The shares of One97 Communications, also the parent firm of Paytm, surged 4 percent up to Rs 697.5 apiece on the intra-day trade of the BSE and ahead of the company’s March quarter result Q4FY23 (FY23). The shares increased 3.5 percent as the benchmark S&P BSE Sensex fell 0.34 percent at 10:30 am.
So far in this calendar year, the fintech company’s shares have zoomed 26 percent against a 1.5 percent gain in the benchmark of the S&P BSE Sensex. Goldman Sachs also has high expectations from Paytm that it will surely report revenue growth of 49 percent based on year-on-year, while the Ebidta margin will be adjusted at 10 percent.
While back home, the domestic brokerage firm YES Securities expect an overall revenue from all of their operations t grow at 17.8 percent QoQ (quarter-on-quarter) to Rs 2,430 crore. Also, there has been an upgrade in the brokerage as now the target price on the stock to Rs 700 vs. Rs 600 earlier.
During the business update of Q4FY23, Paytm stated that their GMV (Gross Merchandise Value) had grown 40 percent during this quarter compared to the same quarter last year. The GMV stood at Rs 3.62 trillion at the end of Q4FY23 from Rs 2.59 trillion in Q4FY22.
While the value of the total disbursed loans went from Rs 3,553 crore in Q4FY22 to Rs 12,554 crore in Q4FY23, which is 253 percent, as the number of loans also rose 82 percent during the same time from 6.5 million to 11.9 million.
Paytm also stated that they are continuously working towards strengthening their leadership in offline payments as they now have 6.8 merchants that are paying a subscription for the payment devices, with an increase of 1 million in the quarter that ended in March 2023.
As their subscription will now act as a service model, the strong adoption of the device drives higher payment volumes and subscription revenues while increasing the funnel for the distribution of their merchant loan, as stated by Paytm.
According to the growth of Paytm, the brokerage firm of Motilal Oswal Financial Services has initiated coverage on the company in the last months with a ‘Buy’ rating and a target price of Rs 865.
Reports have also stated that Paytm has been reporting healthy traction in the growth of its GMV at 55 percent CAGR over FY19-23. Surely the company’s growth was slightly softer during the pandemic, but they have picked up strongly in the post-Covid era.
The GMV of the company has clocked at 81 percent CAGR over FY21-23 as use cases are increasing. The company expects its GMV to provide a healthy report of 27 percent CAGR over FY23-25.
Reports have also stated that Paytm has posted steady growth in their MTUs (Monthly Transacting Users) to about 90 million as of FY23. At the same time, the number has rose to 6.8 million subscription payment devices. As of now, the penetration among most of the merchants remains low, and they are expecting that traction will sustain.
