Indian fintech company Paytm reported a significant reduction in its third-quarter adjusted loss as its digital payments business rebounded following the winding down of its payments bank unit. The company recorded a loss of 2.04 billion rupees ($23.6 million) before exceptional items and tax, a notable improvement from the 4.07-billion-rupee loss in the previous quarter. Compared to the same quarter last year, the net loss also narrowed slightly from 2.2 billion rupees.
Paytm’s operational revenue rose 10.1% sequentially to 18.28 billion rupees, with financial services revenue growing by 34% and payment services increasing by 8%. This recovery comes despite regulatory challenges after the Reserve Bank of India shut down Paytm Payments Bank in January 2024 due to compliance issues. Meanwhile, the company’s expenses dropped 31% year-on-year and 1% sequentially, mainly due to reduced marketing and employee-related costs.
Market analysts suggest that Paytm is overcoming regulatory hurdles, though its wallet business remains impacted by the RBI’s embargo on its banking unit. The company’s earnings before interest, taxes, depreciation, and amortization (excluding employee stock option costs) improved to a negative 410 million rupees from a negative 1.86 billion rupees in the prior quarter. Additionally, Paytm increased its default loss guarantee for loans disbursed through its lending partner SMFG India Credit, raising it to 3.5 billion rupees from 2.25 billion rupees.