Revenue from operations for the December quarter increased 38% to Rs 2,850.5 crore, which the Noida-based financial services company attributed to accelerated growth in gross merchandise value, payments device additions and an expansion in the financial services business.
The timing of festive seasons also helped boost the revenue, the company said.
In the ongoing fiscal 2024, the festive season online sales were primarily in the third quarter, whereas in the previous financial year, those were largely in the second quarter.
As part of its exchange filings on Friday, Paytm also said it will incorporate one or more subsidiaries in Gujarat International Finance Tec-City (GIFT City) and deploy a development centre to provide artificial intelligence-led cross-border remittance systems.
Earlier this month, the company had announced an investment of Rs 100 crore in GIFT City and its focus on cross-border remittances.
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Loan disbursals slow downLast month, Paytm decided to scale down its buy-now-pay-later (BNPL) product, Paytm Postpaid, and take a conservative approach towards small-ticket loans going forward.
As a result, the total value of Paytm Postpaid loans distributed fell 17% sequentially to Rs 7,496 crore in the December quarter.
The slowdown in this segment had an effect on Paytm’s overall loan book as well, with the value of loans disbursed on the platform falling sequentially to Rs 15,535 crore in the December-quarter.
“The amount is 4% lower from last quarter as we have and will continue to calibrate distribution of Postpaid loans on the back of the macro uncertainty and regulatory guidance which was communicated on December 6, 2023. According to feedback from our lending partners, asset quality of the loans distributed from our platform continues to remain steady,” the company said as part of the earnings announcement.
Paytm currently provides merchant, personal and BNPL loans through partners. Total loan value grew 56% from a year earlier.
Paytm works with the likes of Hero Fincorp, Aditya Birla Capital, Piramal Finance and Clix Capital as lenders for its consumer and merchant credit business.
Large-ticket loans
As Paytm slows down its focus on sub-Rs 50,000 credit, it is looking to scale up large-ticket loans on its platform.
“We see a large opportunity in the high-ticket loan business, with over 20 million users already white-listed. We piloted this product in Q2 FY 2024 and have scaled up this quarter as we distributed Rs 490 crore of loans. We expect it to accelerate further in coming quarters, as we onboard more lending partners,” the company said.
Paytm is also looking to add three to four lending partners for its high-ticket loans vertical by the first quarter of FY25.
This move assumes significance at a time when the Reserve Bank of India has instructed banks and NBFCs to slow down on their unsecured lending business and increase risk weightage on such loans.
With increase in risk weight, lenders have chosen to cut their losses and reduce coverage on small-ticket loans further.
AI to cut cost
On Friday, the company said it is accelerating the adoption of AI to increase operating leverage across different functions especially in marketing costs.
“So far AI has delivered more than what we expected, and we expect our AI first approach will allow us to drive operating leverage across various functions, including business and operations. Additionally, we see operating leverage in marketing costs even as we continue to grow our users and merchants,” said the company.
The company also added that it expects “its indirect cost to grow at a slower pace in the coming quarters” as it leverages AI among other factors.
Also read | Paytm lays off over 1,000 across units amid cost-cutting