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Sustained robust growth in GMV and loan disbursements

Broad-based traction in key business lines through payments, lending and device deployment

One 97 Communications Ltd (Paytm) released its quarterly update highlighting the key business numbers for 4QFY22. The key takeaways are as follows:

* The total gross merchandise value (GMV) continued to gain traction in 4QFY22 with 104% YoY growth to INR2.59t. Further, the sequential growth of 4% was encouraging, given the impact of festive season in 3QFY22. This was supported by an improvement in omni-channel presence.

* Average Monthly Transacting Users (MTU) grew 41% YoY to 70.9m in 4QFY22 (from 64.4m in Dec’21) as the super app provides the most comprehensive payment choices to the customers.

* The total devices deployed rose notably to 2.9m in 4QFY22 from 0.8m in Mar’21; the number stood at 2.0m in Dec’21. The current run rate of deployment is 1,000 devices per day. This will also lead to a rise in the number of eligible merchants for loans.

* The total number of loans disbursed grew 374% or 3.7x YoY to ~6.5m in 4QFY22 (from 4.4m in 3QFY22). The total value of loans disbursed grew 417% or 4.2x YoY to INR35.5b in 4QFY22 (from INR21.8b in 3QFY22). This was driven by a rapid scale-up in Buy-Now-Pay-Later, consumer loans and merchant loans. Regulatory clarity from the RBI has made lending a mainstream business for the company.

* Management expects strong business momentum to continue and aspires to achieve an operating EBITDA breakeven in the next six quarters (that is, EBITDA before ESOP cost by 2QFY24E).

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