Paytm has turned operationally profitable!
According to the latest quarterly report,
“In Q3 FY 2023, our EBITDA before ESOP cost was ₹31 Cr as compared to (₹393 Cr) in Q3 FY 2022 and (₹166 Cr) in Q2 FY 2023. EBITDA before ESOP cost margin improved to 2% of revenues in Q3 FY 2023 from (27%) of revenues in Q3 FY 2022 and (9%) of revenues in Q2 FY 2023.”
Since its IPO listing in 2021, the company has witnessed a sharp correction in its share price. From the listing price of ₹2,150, the share price has fallen over 200%.
But is the worst over?
What will be the future of Paytm share price?
According to a recent article by LiveMint, Citigroup has recommended buying Paytm shares for long-term growth. And it’s not just Citi. Goldman Sachs and Macquarie echo the same sentiment. The upside is coming, and it’s here to stay!
Three key verticals that could drive the company’s growth in the coming years are payments, financial services, and e-commerce.
Payments are Paytm’s core business, and the company has been expanding its offerings in this space. It has launched a range of payment options, including digital wallets, UPI payments, and credit cards. In Q3 FY23, revenue from the payment services increased to ₹1,197 crores, a net growth of 21% over the previous year.
Paytm has also been working to increase its merchant base, with a focus on small and medium enterprises. With the growth in digital payments in India, Paytm is well positioned to capitalise on this trend and drive growth in its payments business. The company expects to receive about ₹130 crores of UPI incentives in the next quarter.
As for financial services, that has taken off like a rocket! The revenue from this segment grew by 257% over the last year. This is primarily due to the launch of numerous new products like savings accounts, insurance, and loans. This horizontal expansion and offering of complementary services has worked for Paytm. As more and more users are shifting to fintech, these services can drive significant growth.
Paytm has also been investing steadily in its e-commerce platform. The company has launched a range of products on its platform, including electronics, fashion, and groceries. With the growth in e-commerce in India, Paytm is well positioned to capture a share of this market.
Should you invest?
As per the analysis of the brokerage firms, there is a lot of potential upside in Paytm. But please be aware that there are risks associated with any investment. Make sure you do your own research before investing.