Paytm Q2 Results Preview: One 97 Communications, the parent company of fintech major Paytm, will declare its earnings for the second quarter of FY25 today. Paytm shares have seen a decent recovery recently and will be on investor’s radar today ahead of the announcement of Q2 results.
Analysts estimate Paytm’s total revenue growth to improve during the quarter ended September 2024, but losses are also expected to widen.
Paytm is expected to report a higher net loss of around ₹660 crore in Q2FY25 as against a net loss of ₹290 crore in the same quarter last year, according to estimates by Motilal Oswal Financial Services. However, on a sequential basis, Paytm’s loss is expected to narrow down. It posted a net loss of ₹840 crore in the June quarter.
The digital payments major is expected to clock revenue from operations of ₹1,617 crore in Q2FY25, a 35% fall year-on-year (YoY). However, revenue is expected to grow 8% QoQ.
Motilal Oswal expects Paytm’ operating profitability to improve and disbursements and Gross Merchandise Value (GMV) to increase sequentially. Any further impact of the RBI notification to be a key monitorable, it said.
“We estimate a 7% QoQ growth (flat YoY) in GMV, amounting to ₹4.6 trillion. Revenue from its operations is projected to increase 8% QoQ (down 36% YoY) to ₹16.2 billion, while contribution profit is estimated to increase 13% QoQ (down 40% YoY) to ₹8.5 billion for 2QFY25. The contribution margin is likely to be ~53%. Adjusted operating loss is estimated to be ₹3.1 billion in 2QFY25,” Motilal Oswal said.
Yes Securities assumes -2% QoQ de-growth in Payments Services to Consumers, 10% QoQ growth in Payments Services to Merchants and 10% QoQ growth in Financial Services and Others and arrives at an overall growth in Revenue from operations of 8% QoQ.
“We forecast Payment Processing Charges (PPC) as a proportion of Payments Revenue to be at 57.0%, a metric that was 58.5% in 1QFY25. We arrive at a Total Expenses (ex PPC) de-growth of -4% QoQ, compared with a growth of 0.1% in 1QFY25, resulting in an EBITDA margin (ex Other Income and after ESOP cost) of – 39.1%, an improvement of -1,363 bps QoQ,” Yes Securities said.
Paytm Stock Price
Paytm stock price has recovered from its record low levels and has gained over 9%. Paytm shares have rallied more than 58% in three months, and over 14% year-to-date (YTD). However, in the past 12-month period, Paytm shares have dropped over 26%.
Yes Securities downgraded Paytm shares to ‘Add’ from ‘Buy’ and has a target price of ₹775 per share. MOFSL has a ‘Neutral’ rating with Paytm share price target of ₹672 apiece.
On Monday, Paytm shares ended 0.12% higher at ₹725.85 apiece on the BSE.
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