Paytm, a leading Indian mobile payment and financial services company, has seen remarkable growth in recent times, making it an attractive investment opportunity. As a user of Paytm, one can attest to the convenience and ease of use the app provides in making payments and securing loans. In this article, we will delve into the five things investors should know about Paytm's growth and its potential for future profitability.
Firstly, Paytm achieved its operating profitability milestone ahead of schedule. The company had targeted September 2023 to reach this milestone, but it managed to achieve it significantly earlier. This is a great achievement, especially considering that it happened even with the cost of employee stock ownership plans (ESOP) at Rs 31 crore. This achievement signals the company's sound financial management, which is essential for long-term profitability.
Secondly, Paytm's loan distribution business, which collaborates with leading lenders, is experiencing rapid expansion. In the first quarter of 2023 (January to March), the total amount dispersed through the platform grew by an impressive 253% compared to the same period last year, reaching Rs 12,554 crores. This growth trajectory is a result of the company's broad base of payment consumers and merchants, representing a significant market opportunity.
Thirdly, Paytm's revenue from financial services operations has increased significantly. Paytm's revenue from financial services jumped two and a half times from March 2021 to an impressive Rs 2062 crore this quarter, with no UPI incentives recorded. The company's loan distribution services contributed to 22% of the total revenue, with revenue of Rs 446 crore, representing a 257% year-over-year growth and 9% quarter-over-quarter growth.
Fourthly, Paytm has become a leader in offline payments, with its Soundbox payment acceptance device using IoT technology to provide real-time audio confirmations for payments. This device has become an industry standard, with over 6.8 million merchants paying subscriptions for it as of March 2023. This subscription-as-a-service model has helped the company generate higher revenue from device subscriptions.
Finally, Paytm CEO and founder Vijay Shekhar Sharma believes that the company will soon become a free cash flow generating company. This is a significant achievement that shows the company's sound financial management and sustainable growth trajectory.
In conclusion, Paytm's growth has been impressive, with sound financial management and strategic expansion in various financial services. These five key things about Paytm's growth trajectory make it an attractive investment opportunity for investors looking for long-term profitability. With the company's commitment to quality loan portfolios and the growing demand for its payment acceptance devices, Paytm is on the path to sustained growth and profitability.
Watch this video to understand Paytm's impressive growth curve:
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