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Indian Fintech Paytm Eyes Profitability Within Two Quarters Amid Operational Recovery

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India’s leading fintech company, Paytm, announced plans to achieve profitability within one to two quarters following a narrower adjusted loss in the third quarter, as its payments business shows signs of recovery after regulatory setbacks.

Financial Performance Highlights

For the quarter ending December 31, 2024, Paytm reported:

  • Adjusted loss: ₹2.04 billion ($23.6 million), down from ₹4.07 billion in the second quarter.
  • EBITDA (excluding employee stock option costs): Negative ₹410 million, a significant improvement from a negative ₹1.86 billion in the previous quarter.
  • Revenue growth: Operational revenue rose 10.1% sequentially to ₹18.28 billion, driven by:
    • Financial services (including lending): Up 34%.
    • Payment services: Up 8%.
  • Reduced expenses: Down 31% year-on-year and 1% sequentially, primarily due to decreased marketing and employee-related costs.

The company’s Chief Financial Officer, Madhur Deora, expressed confidence in achieving profitability at the PAT (profit after tax) level once its EBITDA metric turns positive.

Operational Challenges and Recovery

In January 2024, the Reserve Bank of India shut down Paytm’s payments bank unit over compliance issues, raising concerns about the company’s digital payments business. However, Paytm’s recent performance suggests a turnaround, with Rahul Jain, Vice President of Research at Dolat Capital, stating, “Paytm’s fundamentals are improving, and regulatory hurdles appear to be largely behind us.”

The company also increased its default loss guarantee for merchant loans disbursed through its lending partner, SMFG India Credit, from ₹2.25 billion to ₹3.5 billion, signaling confidence in the growth of its lending business.

Strategic Focus

  • Lending Business: While its partners remain cautious on unsecured lending, Paytm expects steady growth in merchant loans.
  • Cost Optimization: Reduced marketing and employee expenses have contributed to narrowing losses and improving financial health.

Outlook

With rising operational revenues, controlled expenses, and easing regulatory challenges, Paytm is optimistic about reaching profitability in the near term. The company’s strategy to expand its lending business and maintain financial discipline positions it for sustainable growth in India’s fintech market.

 

Infosys Raises Annual Revenue Forecast on US Demand Revival

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Infosys, India’s second-largest software services exporter, has raised its annual revenue forecast for the third time this financial year, driven by a revival in U.S. demand, particularly from banking and retail clients. The company now expects its annual revenue to rise by 4.5% to 5%, an increase from its previous forecast of 3.75% to 4.5%.

This upbeat outlook mirrors the sentiments of other Indian IT giants, including Tata Consultancy Services (TCS) and HCLTech, which have also reported early signs of a recovery in discretionary spending. Infosys’ CEO, Salil Parekh, noted an improvement in the U.S. retail and consumer product industries, as challenges related to discretionary spending ease.

In the third quarter, Infosys posted a 7.6% revenue growth to 417.64 billion rupees ($4.83 billion), exceeding analyst estimates of 412.78 billion rupees. The growth was mainly driven by an uptick in revenue from North American clients, which constitute 60% of the company’s total revenue. This marks a significant recovery, as North American revenue had declined for five consecutive quarters.

Infosys also reported an 11.4% increase in profit for the quarter, reaching 68.06 billion rupees, surpassing analysts’ expectations. The company highlighted that all eight business segments saw higher growth, with the financial services division growing 6.1%. The company secured large orders worth $2.5 billion, reflecting its focus on significant deals and strategic engagements.

Gaurav Parab, an analyst at NelsonHall, noted the positive results, particularly the company’s focus on large deals and the promising developments in Agentic AI, a technology enabling AI-powered agents and bots.

 

iGenius to Complete $1B Data Centre Project with Nvidia by Summer

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Italian AI startup iGenius is on track to complete a $1 billion data centre project in southern Italy by the summer, utilizing Nvidia technology. The project, which will span five years, has prompted the company to extend its funding round from an initial target of 650 million euros. CEO Uljan Sharka shared that the new supercomputer built for the data centre will perform at an extraordinary rate, capable of executing 115 billion calculations per second. This marks a significant leap from Europe’s previous top supercomputers, which could handle only 0.5 billion calculations per second until last year.

The data centre will be powered by Nvidia’s advanced Blackwell chips, providing 35 times more computing power than their predecessors, while using 25 times less energy. The facility will house 80 of Nvidia’s most powerful servers, each containing 72 Blackwell chips. Southern Italy was chosen as the site for the project due to its surplus of renewable energy capacity, which will help meet the high power demands of the supercomputing operation.

iGenius, founded in 2016, is one of the few AI startups in Europe valued at over $1 billion, competing with other industry players such as France’s Mistral and Germany’s DeepL. The company recently launched Colosseum 355B, a large language model designed specifically for industries with stringent data protection needs, including finance, heavy industry, and government sectors. iGenius differentiates itself from competitors like OpenAI by providing open-source AI models for companies to run on their own infrastructure, allowing for greater control over sensitive data.