Paytm declares Q2 results, earns Rs 930 crore as windfall gains by way of sale of ticketing business to Zomato

Paytm's parent company, One97 Communications, declared its Q2FY25 results today, announcing a one-time, exceptional profit of Rs 1,345 crore during the quarter, thanks to the sale of its entertainment ticketing business. The company's PAT (profit after tax) stood at Rs 930 crore.

Notably, without this windfall gain, Paytm's finances would still be in red, with the company racking up losses worth Rs 415 crore. Paytm was in red in the year-ago period as well, incurring losses worth Rs 290.5 crore.

This windfall profit also improved Paytm's EBITDA by Rs 388 crore on a QoQ basis.

The company's revenue also saw a slight uptick of 10.5% quarterly to Rs 1,659 crore, as opposed to Rs 1,501 crore in the previous quarter. But on a year-on-year basis, Paytm's revenue dipped significantly by 34%. The company also announced that it has entered into a DLG (default loss guarantee) model for its merchant loans of about Rs 225 crore with SMFG India Credit. Under this arrangement, Paytm will be first in line to take a hit in case of a loss that emerges from borrowers defaulting or skipping their payments.

There is increased interest and comfort from existing as well as new lenders to expand the partnership due to better asset quality trends and higher demand from our merchants. Following the regulatory framework and the emerging market practice, we see increased willingness from lenders to partner and allocate more capital in the default loss.
Guarantee (DLG) model. The DLG model will help to increase disbursements with the existing partners and expand partnerships with new lenders for the loan distribution,” said the company in its earnings release today.

The company's revenue from payment business also inched up 9% on a quarterly basis, along with its revenue from financial services, which grew by 34% QoQ. At present, Paytm's total merchant subscriptions stand at 1.12 crore, with the company garnering 3 lakh new merchants during the quarter.

During the previous quarter, Paytm's gross merchandise value (GMV) also inched up by 5% on a sequential basis, which experts anticipate will continue in the coming quarters, just as India braces for the festive season.

Per its release, Paytm aims to achieve EBITDA profitability (before ESOPs) by the fourth quarter of this financial year. However, investors remained unimpressed with Paytm's performance, with its share slipping by around 3.96% during the day to trade at Rs 697.20. The stock has a YTD (yield-to-date) of 7.91% during the year.