Paytm to be operating EBITDA breakeven in 6 quarters: Vijay Shekhar Sharma
Fintech major Paytm is likely to be operating EBITDA breakeven in the next six quarters, the company’s founder and CEO Vijay Shekhar Sharma said in a letter to shareholders on Wednesday.
“We should be operating EBITDA breakeven in next six quarters (i.e. EBITDA before ESOP cost, and by the quarter ending September 2023), well ahead of estimates by most analysts. Importantly, we are going to achieve this without compromising any of our growth plans,” Sharma wrote.
“Against the backdrop of volatile market conditions for high growth stocks globally, our shares are down significantly from the IPO price. Rest assured, the entire Paytm team is committed to build a large, profitable company and to create long-term shareholder value,” he added.
According to the letter, Sharma’s stock grants will be vested to him only when Paytm’s market cap crosses the IPO level on a sustained basis.
The company said that the number of loans disbursed through its platform grew 374 per cent to 6.5 million loans in the March quarter, compared to the year-ago period. Meanwhile, the value of loans disbursed was Rs 3,553 crore, growing 417 per cent year-on-year.
Total merchant payment volume (GMV) processed through the platform during the fourth quarter of FY22 aggregated to approximately Rs 2.59 trillion ($34.5 billion), marking a y-o-y growth of 104 per cent.
Paytm shares were trading at Rs 626 on the BSE at the time of publishing. The stock has fallen as much as 75 per cent from its IPO price of Rs 2,150 in the recent weeks.
The company’s stock has been plunging when technology companies’ stock prices have been pummeled the world over. However, Paytm has also faced the ire of analysts who have questioned its earnings from loan disbursals and thinly-spread out business model across cloud services, gaming and e-commerce, among other things.
In the December quarter, Paytm saw its revenue increase 89 per cent to Rs 1,456 crore on a year-on-year basis, whereas net loss widened 45 per cent to Rs 778 crore.
However, the company had said that its contribution profit (defined as revenue from operations less payment processing charges, promotional cashback and incentives, and other direct costs) improved to 31.2 per cent of revenue in Q3FY22 from 8.9 per cent in Q3FY21.
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