Paytm Q3 Business Update: All you need to know!

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Paytm Q3 update

Paytm launched India's biggest-ever initial public offering in November. On the debut, the stock price plunged by 28%. From the issue price of Rs 2150, the stock has fallen over 45% and is currently trading around Rs 1150. 

Analysts have flagged off several concerns ranging from lower earnings estimates, rich valuations to senior management departures. On Monday evening, the company shared its Q3 update. Below are all the details:

Paytm's Q3 Update

  • The company's Gross Merchandise Value (GMV) saw a 123% jump in the Oct-December period on the back of festive season activity. It reported a GMV of Rs 2.50 lakh crore in Q3FY22 from Rs 1.12 lakh crore in the same quarter for the financial year.
  • The number of loans disbursed through its platform jumped five times YoY to 4.4 million loans during the December quarter.
  • The value of loans disbursed through its platform during the Oct-Dec period was Rs 2,180 crore, an increase of 365% YoY.
  • The company also said it has seen stellar growth in each of the lending products - Paytm Postpaid (Buy-Now-Pay-Later), Personal Loans, and Merchant Loans.
  • The Monthly Transacting Users (MTU) showed consistent growth in FY21 and the first two-quarters of FY22. The trajectory has continued in Q3FY22 with 64.4 million average MTUs, a growth of 37% YoY over the 47.1 million average MTUs in Q3 FY21.
  • The total number of devices deployed across the merchant base has increased from 9 lakh as of June 30, 2021, to approximately 13 lakh as of September 30, 2021, to approximately 20 lakh as of December 31, 2021.

Brokerage Update

The brokerage firm Macquarine has cut the target for Paytm's share. Macquarine in November has set a target of Rs 1200 post the listing. It has now cut its earlier target to Rs 900 per share - 25% more downside.

The firm believes the company has limited potential to scale distribution business for merchant loans. It said in its report that its revenue projections, particularly on the distribution side, are at risk, and hence they pare down revenue CAGR from 26% to 23% for FY21-26. 

They are roughly cutting revenue estimates for FY21-26E on an average of 10% every year due to lower distribution and commerce/cloud revenues offset partially by higher payment revenues.