India’s Paytm September net loss widens, says growth continues

Fintech firm Paytm’s parent company One97 Communications Ltd of India on Saturday said its net loss for the three months to September grew 8.4% due to increased spending. 

Paytm, reporting its earnings publicly for the first time since its stock market debut this month, reported a consolidated net loss of Rs 4.74 billion ($63.2 million) compared to Rs 4.37 billion in the same period a year ago. 

Revenue grew 49.7% to Rs 11.35 billion. 

Paytm’s management said in a statement, “We have maintained the growth momentum in our payment services business, aggressively expanding our financial services business and driving pre-COVID volumes for commerce and cloud services.” Is.” are in.” 

Paytm, which counts China’s Ant Group and Japan’s SoftBank Group Corp among its backers, raised $2.5 billion in India’s biggest IPO this month, but made a disappointing start on stock exchanges last week. 

The stock has recovered some of its initial losses but is down 17% from its issue price.

“Paytm continues to face tough challenges in its customer acquisition engine, which will slow down its revenue growth in the core payments business,” brokerage JM Financial said in a note to clients a day before Paytm’s earnings call. “We find valuations rich and the path to profitability fraught with high performance risks in context.”

The company said transactions other than the state-backed peer-to-peer payment network, known as UPI, increased its gross trading value by 52% compared to the year-ago quarter. 

Google and Walmart Inc. in Paytm’s digital payments market. Competes with PhonePe, and all of them offer peer-to-peer payments over UPI. 

The company said it was “well funded” with cash equivalents and an investable balance of Rs 110 billion, including an initial public offering.

Founder and CEO Vijay Shekhar Sharma has said that investors need time to understand the business of the company. 

Founded in 2010 as a platform for adding credit to mobile phones, Paytm grew rapidly when the U.S. Ride-hailing firm Uber Technologies Inc listed it as an instant payment option in India. Its use increased in 2016 when India abruptly banned high denomination currency notes, thereby promoting digital payments. 

Paytm, which is headquartered on the outskirts of the capital New Delhi, provides services including merchant payments, insurance and gold sales, movie and flight ticketing, and bank deposits and remittances. 

($1 = 75.0400 Indian Rupees)