Paytm turns profitable: One97 Communications, the parent company of payment services provider Paytm, turned profitable for the first time since listing in the September quarter of the current financial year after posting losses for 12 quarters in a row, data from stock exchanges showed. The Vijay Shekhar Sharma-backed Paytm reported a net profit of ₹928 crore in the second quarter of the current financial year, compared to a loss of ₹838 crore in the previous quarter and a loss of ₹290 crore in the same period last year.
The profit came after the company realized an exceptional gain of ₹1,345 crore from the sale of its movie ticketing and events business to Zomato. However, its loss before exceptional items narrowed sharply to ₹407 crore from ₹839 crore in the previous quarter.
Paytm’s revenue from operations, however, declined 34 percent annually to ₹1,659.50 crore from ₹2,518.60 crore but increased sequentially from ₹1,501.60 crore.
In a move to streamline its operations, Paytm sold its movie and event-ticketing arm to Zomato for ₹2,050 crore in August. The company is now concentrating on its struggling payments and financial services business.
Earlier this year, Paytm Payments Bank was shut down by the Reserve Bank of India due to compliance issues, raising concerns over Paytm’s digital transactions and loans segment, which led to a sharp drop in its stock value.
However, in May, Paytm projected “meaningful” revenue and profitability improvements for the second quarter. The company reported a 9 percent sequential growth in payments revenue to ₹981 crore, while financial services revenue surged by 34 percent to ₹376 crore.
Paytm shares came under sharp selling pressure after the earnings announcement and fell as much as 7.74 percent to hit an intraday low of ₹669.65 on the BSE.
