Paytm Q4 results preview: Loss at Rs 469 crore likely, GMV to drop 23%, says Motilal

One 97 Communications Ltd (Paytm) is likely to report a net loss of Rs 469.30 crore for the March quarter, as operating profitability would take a hit due to the RBI’s ban on Paytm Payments Bank (PPBL), Motilal Oswal said in its results preview note on banking and financial sector.

The domestic brokerage expects a decline in Paytm's disbursements and gross merchandise value. It also sees a fall in growth in total revenue and said any further impact of RBI notification will be a key montiorable.

On January 31, the central bank had ordered Paytm Payments Bank to shut most of its operations, including credit products, deposits and digital wallets due to “persistent non-compliance”. Recently, the National Payments Corporation of India (NPCI) granted Paytm to participate in UPI as a Third-Party Application Provider (TPAP) under multi-bank model.

Motilal Oswal sees revenue from operations at Rs 1,830 crore, down 21 per cent YoY. Contribution margin is seen at 59.6 per cent. Ebitda margin is seen at minus 23.6 per cent while adjusted Ebitda margin at minus 2.5 per cent.

"We estimate a 23 per cent YoY decline in GMV in 4QFY24, amounting to Rs 3.9t. Additionally, the value of disbursed loans is expected to plunge 67 per cent sequentially, as the company has suspended postpaid loans due to RBI concerns and put merchant loans on hold pending data on QR transition," Motilal Oswal said.

"Revenue from operations is projected to decrease by 21 per cent YoY to Rs 1,830 crore, while contribution profit is estimated to decline by 15 per cent YoY to Rs 1,090 crore, with a contribution margin of 60 per cent. Adjusted Ebitda loss is estimated to be at Rs 50 crore. We have factored in UPI incentive in our estimates during 4Q," the brokerage added.