Paytm’s Core Parameters Improving, Widening Loss Remains a Concern

ET Intelligence Group: One97 Communications, which provides payment and financial services on the digital platform under the Paytm brand, reported a strong sequential and year-on-year revenue growth for the September quarter. This was on account of a sustained momentum in payments and financial services (PFS) and improvement in commerce and cloud services (CCS) due to rise in travel and entertainment expenditures.

While its revenue parameters tend to improve, investors waiting to see the company turn profitable will have to wait a little longer as the net loss has widened in each of the first two quarters of the current fiscal year from the year-ago comparable periods. Given the rising marketing and employee expenses, the full-year loss is likely to exceed the net loss of Rs. 1,701 crores in the previous year.

One97, which was listed on bourses on November 18 after a mega IPO of Rs. 18,300 crores, reported quarterly numbers to the exchanges on Saturday. Among the positive highlights of the quarterly performance, the company showed improvement in non-UPI payment usage, which may allay concerns over rising competition from other payment platforms. In addition, the contribution profit, a not GAAP parameter, improved nearly services times year-on-year while the contribution margin expended to 24% from 5.7% year-ago.

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