Davos 2023: Paytm will become profitable by Sept this year, says CEO Vijay Shekhar Sharma

Fintech behemoth Paytm will become profitable much before the September quarter this year driven by the growth in credit disbursements, said Vijay Shekhar Sharma, Founder, Paytm, in conversation with Siddharth Zarabi, Managing Editor, Business Today Television at World Economic Forun (WEF) in Davos.

“I formally put September of 2023 as a quarter which is going to be profitable. This will happen way earlier than the timeline that I'm telling you.  We are very proud to say this is happening by not sacrificing any investment that we are making or any growth that we could have captured. We are making all investment and we are seeing the growth,” said Sharma.

Sharma explained how the lending business has evolved in India from PSU banking model, private bank model, and NBFC model to the small finance bank model. Now, the digital lending guideline has brought credit to the country's new customers who were potentially able to be served by previous ones but remain underserved. Digital lending addresses that market. “The best part here is the regulator has put the guidelines which are long-term sustainable into the ecosystem,” said Sharma.

What part of the growing business will drive profitability? “Payment will drive scale and credit disbursement that we are working with our partners will demand drive profitability. I can say the next two- to three years this is the model and I can also say one more thing. We have created a Japanese payment company. It uses ATMs technology. I'm very proud to say India's technology goes to the world and proves that it can build the payment system in other parts of the world,” said Sharma.

On what he wants to convey to investors who have seen the Paytm stock hammered over the last two years, Sharma said, “Paytm addresses one of the opportunities that we all as customers are using which is called payments, and Paytm addresses an opportunity which we all as a citizen of country need which is the credit to the last mile. Paytm makes both of those combinations in an incredibly large revenue pool and in a profitable way.” 

Currently, consumer engagement on Paytm Super App, with average monthly transacting users (MTU), is at 85 million for the quarter ended December 2022, up 32 per cent year-on-year (YoY). The number of merchants paying subscriptions for payment devices has reached 5.8 million as of December 2022, an addition of 1 million devices in the quarter ended December 2022. Moreover, merchant payment volumes (GMV) for the quarter ended December 2022 at Rs 3.46 lakh crore ($42 billion), YoY growth of 38 per cent.

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