On Monday, January 20, India's Paytm announced a reduced sequential third-quarter adjusted loss, showing a recovery in its digital payments business following the phase-out of its payments bank unit. The company reported a loss of 2.04 billion rupees ($23.6 million) before exceptional items and tax for the quarter ending Dec. 31, improved from a 4.07-billion-rupee loss in the previous quarter. Notably, Paytm's net loss was narrower compared to the year-ago quarter at 2.2 billion rupees.
In the third quarter, Paytm's revenue from operations grew by 10.1% to 18.28 billion rupees, with financial services revenue up by 34% and payment services business rising by 8%. Expenses decreased by 31% year-on-year and 1% sequentially, attributed to lower marketing and employee-related costs.
Rahul Jain, vice president - research at Dolat Capital, remarked, "Paytm's fundamentals are improving and it seems like the regulatory hurdles are largely behind us". He pointed out that despite progress, the wallet business continues to be impacted by the RBI's constraints on Paytm Payments Bank.
Additionally, the company disclosed an increase in its default loss guarantee to 3.5 billion rupees from 2.25 billion rupees to its lending partner SMFG India Credit for loans provided to merchants. Following the results announcement, Paytm shares, which had been down over 11% in January, rose by 0.3%, reversing a previous decline.