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    Q4 PayTM Results Poor, Profit Declined by 15% and Revenue By 20%

    Fintech giant PayTM reported a poor showing for the last quarter of FY24, with operating revenue dipping to 2267 crore in March 2024 from a high-point in December 2023 of 2850 crore, a 20% QoQ. Similarly, the contribution profit had a 15% QoQ decline to reach 1288 crore in March 2024 from 1520 crore in December 2023. The EBITDA before ESOPs also declined from 219 crore in December 2023 to 103 crore in March 2024.

    Madhur Deora, Group CFO, attributed it to the “transitions the company needed to do” from February 1. Monthly Transacting Users (MTU) were also down by 24% in April as compared to January, from 10.4 cr to 8 cr.

    “April was the worst, and May has now started to stabilize, at least on a daily transacting user basis, and we expect this to stay stable. MTU growth will come only when we get the new TPAP user onboarding commencement from NPCI,” said Madhur Deora, Group CFO.

    The company’s active merchant users also declined by 10%, in this quarter. Deora said that this was due to higher attrition in February and March, and also because the company wasn’t onboarding new merchants.

    The revenue from financial services halved from 607 crores in the last quarter to 304 crores in this one while the value of loans disbursed decreased from 15,535 to 5,776 crores in the same time period. 

    Financial Impact of Regulatory Action:

    In February this year, the RBI barred PayTM Payments Bank Limited (PPBL) from carrying out a range of activities, including:

    • No further deposits, credit transactions, or top-ups 
    • No fund transfers, Bharath Bill Pay, and UPI facility after February 29
    • The nodal accounts of One97 Communications Limited and Paytm Payments Services Limited are to be terminated
    • Settlement of all pipeline transactions and nodal account

    However, customers were allowed to use or withdraw their existing balances. The actions were taken due to persistent non-compliance and continued material supervisory concerns in the bank, warranting the above supervisory action, RBI stated.

    Speaking on the financial impact of these regulatory actions, Deora said, “Last quarter, there were obviously a bunch of moving parts, and some of them affected us earlier in the quarter, and some of them affected us later in the quarter. So the full EBITDA impact, effectively the full quarter impact, will only be felt in Q1. And we do start to expect meaningful recovery from that in Q2, because we mentioned a number of things are temporary and we can restart.”

    He divided the losses into three parts:

    • The company stated that on account of the “embargo” on PPBL products, there was an annualised EBITDA decrease of about 500 crores. Deora also stated that most of the impact will be in the first quarter of FY25.
    • The company is expecting that the decrease in MTUs will cause a financial impact of 100 to 150 crores.
    • The company had also paused certain products offered after the regulatory action, causing an estimated impact of 75 to 100 crores.

    Yearly Figures

    Despite the grim results in the last quarter, PayTM’s annual results are quite positive. Their operating revenue went up to reach 9,978 crores in FY24 from 7,990 crores last year. The contribution profit increased from 3,900 crores to 5,538 crores, with an increase in the margin by 7%. This was also the company’s first year with a positive EBITDA before ESOP at 559 crores.

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