Indian digital payments firm Paytm reported a 39 per cent rise in quarterly revenue, helped by soaring demand for loans.
One 97 Communications Ltd, parent of India's no. 2 digital payments app by market share, reported late Friday that revenue rose 39 per cent year-on-year to Rs 2,342 crore ($285.68 million) in the three-months ending June 30, from Rs 1,688 crore in the year-earlier period.
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It reported an operating profit for a third straight quarter, despite a rise in employee-related expenses and a lack of government incentives. Operating profit came in at Rs 84 crore, compared with an operating loss of Rs 275 crore, while the net loss narrowed to Rs 357 crore.
That was lower than the previous quarter's Rs 234 crore worth operating profit, which included a government incentive to promote payments via the Unified Payments Interface (UPI) digital payments system.
Paytm defines operating profit as core profit before cost of employee stock-owning plans. It first reported an operating profit for the final three months of 2022 – nine months ahead of schedule.
Quarterly expenses were up 15.9 per cent at Rs 2,800 crore, with appraisals during the period driving up employee costs 21 per cent.
Paytm, which also rents out devices that confirm payments to merchants, said revenue at its core payments business rose 31 per cent, while financial services revenue, which includes that of the buy now pay later loans, rose 93 per cent.
The company's fast-growing financial services business formed 22.3 per cent of the total revenue.
Its contribution margin — a measure of revenue less cashbacks and charges such as payment processing — rose to 56per cent, from 43per cent a year earlier. ($1 = 81.9800 Indian rupees)