Vijay Shekhar Sharma, founder and CEO of Paytm, said on Thursday that the company will prioritize its core payments business and cross-sell financial services as it aims to achieve profitability in the near future.
“The past six months have taught us many lessons, giving us the opportunity to thoroughly examine our business processes, compliance, and the way we operate from the inside out. I can now confidently assure you that we have adopted a compliance-first approach, ensuring our business adheres to every regulation fully, both in letter and spirit,” Sharma said at the annual general meeting 2024.
“With a commitment to the core payments business, we aim to deliver PAT profitability soon,” Sharma said.
In February, the Reserve Bank of India (RBI) instructed Paytm's payments bank subsidiary to halt the acceptance of new deposits into its accounts or popular wallets starting in March.
Sharma mentioned that Paytm plans to apply for a payment aggregator license from the RBI at an appropriate time. The company has also recently received approval for foreign direct investment from the Indian government.
Sharma further highlighted the payment aggregator's focus on achieving profitability and adhering to regulatory compliance, in the AGM meeting on September 12.
"I want to re-state that instead of talking about EBITDA before ESOP, I want to talk about PAT (Profit After Tax). We want to commit to PAT profitability," he said.
Paytm, the payment aggregator, has yet to achieve profitability on a PAT basis. The company posted a net loss of ₹840 crore in the June quarter, after reporting a ₹550 crore net loss in the March quarter of FY 2024.
Sharma emphasized their commitment to achieving profitability "soon" while reassuring investors that the company remains dedicated to being a "compliance-first" organization, both in principle and practice. He also highlighted how the past six months have provided valuable lessons for the company.
In February of this year, the Reserve Bank of India prohibited Paytm Payments Bank from engaging in any banking activities—ranging from deposits and credit transactions to wallet top-ups and bill payments—starting from February 29.
Sharma also emphasized the transformative potential of artificial intelligence (AI), forecasting that it will profoundly affect every industry, with those who embrace it early gaining the most benefits.
In the meeting, where discussions were largely centered around new technology, Sharma emphasized the company's commitment to driving industry leadership with its cutting-edge AI capabilities.
"We, as a nation, have leapfrogged to become leaders in financial technology, and now we have the opportunity and obligation to extend that leadership into AI technology. Paytm aims to lead the industry with our advanced AI capabilities,” Sharma said.
Sharma mentioned that Paytm's AI systems were also active in Japan, aiding in risk management and fraud detection.
"Our risk management and fraud detection systems not only enhance our payment solutions in India but also support one of the largest mobile payment companies in Japan (PayPay), where we are also a potential shareholder. There is strong demand and high expectations for us to continue advancing our AI-powered risk management solutions," he said.
At the AGM, he emphasized that adopting AI technologies early would be essential for companies striving to stay ahead in a fast-changing environment.
"We are still in the early stages of AI. Those who leverage it now will pave the way for long-term success," Sharma said.
