Paytm founder and CEO Vijay Shekhar Sharma, in a letter to shareholders on November 14, assured shareholders that the company is on the right path to profitability and free cash flows.
Sharma, in the letter, said, “One year ago, we made our way to the public markets. We are aware of the expectations that Paytm carries, and I assure you that we are on the right path to profitability and free cash flows.”
Sharma also added that the company’s focus is on its loan distribution vertical, and they are also parallelly “scaling up lending distribution that can bring financial inclusion to hundreds of millions of people in the country.” Sharma is also very optimistic about the prospect of the lending business, as India has a huge demand for lending.
The company reported its results for the second quarter of this financial year on November 8. The company’s consolidated loss for this quarter was at Rs 571.5 crore, while it was at Rs 473.5 crore last quarter.
The consolidated revenue from operations for the quarter increased by 76.2 per cent at Rs 1,914 crore.
Paytm reported an increase of nearly five times in loan disbursements in October to Rs 3,056 almost 387 per cent up from Rs 627 crore a year ago. The number of loans disbursed by Paytm went up 161 per cent, almost three times more at 3.4 million.
Sharma said that the company is excited about the next year as the quarterly reports show strong operating leverage and a reduction in EBITDA losses. The company is also close to EBITDA profitability and free cash flow generation.
According to the CEO of Paytm, the government incentives for UPI payments and the increasing adoption of Paytm devices by merchants are making payments more profitable and monetizable. In fact, Paytm’s commerce business is profitable and is operating at full cost loaded profitability.