Register now for FREE and unlimited access to reuters.com
NEW DELHI, Nov.27 (Reuters) – India’s One 97 Communications Ltd (PAYT.NS), parent company of fintech company Paytm, said on Saturday that its net loss for the three months through September was expanded by 8.4% as spending increased.
Paytm, which reports profits for the first time since its stock market debut this month, reported a consolidated net loss of 4.74 billion rupees ($ 63.2 million) against 4.37 billion rupees during from the same period a year earlier.
Revenue increased 49.7% to 11.35 billion rupees.
“We have maintained the growth momentum of our payment services business, aggressively developed our financial services business and we are on track to achieve pre-COVID volumes for Commerce and Cloud services,” Paytm said. in a press release.
Paytm, which counts Chinese group Ant and Japanese group SoftBank Corp (9984.T) among its backers, raised $ 2.5 billion this month in the largest initial public offering (IPO) in India, but made a dismal start on the stock market last week.
The title has recovered part of its losses but remains 17% below its issue price.
“Paytm faces serious challenges in its customer acquisition engine, which would slow its revenue growth in the basic payments industry,” brokerage firm JM Financial said in a note to clients a day before. Paytm profits. “We find the valuations rich and the path to profitability strewn with high execution risks in the context.”
The company said the gross value of its merchandise from transactions other than a state-backed peer-to-peer payments network, commonly known as UPI, increased 52% in the quarter compared to the previous year. last year.
Paytm competes with Google (GOOGL.O) and Walmart Inc (WMT.N) PhonePe in the Indian digital payments market, and all of these companies offer peer-to-peer payments on UPI.
The company said it was “well funded” with a cash equivalent and an investable balance of Rs 110 billion, including through the IPO.
Founder and CEO Vijay Shekhar Sharma said investors will need time to understand the business of the company.
“Some of the positions in our payments business are not only generating profits, but also free cash flow,” Sharma said on a call to investors. “Our revenues and contribution margins are increasing thanks to the payments and financial services business where payment itself is the primary driver. “
Its commerce, cloud and financial services activities had huge potential to make more money for the company, said Madhur Deora, chief financial officer of Paytm Group.
Paytm has had “a tremendous opportunity to increase payments” as a means of acquiring more customers and merchants, added Sharma.
Founded in 2010 as a platform to add credit to mobile phones, Paytm grew rapidly after US ridesharing company Uber Technologies Inc (UBER.N) listed it as a fast payment option. in India. Its use surged in 2016 when India suddenly banned high-value banknotes, spurring digital payments.
Paytm, headquartered on the outskirts of the capital New Delhi, offers services such as merchant payments, insurance and gold sales, movie and flight ticketing, as well as bank deposits and remittances.
($ 1 = 75 0400 Indian rupees)
Reporting by Sankalp Phartiyal and Nupur Anand Editing by William Mallard and Mark Potter
Our Standards: Thomson Reuters Trust Principles.