<div> </div><div>Since its IPO, Paytm faced mounting challenges, from intense market competition to IPO pressures. CEO Vijay Shekhar Sharma took proactive measures, cutting costs, and focusing on profitability. The steps, including ONDC integration, are yielding results, with the company poised to achieve EV/EBITDA breakeven by the third quarter of FY23.
 
 That isn’t all. In a piece of news that is surely set to bring smiles to Lakhs of investors of Paytm, Paytm Money, a wholly-owned subsidiary of Paytm has recently managed to bring a two-fold growth in its scale in FY23. More importantly, the subsidiary has achieved profitability.
 
 A few additional projections that leading agencies have made about the fortune of Paytm: 
 
 Goldman Sachs sees Paytm as the most profitable among peers 
 Goldman Sachs sees Paytm share rise by Rs. 500 or 77% in the next few months.
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Let’s take a look at how Paytm turned it around for themselves: <div style="margin-left:0pt"><table><tbody><tr><td>Categories</td><td>FY17</td><td>FY19</td><td>FY23</td></tr><tr><td>Sales</td><td>Rs. 625 Cr.</td><td>Rs. 3,050 Cr.</td><td>Rs. 6,028 Cr.</td></tr><tr><td>Expenses</td><td>Rs. 2,389 Cr.</td><td>Rs. 7,164 Cr.</td><td>Rs. 7,729 Cr.</td></tr><tr><td>Operating Profit/Loss</td><td>Rs. (-1,764) Cr.</td><td>Rs. (-4,114) Cr.</td><td>Rs. (-1,365) Cr.</td></tr><tr><td>OPM %</td><td>-282%</td><td>-135%</td><td>-21%</td></tr></tbody></table></div> What can we decipher from the above table?
 
 Paytm’s Sales Revenue has increased at a faster rate of 10x while expenses increased only 3x between FY17 &amp; FY23.
 
 Company’s Op. Loss has remained more or less constant between FY17 &amp; FY23 despite a 3x increase in expenses, which shows the company is using its revenue to grow.
 The company’s OPM% has seen sizable improvement over time, from -282% in FY17 to -135% in FY19 to just -21% in FY23, showing better utilization of revenue.

<div>​​ </div><div style="margin-left:0pt"><table><tbody><tr><td>Categories</td><td>FY22</td><td>FY23</td></tr><tr><td>Revenue</td><td>Rs. 64.1 Cr.</td><td>Rs. 131.8 Cr.</td></tr><tr><td>Expenses</td><td>Rs. 90 cr.</td><td>Rs. 79.5 Cr.</td></tr><tr><td>EBITDA Margin</td><td>-13.39%</td><td>33.19%</td></tr><tr><td>Expense/Rs. Of Op. Revenue&nbsp;</td><td>Rs. 1.24</td><td>Rs. 0.69</td></tr><tr><td>RoCE</td><td>-20.84%</td><td>40.46%</td></tr></tbody></table></div><div> </div><div>Facts to decipher:
 
 The company is now EBITDA positive, which shows curbing of unnecessary costs
 
 Company is spending approx ~ 47% less, Rs. 0.69 to earn Re.1 of revenue
 
 The company is giving excellent returns on capital employed, which shows efficiency.​​ </div><div> </div>

<div>​​ </div><div> </div><div style="margin-left:0pt"><table><tbody><tr><td>Cash Flow</td><td>FY17</td><td>FY19</td><td>FY23</td></tr><tr><td>Operating Activities</td><td>Rs. (-1828) Cr.</td><td>Rs. (-4355) Cr.</td><td>Rs. 92 Cr.</td></tr><tr><td>Investing Activities</td><td>Rs. 1672 Cr.</td><td>Rs. 1709 Cr.</td><td>Rs. 2946 Cr.</td></tr><tr><td>Financing Activities</td><td>Rs. 472 Cr.</td><td>Rs. 2861 Cr.</td><td>Rs. (-1101) Cr.</td></tr><tr><td>Net Cash Flow</td><td>Rs. 316 Cr.</td><td>Rs. 215 Cr.</td><td>Rs. 1936 Cr.</td></tr></tbody></table></div><div> </div><div>Facts to decipher:
 
 Paytm is now generating surplus cash flow from operations of Rs. 92 Cr. in comparison to a deficit of Rs. 1828 Cr. in FY17.
 
 The company is also generating surplus cash flow from investing activities which has been possible due to its shedding of unnecessary assets.
 
 The overall Net Cash flow firmly remains in the surplus category &amp; has grown 6x between FY17 &amp; FY23.
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<div>​​ </div><div>Key points:&nbsp;</div><div style="margin-left:0pt"><table><tbody><tr><td>Innovations</td><td>2021</td><td>2022</td><td>Growth</td></tr><tr><td>Soundbox</td><td>6 Lakh</td><td>58 Lakh</td><td>866%</td></tr><tr><td>Loan Book Growth</td><td>Rs. 2,181 Cr.</td><td>Rs. 9,958 Cr.</td><td>357%</td></tr><tr><td>10% Margin on Loan&nbsp; Book</td><td>Rs. 218 Cr.</td><td>Rs. 995 Cr.</td><td>356%</td></tr></tbody></table></div><div> </div><div> </div><div>Facts to decipher:
 
 Paytm is now generating surplus cash flow from operations of Rs. 92 Cr. in comparison to a deficit of Rs. 1828 Cr. in FY17.
 
 The company is also generating surplus cash flow from investing activities which has been possible due to its shedding of unnecessary assets.
 
 The overall Net Cash flow firmly remains in the surplus category &amp; has grown 6x between FY17 &amp; FY23.
 
 Major contributing factors behind its revival:
 
 Soundbox: Paytm's Soundbox has emerged as a remarkable asset, outpacing competitors by deploying a staggering 10x more devices among merchants. Its primary objective, enhancing the financial tracking capabilities of local Kirana stores, has yielded extraordinary results, with an astounding 866% surge in Soundbox installations.
 
 Loan Disbursals: To further capitalize on its data resources, Paytm has embarked on monetization efforts, forging collaborations with institutions to offer an array of financial products, including loans, credit cards, and insurance, to its extensive user base.
 
 The statistics reveal an impressive 357% growth in Paytm's loan book. Assuming a conservative 10% margin on these loans, the result is a substantial 356% increase in revenue. In the last four quarters, Paytm has recorded total margins amounting to Rs. 2,758 Cr. Interestingly, this figure surpasses Paytm's fixed costs, which stand at Rs. 2,728 Cr., underscoring the effectiveness of its loan disbursal strategy in covering operational expenses.
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Since its IPO, Paytm faced mounting challenges, from intense market competition to IPO pressures. CEO Vijay Shekhar Sharma took proactive measures, cutting costs, and focusing on profitability.

Do you believe in PAYTM'S TURNAROUND story ??

Paytm Money's Remarkable Journey to Profitability: A Fintech Success Story

Discover the inspiring tale of Paytm Money, a trailblazing fintech success story that has achieved remarkable profitability.