Paytm has reported a consolidated loss of ₹644.4 crore for the first quarter ended June 30
Paytm has reported a consolidated loss of ₹644.4 crore for the first quarter ended June 30
Digital payments company One97 Communications Ltd., which operates under the Paytm brand, does not affect the price at which its stock trades but management is making efforts to make the firm profitable, its MD and CEO Vijay Shekhar Sharma said. Shareholders have been informed.
According to participants who attended the meeting, while speaking at the Annual General Meeting (AGM) of the company, he said that till 2018-19, the company was in expansion mode and it entered into monetization mode from 2019-20.
Mr Sharma said as the company has done earlier, Paytm will post operating profit in the quarter ended September 2023.
“The share price movement is not affected by us. There are many factors. Profitability of the company plays a very important factor in this. Growth of the company plays an important role in this but both of them are not the only factor for the share price.
“Macro, micro, international investors and many other sentiments play a role in share prices,” Mr. Sharma said.
Responding to shareholders’ queries, he said that the management is making efforts to ensure that the company registers growth and generates strong profits to expand the business.
Shareholders of One97 Communications Ltd. asked the management about the profitability path and to bring the share price back to the IPO level of Rs 2,150. The stock closed at ₹771 on Friday.
While the majority of shareholders who spoke during the AGM expressed confidence in the company’s business model, some expressed displeasure over the loss of One97 Communications and the drop in the share price.
One shareholder Manjit Singh said Paytm has a good business model and the brand is visible but the share price is far below the IPO level, which the company should look into.
Another shareholder, Bimal Kumar, asked about the employee retention rate, the timeline for break-even and the company’s valuer, who priced the share at ₹2,150.
Shareholder Santosh Kumar Saraf, expressing confidence in the company’s business growth, asked the company to increase the female employee ratio in the company and settle old disputes related to 2013-14.
Shareholder Lokesh Gupta asked the reason for the loss when the management was drawing a higher salary and asked the firm to cut costs.
Other shareholders asked about the company’s expansion plans overseas and margin position in the business.
Mr Sharma said the company makes money in the range of 4 paise to 14 paise per ₹100 on every transaction and in some cases, like FASTag, it goes up to ₹1.
“Wherever we have installed the sound box, we get a subscription fee. When the number of devices increases, the payment increases, it is profitable,” said Mr. Sharma.
He said that Paytm has around 30 million merchants and the company believes that the services need to be extended to more merchants, for which the marketing team is spending.
“This expense may seem like a loss at present, but it is going to give good returns in the long term,” he said.
Mr Sharma also said that the company will look at overseas expansion once India is cash flow positive.
Paytm President and Group CFO Madhur Deora said the job loss rate in the company ranges from 2 to 2.5% per month.
Paytm has reported a consolidated loss of ₹644.4 crore for the first quarter ended June 30. The company had reported a net loss of ₹380.2 crore a year ago.
The company said its contribution profit, which does not include tax and marketing expenses but includes promotional incentives, tripled to ₹726 crore in the June 2022 quarter, from ₹245 crore in the year-ago period.
Consolidated revenue from operations grew 89% to ₹1,680 crore as against ₹891 crore in the prior quarter.