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India’s Paytm Eyes Profitability by June as Losses Narrow Post ESOP Charge

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Indian digital payments giant Paytm said Tuesday it expects to become profitable in the April-June quarter, following a sharp reduction in losses after adjusting for a one-time employee stock option (ESOP) charge.

Founder and CEO Vijay Shekhar Sharma stated during the company’s post-earnings call that Paytm is “at the verge of PAT profitability” and is confident that the coming quarter could mark its first profitable period if current trends hold.

For the quarter ended March 31, Paytm reported a net loss of ₹5.4 billion ($64 million), wider than the previous quarter’s ₹2.08 billion loss. However, this included a one-time ESOP-related charge of ₹4.92 billion after Sharma gave up his stock options.

Excluding this charge, the company’s net loss narrowed to ₹230 million, signaling improving financial health.

Other highlights from the report:

  • EBITDA excluding ESOP costs turned positive at ₹810 million, compared to a loss of ₹410 million in the previous quarter.

  • Revenue from operations rose 4.6% sequentially to ₹19.12 billion.

  • Financial services revenue (including lending) increased 9%.

  • Payments services revenue grew by 4%.

Looking ahead, Paytm expects ESOP costs to decrease to ₹750 million–1 billion in the April-June quarter, down from ₹1.69 billion, contributing further to its path to profitability.

UPI Faces Fresh Disruption as NPCI Scrambles to Fix Service Outage

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Widespread UPI Outage Disrupts Digital Payments Across India

A significant outage struck India’s digital payment infrastructure on Saturday morning, bringing Unified Payments Interface (UPI) services to a standstill across multiple platforms. Popular payment apps such as PhonePe, Google Pay, Paytm, and BHIM were hit by the disruption, leaving thousands of users unable to complete transactions. The impact wasn’t limited to digital wallets—major banks like HDFC Bank, SBI, Kotak Mahindra, and others also experienced service interruptions. This marks the fourth UPI outage within a month, raising concerns over the stability of the nation’s most widely used payment system.

Reports of the outage began to surface shortly after 11:26 AM IST, with a spike in complaints observed around 1:02 PM, according to DownDetector. The disruption affected a wide range of services, from peer-to-peer transfers to merchant payments, leaving both customers and businesses scrambling for alternatives. With UPI now deeply embedded in India’s financial ecosystem, even short-term service outages have a ripple effect, disrupting everyday transactions and causing widespread inconvenience.

Responding to the issue, the National Payments Corporation of India (NPCI) took to social media to acknowledge the problem. In a post on its official X (formerly Twitter) account, NPCI stated: “NPCI is currently facing intermittent technical issues, leading to partial UPI transaction declines. We are working to resolve the issue and will keep you updated. We regret the inconvenience caused.” The organization has not yet provided an estimated time for resolution.

This latest outage once again highlights the need for greater resilience and redundancy in digital payment infrastructure. As more Indians shift to cashless transactions, the reliability of services like UPI becomes critical.

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.