Paytm Shares Surge: What the Experts Are Saying About Paytm's Q1FY23 Results

Here is what you need to know about the numbers. The company’s net revenue for the quarter increased by 174% y-o-y and 79% q-o-q to Rs 562 crore, driven by a 169% increase in transaction volumes on the back of promotional activities during the festive period. Other key metrics - ARPU and CTR - also improved sequentially. However, there was a slight decrease in monthly active users (MAU). The company has not provided details of its operating cash flows or profitability in this earnings release.

Paytm Financial Services

The key numbers are - Loan book of Rs 450 crore, 4.5 lakh customers, and a disbursal of Rs 300 crore. This is a very small number considering the size of the market but significant growth is expected in the coming quarters. Paytm’s lending business has been slow to take off due to regulatory uncertainty. The company had applied for a payments bank licence but has not applied for a full-fledged financial services licence. As a part of the regulatory framework for fintech companies, fintech companies cannot provide any kind of credit. This has forced companies like Paytm, PhonePe, and Capital First to either wait for the regulatory framework to change or find a workaround. Paytm is working towards finding a workaround, but has not disclosed any plans to date.

Other Numbers

The Average revenue per user (ARPU) - Rs 389 - Increasing sequentially, but down y-o-y. Within this, there is a significant jump in GST revenue. This may also reflect an increase in overall spending on the platform. Gross Merchandise Value (GMV) - Rs 16,907 crore - Down y-o-y, but up sequentially. Cumulative transactions - 1,112 million - Up y-o-y and sequentially.

Q2 Expectations

Paytm has been one of the frontrunners in the online advertising and ecommerce space, and has aggressively promoted its platform on all digital media. With a large number of people expected to shop during the festival season, the company could see a significant jump in its GMV and revenue numbers. The number of Paytm wallets is expected to increase significantly due to the company’s aggressive marketing campaigns. This will lead to higher volumes of transactions and overall revenue for the company. We expect Paytm to report a significant jump in its net revenue during this quarter.

Takeaways

Paytm’s growth is being driven by strong customer acquisition, with active user numbers rising sequentially. The company’s revenue numbers are up y-o-y and sequentially. The company’s operating cash flows or profitability details in this earnings release were not provided.

Paytm Wallet

We’re very excited about the Paytm Wallet, which is a very convenient and easy way to transact, and we’re also very excited about our payments bank, which launched on a Pan-India basis on the 23rd of July. We’ve seen significant growth in Wallet, both in terms of traffic, frequency of transactions and also the average transaction value. We’ve also seen significant growth in the ecommerce marketplace on the Paytm platform. We’re very excited about the growth that we’ve seen in Paytm Money, our financial services business.

Conclusion

Overall, the numbers appear to be in line with expectations. We expect Paytm’s revenue numbers to increase significantly during the July-September quarter. As far as the company’s financials are concerned, the company has not disclosed any details of its operating cash flows or profitability in this earnings release.