Paytm (One 97 Communications), India’s leading digital payments platform, is expected to report wider losses and a significant revenue decline in its Q3FY25 earnings announcement scheduled for January 20, 2025. The company’s performance has particular significance for Tamil Nadu’s fintech landscape, where Paytm has been expanding its merchant base.
According to Bloomberg estimates, Paytm’s revenue is projected to decline by 34.4% year-on-year to Rs 1,868.4 crore, compared to Rs 2,850.5 crore in the previous year. However, a sequential improvement of 10.8% from the previous quarter suggests some stabilization in the company’s operations.
The anticipated net loss of Rs 35.05 crore for Q3FY25 marks a concerning shift from the Rs 93 crore profit reported in Q2FY25, raising questions about the sustainability of the company’s profitability trajectory. This development is being closely watched by Tamil Nadu’s startup ecosystem, where Paytm serves as a benchmark for fintech success.
Analysts point to several key factors influencing Paytm’s performance in Tamil Nadu and nationwide. Abhishek Pandya, research analyst at StoxBox, notes, “The operational revenue is expected to improve in Q3 due to strong growth in merchant device subscription revenue. The recent FDI approval for PPSL and reapplication for the Payment Aggregator license with RBI marks a crucial development for the company’s future growth.”
In Tamil Nadu specifically, Paytm has been focusing on merchant acquisition and device deployment. The state, with its robust retail sector and growing digital adoption, represents a significant market for Paytm’s merchant services. Local business owners have reported increased adoption of Paytm’s payment solutions, particularly in tier-2 and tier-3 cities across the state.
Motilal Oswal’s analysis suggests positive momentum in key metrics, projecting Q3 revenue at Rs 1,800 crore, up from Rs 1,660 crore in Q2. The brokerage emphasizes growth in disbursements and gross merchandise value (GMV), indicating healthy transaction volumes despite revenue challenges.
The company’s strategic initiatives, including cost optimization and focus on increasing Average Revenue Per User (ARPU), are expected to play crucial roles in its path to profitability. Paytm’s recent stake sale in its entertainment business and PayPay Corp has contributed to increased non-operating income, potentially offsetting some operational challenges.
For Tamil Nadu’s startup ecosystem, Paytm’s performance serves as a critical indicator of the digital payments landscape’s health. The state’s numerous fintech startups and digital payment solutions providers closely monitor Paytm’s strategies and market responses to inform their own growth trajectories.
Looking ahead
Analysts expect Paytm to achieve profitability by FY26, excluding one-off gains. This projection, combined with the company’s focus on reactivating inactive users and expanding its ecosystem, suggests a steady performance outlook for Q3FY25, with potential positive implications for Tamil Nadu’s digital economy.
