Paytm’s parent One 97 Communications has posted a consolidated loss of about Rs 473 crore in the second quarter of the ongoing financial year.
New Delhi: Paytm’s parent One 97 Communications, on Saturday (November 27), posted a consolidated loss of about Rs 473 crore in the second quarter of the ongoing financial year. The company said that the losses were on account of increase in payment processing charges.
In the similar quarter last year, Paytm had posted a loss of Rs 436.7 crore, according to the fintech company’s exchange filing. At the same time, the company’s consolidated total income jumped by 49.6 per cent to Rs 1,086.4 crore during the quarter in focus. Paytm’s revenue stood at Rs 663.9 crore in the corresponding period of FY21.
“We have improved our expenses, with continued and increased investments in technology and merchant base expansion. Clearly, the monetisation and focus on non UPI business is showing up in our results and costs. We are committed to innovation and continued investments in India’s payment and financial services inclusion,” a Paytm spokesperson said.
“Our focus remains on continued customer and merchant expansion, and strengthening our business capabilities to cash in on the opportunities presented by the Indian internet ecosystem and rapid adoption of financial services,” the spokesperson said.
Meanwhile, JM Financial Institutional has initiated its coverage of Paytm’s parent firm One97 Communications Ltd with sell rating. The brokerage firm has cut the target price on the company to Rs 1240 a share from the Friday closing price of Rs 1783 a share.
“Paytm faces stiff challenges in its customer acquisition engine which would slow down its revenue growth in the core payments business while scale-up of its related ecosystem businesses (Commerce, Cloud and Financial Services) leaves much to be desired,” JM Financial was quoted as saying by Mint.
In our view, Paytm will need to keep funding its MTU growth and thus the road to profitability largely relies on the growth trajectory of other businesses”, the brokerage firm added.
Previously, Macquarie Research has initiated its coverage on Paytm with a sell target price of Rs 1200, a 40% downfall from the share’s issue price of Rs 2,150.
