SUMMARY
The company’s revenues increased to INR 3050 Cr in FY19
With a 2% hike in revenue, its expenses increased 54% in FY19
Paytm recently raised $1 Bn led by T Rowe Price
Adding to the string of losses for major Indian startups, Noida-based digital payments company Paytm’s parent One97 Communications has reported yet another year of heavy losses for its FY 2018-19.
The company filings, reported by Livemint based on Paper.vc data, shows that the company saw a 2% increase in revenues while its expenses jumped by 54% leading to 2X increase in losses for the year ending March 31, 2019.
The report said that the company’s revenues increased to INR 3050 Cr from INR 2987.41 Cr in FY18. At the same time, the company’s losses went up to INR 3960 Cr in FY19, as against INR 1491.23 Cr in FY18.
Further, in terms of expenses, One97 Communications spent INR 7254.8 Cr in FY19, as against INR 4718.5 Cr in FY18. As usual, most of the expenses were categorised under INR 6534.71 Cr, while employee benefit expenses were INR 627.78 Cr, a 16% Y-o-Y increase.
Founded in 2010, Paytm is one of the first digital payment platforms in India. The company enables payments bank, credit cards, UPI for payments and transactions, ecommerce with Paytm Mall, event ticketing services, wealth management, insurance and gold trading.
The company’s FY19 results came in shortly after Paytm raised $1 Bn in a financing round led by US asset manager T Rowe Price. The round also saw participation from existing investors such as Ant Financial and SoftBank Vision Fund, and Discovery Capital.
Notably, earlier in September 2019, reports surfaced that One 97 Communications and its group companies have together widened its losses by 162% in FY19. The report said that the Paytm’s consolidated net loss was INR 4,217 Cr for FY19. This is nearly 162% jump compared to INR 1,604 Cr net loss in FY18.
Further, in October 2019, Vikas Garg, deputy CFO, Paytm said that the company’s contribution margin has grown to profit of 12% of the revenue. Garg also said that the company has recorded a gross transaction value (GTV) of $100 Bn, up from GTV of over $50 Bn, while clocking 5.5 Bn transactions in FY19.
Garg said that the company has seen 15% quarter-on-quarter growth for FY20. With this the company also expects to significantly lower its losses for FY20. Garg also said that in the last two quarters, the company has seen over a 10% reduction in total costs. He added that focus on the merchant payments have given the company lower costs and higher revenue growth.
Garg further said that the Q-o-Q growth of the group, including all its subsidiaries, is much higher than 15% of One 97 Communications.
It is to be noted that One97 Communications is looking for IPO of Paytm, but founder and CEO Vijay Shekhar Sharma has said that the company will start preparations for IPO within two years. Paytm chief said he wants the firm to generate more cash before entering the public market.
Hence, how One97 Communications and its group companies chart the way to revenue generation remains an interesting watch.
