Partner | Explained: How Paytm Managed to Turn Profitable Faster Than Expected

How a Noida-based start up ended up becoming one of India’s fastest growing payments and financial services app.

Explained: How Paytm Managed to Turn Profitable Faster Than Expected

Image courtesy: The Quint.

By now, Paytm has well established itself as India’s most trusted payments and financial services app as well as the pioneer of mobile and QR based payments in India. Paytm hit EBIDTA level profitability of Rs. 31 crores in the Q3 of FY23.

Paytm’s profitability was the consequence of its indirect expenses (including ESOP costs) falling to 49% of revenues driven by improved operating leverage. A year ago, these indirect expenses stood at 58%. Simultaneously, the ESOP costs jumped 32% from Rs 442 crore in Q3 FY22 to Rs 584 crore in Q3 FY23.

The company’s profitability makes for an interesting case study as it not just turned profitable, but it did that earlier than expected with more margin than expected.

To understand how the Noida-based start-up ended up becoming one of the most successful payments and financial services app of its time, here is The Quint’s Sravya M. G. breaking down Paytm’s story of profitability for you.