Paytm Operating Performance Update for the month of August 2023

Sustained growth in payments and loan distribution business: Leadership in offline payments strengthens with 87 Lakh devices deployed; value of loans distributed through the Paytm platform at Rs 5,517 Cr ($667 million) in the month of August 2023.

- Average monthly transacting users (MTU) stood at 9.4 crore for quarter to date (average for July & August 2023) up 20% y-o-y, reflecting continued expansion of our customer base
BR>- Our leadership in payment monetization continues with number of merchants paying subscription for payment devices at 87 lakh as of August 2023, an increase of 42 lakh devices y-o-y

- Merchant Payment Volumes (GMV) for quarter to date (for July & August) stood at Rs 3.0 Lakh Cr ($36.3 billion), y-o-y growth of 43%

- Our loan distribution business (in partnership with our lender partners) continues to gain scale with disbursements of Rs 10,710 Cr ($1.3 billion, y-o-y growth of 137%) and 88 lakh loans (y-o-y growth of 47%) disbursed in quarter to date (for July & August 2023) through the Paytm platform

Robust growth in MTU: Growing consumer engagement on the Paytm App with the average MTU for the quarter to date (for July & August) growing 20% y-o-y to 9.4 Crore.

New milestone in offline payments leadership: We continue to strengthen our leadership in offline payments, with 87 lakh merchants now paying subscription for payment devices, an increase of 42 lakh devices in the past 12 months and 5 lakh devices in the month of August. With our subscription as a service model, the strong adoption of devices drives subscription revenues and higher payment volumes, while increasing the funnel for our merchant loan distribution.

Sustained growth in total merchant payments volume: The total merchant GMV processed through our platform for quarter to date (for Jul & Aug) was Rs 3.0 Lakh Cr ($36.3 billion), growing 43% y-o-y. We continue to see increase in GMV of non-UPI instruments like EMI and cards. Growth in payments volumes drives profitability for us, through net payments margin and / or from direct upsell potential.

Loan distribution business continues to scale: Our loan distribution business (in partnership with large lenders) continues to witness healthy growth with total loans distributed through our platform for the quarter to date (for Jul & Aug) growing 137% yo-y to Rs 10,710 Cr ($1.3 billion).

Over the past several quarters, we have talked about our plans to calibrate growth to further tighten credit quality of loans distributed on our platform. We have been able to successfully demonstrate improving credit quality for Paytm Postpaid, where the ECL has reduced to a range of 0.65% - 0.85% from a range of 0.75% - 1.00% in Q4 FY 2023.

We remain focused on the portfolio performance of our lending partners, and growth may be subdued until the industry outlook improves.

High quality outcomes for our partners enables us to expand our lending partnerships. We currently have 8 lending partners (including for credit card distribution) and we aim to onboard 3-4 partners in FY 2024.

Source : Equity Bulls

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