Paytm Changes Business Strategy: Profit Before Tax to be New Benchmark for Profitability

Paytm’s founder, Vijay Shekhar Sharma, announced that the company is shifting its business strategy focus. Speaking at Paytm’s 24th Annual General Meeting (AGM) on Thursday, Sharma revealed that Paytm will now focus on Profit Before Tax (PBT) as its key profitability marker.

Sharma noted that Paytm has undergone significant changes over the past year. The company is transitioning into a merchant-centric platform and is now prioritizing net profit over EBITDA before ESOPs (Employee Stock Ownership Plans).

Focus on Building a Sustainable Business

Sharma further explained that Paytm plans to apply for a payment license in the near future. The company’s focus will be on payments and cross-selling financial services. Sharma emphasized that Paytm is committed to creating a profitable and sustainable business that generates positive cash flow.

He added that Paytm will make a significant impact on the payments industry through advanced merchant technology. The company is dedicated to meeting India’s needs and will integrate AI as a critical component of its business strategy.

Comprehensive Business Model for Merchants

Over the past year, Paytm has transformed its platform into a comprehensive business model tailored for merchants. Sharma mentioned that the company has conducted a full review of its business and compliance processes. He also predicted that India’s merchant base would reach 100 million in the coming years.

Collaboration with Banks and NBFCs for Lending

Sharma highlighted Paytm’s partnership with banks and non-banking financial companies (NBFCs) to provide loans to merchants. This collaboration not only supports the growth of small businesses but also generates revenue for Paytm through merchant loan services, strengthening the company’s business model.

Key Points:

Paytm is shifting its focus to Profit Before Tax (PBT) for profitability.

The company is transitioning into a merchant-centric platform.

Paytm aims to build a sustainable, cash-flow-generating business.

AI will be a significant part of the company’s business strategy.

Paytm has partnered with banks and NBFCs to provide loans to merchants.

Paytm’s stock has seen fluctuations, with a notable decline over the past year.

By focusing on long-term sustainability and leveraging advanced technology, Paytm aims to strengthen its position in the payments industry and support the growth of small businesses across India.