One97 Communications, the parent company of Paytm, reported its first full year of profitability (EBITDA before ESOP) at ₹559 Cr. However, FY24 results were mixed, with a 25% YoY revenue increase to ₹9,978 Cr dampened by temporary disruptions in Q4FY24 that led to a 3% decline.

Looking ahead, Paytm is making strategic moves to solidify its position. The company transitioned its core payment business away from Paytm Payments Bank Ltd (PPBL) to partner banks, opening doors for new monetisation opportunities through a multi-bank model. They've already begun onboarding new merchants under this structure.

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"We have successfully transitioned our core payment business from PPBL to other partner banks," said Paytm founder & CEO, Vijay Shekhar Sharma, in the annual shareholder letter. 

Paytm is also implementing a distribution-only credit disbursement model in FY25, aiming to widen its reach, attract more lenders, and simplify regulations. AI-powered solutions are being implemented to streamline operations, targeting annualised savings of ₹400-₹500 Cr. These measures are expected to improve profitability and efficiency.

New avenues for growth

Paytm plans to leverage its vast customer base to tap into the underpenetrated insurance and wealth management sectors. They'll offer innovative products like a combined healthcare, OPD, and hospitalisation insurance plan on a monthly subscription basis. This diversification aims to boost the company's bottom line.

Despite the temporary setbacks, Paytm's core metrics are stabilising. They are already witnessing positive growth in payment GMV since April (excluding digital wallets). The company boasts a cash balance of ₹8,650 Cr, indicating financial stability.

Paytm is confident of a quick turnaround, with EBITDA before ESOP expected to be in the range of (₹500) – (₹600) crore in Q1 FY2025. Their focus on a distribution-only credit model, embedded financial products, and AI-driven efficiency positions them well for long-term, sustainable growth and profitability.

"It has been possible in such a short period of time with extensive support from the Regulator, NPCI, Bank partners and our committed teammates," added Sharma.