The company has set up three overseas step-down subsidiaries of Paytm Cloud Technologies in the United Arab Emirates, Saudi Arabia and Singapore
New Delhi: Fintech firm One97 Communications, which owns the Paytm brand, will primarily focus on financial services for the merchant ecosystem as part of its international expansion, a top company official said on Monday.
Paytm is looking for a foray into international markets and has set up three overseas step-down subsidiaries of Paytm Cloud Technologies in the United Arab Emirates, Saudi Arabia and Singapore.
“The intent here is to first go to the merchant side. Merchant side business model is a very long-term business model. Every economy and geography that I am meeting with senior executives either in the central bank or government love it because SME credit is missing everywhere. If you can solve for payment and solve for future-forward receivables that business model is a template in our opinion. Our primary plan will be that,” Paytm founder and CEO Vijay Shekhar said during the company’s earnings call for the December quarter of FY25.
Paytm for the quarter reported a narrowing of consolidated loss to Rs 208.5 crore mainly on account of reduction in expenses, mainly on payment processing charges and employee costs.
The company had posted a loss of Rs 221.7 crore in the same period a year ago, the company said.
Revenue from operations of Paytm declined by 35.8 per cent to Rs 1,827.8 crore during the reported quarter, from Rs 2,850.5 crore in the December 2024 quarter due to a dip in income from payments and financial services (34 per cent), payment services (40 per cent) and marketing services (48 per cent).
The revenue was, however, up 10 per cent on a quarter-on-quarter basis showing a sign of recovery in the company’s business.
The operational loss or the EBITDA before employee stock options of the company narrowed to Rs 41 crore on a quarter-on-quarter (QoQ) basis, from Rs 186 crore, primarily on account of reduction of non-sales employee costs.
Paytm chief financial officer Madhur Deora indicated that the company may become profitable in the next one or two quarters.
“The gap between EBITDA before ESOP and PAT is going down very meaningfully. I think in two or three quarters that gap will be basically zero. So just mathematically, we are going to get very close to we are going to get to PAT profitable when EBITDA before ESOP is profitable may be in the next one or two quarters. That is not the target but that is something we are marching towards,” Deora said.
He said that the company wants to be very efficient as an organization and the work that the company has done during the year should translate into operating leverage..
“While EBITDA breakeven and PAT (profit after tax) are milestones but that is obviously not the goal. The goal is to have double-digit EBITDA margin and then have that translate into a substantial amount of PAT,” Deora said.
The company has reduced non-sales employee costs, which include our business, technology, operations and support teams, by 11 per cent QoQ and 36 per cent YoY by leveraging artificial intelligence to improve productivity across businesses.
Paytm’s payment processing charges dropped by about 42 per cent to Rs 570 crore on a year-on-year basis.
The company’s monthly transacting user base reached 7.2 crore in December, after touching an all-time low of 6.8 crore in September 2024, following the impact on its business due to restrictions imposed on Paytm Payments Bank.
Cash balance of Paytm increased to Rs 12,850 crore mainly on account of stake sale in Japanese payments company PayPay to the Softbank Group for Rs 2,372 crore.
The company said that its contributing profit improved by 7 per cent on a quarter-on-quarter basis to Rs 959 crore.
Paytm excludes payment processing charges, promotional cashback and incentives expenses, connectivity and content fees, contest, ticketing expenses and logistics, deployment and collection cost from operational revenue to compute contributing profit.
The company has onboarded former information and broadcasting secretary Bimal Julka as a non-executive independent director.
