Indian digital payments firm Paytm, opens new tab posted an operating profit for the fifth consecutive quarter on Friday on account of festive season-led sales.
Operating profit, which the company defines as core profit before cost of employee stock-options, was at 2.19 billion rupees for the quarter ended Dec. 31 compared with 310 million rupees a year ago.
India's festive season was delayed to late October last year, resulting in consumers spending more during the quarter. An increasing number of Indians are turning to digital payment platforms such as Paytm and peers Google Pay and Phone Pe to make their purchases.
Paytm, one of India's first startups to go public, said its consolidated revenue rose 38% to 28.51 billion rupees, with the payments business contributing 61% to the total.
The company - which is also a non-bank lender - said revenue from its financial services business, including the loan segment, rose 36% for the quarter. It makes up 21% of the total revenue.
In early December, it said it would issue fewer sub-50,000 rupee loans in light of the central bank tightening rules on consumer spending after a surge in small-ticket loans.
Its value of buy now, pay later (BNPL) loans, or postpaid loans distributed during the quarter, grew 44% from last year but was down 17% sequentially as the company slowed down its postpaid loan distribution, which included the sub-50,000 rupee loans. The segment is the largest among Paytm's loan categories.
"Despite the postpaid business taking a hit on sequential basis, company's pace to turn profitable remains the same as expected," said Rahul Jain, financial analyst at Dolat Capital.
"Overall numbers could have been even better if it was not scaling down small-ticket loans," Jain added.
Under the personal loan segment, Paytm said its average loan ticket size increased to 168,000 rupees from 120,000 rupees a year ago as it looks to expand to high-ticket loans.
© Reuters.
