Company becomes positive at operations level 3 quarters ahead of guidance. Experts here…pls share yor valuable views on this stock.
Their previous quarter’s performance indicated that they were on the right track. It seems they are not only matching their own guidance but beating it. Nice to see.
Article is misleading, PayTM is not yet EBIDTA positive. They have invented a new matrix, EBIDTA before ESOP cost and are using it to show operational profitability.
This is numbers published by PayTM in newspaper. And as you can see is none of the number published is actually positive. Also interesting is fact that Quarterly numbers look optimistic, but if you look at 9 months number, actual loss this year is almost similar to loss for last year 9 months.
So I have strong suspicion that they are moving around costs, to make some quarter appear rosy. (Suspicion)
Lastly, the company is already having market cap of around 38K Cr, so turning profitable is not sufficient.
Even if we forget profitability, the revenue it is generating is just 2K crs a quarter. So even right now it is valued 4.5 to 5 times its revenue, which is very very rich.
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Not sure about exactly how their overall lending business is structured but taking some notes from the investor presentation…
- Revenue drivers of loan distribution business:
a) Sourcing: 2.5% - 3.5% of loan value
b) Collection: 0.5% - 1.5% of current disbursement value.
Typically received post portfolio closure
They get 2.5- 3.5% just for sourcing the loan. thats a lot of comission and considering their customer base there is a lot of growth opportunity. and obviously I am observing their cashburn has reduced in offers and general operation KPIs also improved in all aspects ( possibility of survivorship bias is always present)
Although there is multiple mentions of their loan disbursals growing multifold YoY there is no mention of the loan book quality (This is where I was saying in the start not sure if paytm assumes risk of the sourced loans). if it doesnt assume risk of the sourced loans then its a great road ahead.
However they mentioned loan quality under the header
Indicative portfolio performance for our partners (1)
Couldnt find the notes related to (1) in the investor presentation. But ECL gone up by 50bps and bounce rates gone up by 100bps but without further information this is hard to breakdown what it means but this only matters if paytm assumes any risk, if thats not the case not a problem to paytm in short-term.
Happy to hear from others.
PS - Obviously most of their offerings failed and the data collected by them till now is what will make or break their lending division and eventually the company as a whole and their whole focus is on lending only and they are hiring heavily in lending which indicates they are confident
But their total income has increased from 36xxx to 59xxx. with consistent loss for the period. that means they should be doing something good isnt it… I mean obviously what you said is also possible but we can breakdown the income and expense and can get a conclusion isnt it
I have different take, even after growing revenue by 60%, loss has remained steady (and not actually decreased) means they are doing something wrong 
exactly unless we see a breakdown its hard to conclude anything.
On Daily, 4H and 3H TF, chart signals end of correction and somewhat positive movement, however breakout or this spike maybe false. Let’s see what happens in few weeks!
To top it all, large institutional investor (most likely Alibaba) continue to sell stake as soon as stock price stabilizes a bit.
Doesn’t look like a sign of company turning around.