TheNFAPost Podcast

New Delhi, NFAPost: India’s leading digital ecosystem for consumers and merchants (1) Paytm announced its second quarter earnings report. The digital payments and financial services platform saw its revenue from operations grow by 64% Y-o-Y to Rs 10.9 billion in Q2 FY 2022, driven by 52% growth in non-UPI payment volumes (GMV) and more than 3 times growth in financial services and other revenue.

The company’s contribution profit grew to ₹2.6 billion in Q2 FY 2022, year-on-year increase of 592%. The contribution margin jumped to 24.0% of revenue from 5.7% the previous year.

Paytm posted an ​​improved Adjusted EBITDA margin to (39%) of revenues in Q2 FY 2022 (₹4,255 million), from (64%) of revenues Q2 FY 2021 (₹4,267 million), along with increased investments in technology and merchant base expansion.

In a statement, the company’s management said the gwoth of non-UPI GMV has driven continued payments revenue growth, and Paytm’s UPI-led payment volume growth is translating to a significant ramp up of its financial services offering.

“We are driving digital payments and financial services penetration and widespread adoption across India. Paytm has seen a strong second quarter of FY22, which is a testimony to the strong two-sided ecosystem of consumers and merchants that we have built,” states the company release.

Paytm also made it clear that the company has maintained the growth momentum in our payments services business, expanded its financial services business aggressively and are on its way to pre-Covid volumes for Commerce and Cloud services.

Paytm’s Gross Merchandise Value (GMV) growth was driven by active user engagement & adoption across businesses. The company’s GMV for Q2 FY 2022 was ₹1,956 billion, up by 107% Y-o-Y and the growth momentum continued in October 2021, where the GMV at ₹832 billion was up 131% Y-o-Y.

The company’s average Monthly Transacting Users (“MTU”) in Q2 FY 2022 is up by 33% Y-o-Y to 57.4 million and the trajectory has continued in October 2021 with 63 million MTUs, growth of 35% Y-o-Y compared to 47 million MTUs in October 2020. The Monthly GMV per Transacting User for Q2 FY 2022 grew 55% Y-o-Y to ₹11,369

Paytm, which has been focussed on growing its financial services platform, saw its revenue from payments and financial services grew 69% Y-o-Y to ₹8,426 million while Commerce
and Cloud Services revenue grew by 47% Y-o-Y to 2,438 million.

The company’s lending sector saw a huge boost as the number of loans disbursed grew 714% year-on-year to over 2.8 million in Q2 FY 2022. The lending business continued to show strong growth as a result of the rapid scale-up of all of the company’s lending products, including Postpaid (Buy-Now-Pay-Later), consumer loans and merchant loans.

The company’s financial institution partners disbursed around 1.3 million loans in October 2021, a 472% increase in numbers of loans disbursed Y-o-Y and aggregating to a total disbursal of ₹6,270 million implying a 418% increase in value of loans disbursed Y-o-Y.

Paytm’s merchant base grew to 23 million in Q2 FY 2022, up from 18.5 million in Q2 FY 2021. The devices deployed base grew to 1.3 million in Q2 FY 2022 from 0.3 million as of Q2 FY 2021. We continue to witness strong adoption of our devices amongst merchant partners as our deployed base further increased to approximately 1.4 million as of October 2021.

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