Paytm's loan distribution business crosses ICICI Securities' estimates in 2nd quarter

New Delhi: Fintech solutions provider One 97 Communications, which operates the popular payment platform Paytm, continues to witness robust loan distribution growth as it reiterated its focus on maintaining a quality loan book.
The company in its quarterly update said the number of loans disbursed grew 224 per cent year-on-year to 9.2 million loans in the quarter ended September 2022, while the value of loans disbursed grew 482 per cent year-on-year to Rs 7,313 crore (USD 894 million). "We continue to see growth and upsell opportunities in this business, while we work with our partners to remain focused on the quality of the book," the company said on Monday in a stock exchange filing.
In the offline payments vertical, the company continues to strengthen its leadership position with the deployment of 4.8 million devices at merchant stores across the country.
"While the management maintained its commentary around focusing on the quality of the book, the growth continues to be strong. H1FY23 lending disbursements of Rs 129 billion gives us the visibility that Paytm would be able to surpass our estimates of Rs 239 billion disbursements in FY23E," according to an ICICI Securities report seen by ANI.
"With increasing GMV and loan distribution business along with some increase in commerce and cloud business, we estimate 10 per cent quarter-on-quarter operating revenue growth," ICICI Securities said in the report.
Kunal Shah, an analyst at ICICI Securities said in the report that the company's loan disbursements volume is expected at 36.1 million in FY23, against 17.7 million at the end of the first half.
The total number of loans disbursed in September and Q2FY23 were 3.2 million and 9.2 million, respectively, against an estimate of 8.8 million.
In September, the value of loans disbursed grew 15 per cent month-on-month to Rs 28 billion and 32 per cent and 482 per cent (QoQ/YoY) respectively for Q2FY23 to Rs 73.1 billion, which is significantly higher than the analyst's estimates.
Shah of ICICI Securities said this growth indicates an increasing trend in average ticket size.
"Annualised value of loans disbursements comes out to be Rs 340 billion as per September'22 and H1FY23 disbursement value is Rs 129 billion versus our estimates of Rs 239 billion in FY23E," Shah of ICICI Securities added. (ANI)