on-year and 1% sequentially, mainly due to lower marketing and employee-related costs.
Separately, Paytm increased a default loss guarantee to Rs 350 crore from 2.25 billion rupees to its lending partner SMFG India Credit for loans disbursed to merchants.
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