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Fintech firm One97 Communications, which owns Paytm brand, on Friday said its loss has widened to Rs 840 crore in the quarter ended June 30, primarily due to continued impact of restrictions on Paytm Payments Bank Ltd.
The company had posted a loss of Rs 358.4 crore in the same period a year ago, according to a regulatory filing by the company.
The consolidated revenue of Paytm declined 33.48 per cent to Rs 1,639.1 crore during the reported quarter, from Rs 2,464.2 crore in the same period a year ago.
Paytm spokesperson attributed the widening of loss and decline in revenue primarily to the disruption in business due to restrictions imposed on associate company Paytm Payments Bank Limited (PPBL) by the Reserve Bank of India (RBI).
"There were three factors which have led to this (decline in revenue and widening of loss) which are primarily disruption on account of PPBL products like Wallet.
"We stopped using Wallet and some of the products," the spokesperson said.
The company also temporarily stopped some of the products on which regulators may have concern at an industry-level.
"We temporarily stopped a lot of those products and those products are in the process of starting.
"The third (factor) is that because of the disruption, our merchant base and GMV (gross merchandise value) came down and that has an impact on the profitability overall," the spokesperson said.
Paytm's GMV declined by 9.1 per cent from Rs 4.69 lakh crore on a quarter-on-quarter basis.
On a year-on-year (YoY) basis, however, Paytm reported GMV of Rs 4.3 lakh crore, up 5 per cent in the reported quarter.
The GMV from continued business recorded a 27 per cent jump on YoY basis to Rs 4.26 lakh crore, from Rs 3.36 lakh crore, despite a 15 per cent decline in monthly transacting users on a YoY basis to 7.8 crore.
According to the spokesperson, the first quarter has absorbed the impact of PPBL disruption and the performance of companies will take off from the second quarter onwards.
The spokesperson said that there is now improvement in the company's operating matrix including GMV, device merchant, recovery in loan distribution business as well as cost optimization.
"We are going to be very sharp in terms of cost optimisation.
"We have communicated that the employee cost has reduced by 9 per cent quarter-on-quarter in line with what we have said in last quarter.
"There were certain one-time items in this quarter that will come down sharply in the next quarter.
"The combination of these factors will lead to financial improvement," the spokesperson said.
The employee benefit cost declined to Rs 798.4 crore, from Rs 970 crore on a year-over-year basis and from Rs 966 crore in March 2024 quarter.
Paytm reported a 5 per cent increase in average number of sales employees on YoY basis to 31,607 in the reported quarter, compared to 28,479 in June 2023 quarter.
The number, however, declined by 13 per cent on a quarter-on-quarter basis.