Paytm’s loss widens to Rs 473 cr in Q2 FY22: Should you buy, hold or sell?

New Delhi: Paytm’s parent One97 Communications on Saturday (November 27) reported a consolidated loss of around Rs 473 crore in the second quarter of the current fiscal. The company said the loss was due to increase in payment processing fee.

According to the exchange filing of the fintech company, Paytm had a loss of Rs 436.7 crore in the same quarter last year. At the same time, in Focus, the company’s consolidated total income increased by 49.6 percent to Rs 1,086.4 crore during the quarter. In the corresponding period of FY 2011, Paytm’s revenue was Rs 663.9 crore.

“We have improved our spends with continued and increasing investments in technology and merchant base expansion. Clearly, the monetization and focus on the non-UPI business is reflected in our results and costs. We continue to innovate and drive across India’s payments. Committed to investment and inclusion of financial services,” said a Paytm spokesperson.

“Our focus is on continued customer and merchant expansion, and to capitalize on the opportunities presented by the Indian Internet ecosystem and strengthen our business capabilities to drive rapid adoption of financial services,” the spokesperson said.

Meanwhile, JM Financial Institutional has commenced its coverage of Paytm’s parent firm One97 Communications Ltd with a sell rating. The brokerage firm has reduced the target price of the company to Rs 1240 per share from Friday’s closing price of Rs 1783 per share.

JM Financial was quoted as saying, “Paytm is facing tough challenges in its customer acquisition engine, which will slow its revenue growth in the core payments business, while its associated ecosystem businesses (commerce, cloud and financial). services) leaves much to be desired.” According to Mint.

In our view, Paytm will need to continue funding for its MTU growth and thus its path to profitability largely depends on the growth trajectory of other businesses”, said the brokerage firm. Also read: Black Friday Sale: Beware! Fraudsters can take your money using this trick; Here’s how to stay safe

Earlier, Macquarie Research has launched its coverage on Paytm with a sell target price of Rs 1200, which is 40% lower than the issue price of Rs 2,150 of the share. Read also: Bank Holiday in December 2021: Banks to remain closed for 12 days; View full list here

(Disclaimer: The views/suggestions/advice expressed in this article are solely by investment experts. Zee News Digital advises its readers to consult their investment advisors before taking any financial decision.)

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