Shares of Indian digital payments firm Paytm jumped more than 6 percent on Monday to their highest levels in nearly six months, after the company’s parent firm One 97 Communications Ltd posted an 89 percent surge in its quarterly revenue.
Higher number of monthly users, additional payment devices, and more disbursal of loans lifted the company’s revenue to Rs 1,680 crore, from Rs. 891 crore last year.
Investors appeared to show scant response to the company’s wider loss of Rs. 644 crore posted in its quarterly update after market close on Friday.
Paytm, which competes with Google’s payment app and Walmart’s PhonePe in India’s digital payments market, said it is on track to achieve operational profitability by September 2023.
“The notable print in the results was a sharply increased gross margin print in payments business resulting in expansion in contribution margins to 13bps,” JP Morgan analysts said in a note on Monday.
Processing charges of the company, backed by China’s Ant Group and Japan’s SoftBank Group, fell 10.4 percent to Rs. 694 crore sequentially.
“The management clarified that it could negotiate better deals with their bank partners, and rationalised certain low margin online merchant accounts that resulted in lower payment processing charges,” Macquarie analysts said in a note.
Shares of the company were up 6 percent at Rs. 830, as of 06:48am GMT (12:18pm IST).
“Earlier this year, we had shared that we would achieve operating profitability by September 2023, driven by better monetisation, as well as moderating growth in costs. The first quarter of the financial year 2023 results exhibit our strategy is well-in-place, with focused improvement on unit economics, better expense management and an increasing mix of higher margin businesses (such as financial services and commerce) steering us on the path to profitability,” the firm stated on Friday.
For all the latest Technology News Click Here
For the latest news and updates, follow us on Google News.
