Alongside its quarterly results, the Noida-based company said its board had rejected a proposal to issue bonus shares, choosing instead to prioritise long-term growth and profitability.
In a stock exchange filing, Paytm said: “After evaluating the proposal from the perspective of long-term shareholder value and due deliberation, the board was of the view that the company should continue to focus on further compounding growth and profitability for shareholder value creation. Accordingly, the board decided not to proceed with the said proposal at this time.”
Had it been approved, this would have been Paytm’s first bonus share issue since its November 2021 listing. In 2022, the company completed an Rs 850-crore open market share buyback.
Paytm’s shares closed nearly flat at Rs 1,348 on the BSE.
The company also announced the appointment of former Google executive Amit Singhal as an independent director on its board.
Operating performance
Paytm’s earnings before interest, taxes, depreciation and amortisation (Ebitda) rose 182% year-on-year to Rs 203 crore during the quarter.
“AI applications across our businesses are accelerating in-built operating leverage. Revenue growth is significantly faster than indirect expense growth, supporting further Ebitda margin expansion,” the company said in a release.
The company said it now has “even better visibility” on achieving its previously stated medium-term Ebitda margin target of 15-20% over the next two to three years.
It expects its four growth engines—merchant payments, merchant loan distribution, consumer payments and consumer monetisation—to continue driving expansion, while AI helps revenue grow faster than indirect costs.
Paytm also said payment processing margins are expected to remain structurally above four basis points over the medium term. It expects Paytm Postpaid to become a meaningful contributor to revenue and Ebitda from FY28 onwards.
Despite dropping the bonus share proposal, the company said it would remain disciplined in deploying its Rs 13,529-crore cash balance.
“We do have a large cash balance and want to maintain that position of being very well capitalised. We are working on attractive organic and inorganic opportunities, and are seeing early signs through MTF (margin trading facility), among others, for partial deployment of this capital with high return on investment,” the company said.
Paytm also said it is investing Rs 100 crore in its stockbroking subsidiary, Paytm Money.
“As we have said earlier, we will not deploy capital simply because we have it; the optionality of cash is itself worth something in the present environment, combined with strong capital discipline,” it added.