India's Paytm quarterly revenue up 42%, posts surprise operating profit
Indian fintech company Paytm reported a 41.6% rise in third-quarter revenue on Friday, helped by soaring loan growth, and said it achieved operating profitability three quarters ahead of guidance.
BENGALURU, Feb 3 (Reuters) - Indian fintech company Paytm reported a 41.6% rise in third-quarter revenue on Friday, helped by soaring loan growth, and said it achieved operating profitability three quarters ahead of guidance.
Paytm's parent, One 97 Communications Ltd, said revenue rose to 20.62 billion rupees in the October-December quarter from 14.56 billion rupees a year earlier.
The company posted its first-ever core profit before cost of employee stock-owning plans, or operating profit, of 310 million rupees compared with a core loss of 3.93 billion rupees a year earlier.
However, it continued to post a consolidated net loss that nearly halved to 3.92 billion rupees from a loss of 7.78 billion rupees a year earlier, the company said in an exchange filing.
The company's fast-growing financial services business — primarily buy-now-pay-later (BNPL), personal and merchant loans — accounted for 21.6% of the total revenue, more than trebling to 4.46 billion rupees from a year earlier.
Loan disbursement surged to 99.58 billion rupees, led by a four-fold jump in BNPL loans.
Revenue at Paytm's core payments services business - consumers and merchants using its eponymous app and merchants' device subscriptions - rose 43.2% to 15.99 billion rupees, accounting for 77.5% of the total.
The company's net payments margin, or payments revenue excluding processing costs, more than doubled to 4.59 billion rupees from a year earlier.
The SoftBank-backed firm has previously said it was aiming to turn profitable and become free cash flow positive in 2023. Operating profit margin improved to 1.5% from negative 27% from a year earlier.
(This story has been corrected to remove incorrect references to Paytm storing deposits and Paytm Payments Bank business looking to lend money)
Reporting by Nandan Mandayam and Urvi Dugar in Bengaluru; Editing by Krishna Chandra Eluri