Paytm Sees 28% Lower Losses Despite Drop In Revenue

SUMMARY

Paytm parent One97 Communications brought down its expenses by 19% to INR 5,861 Cr

Despite fall in overall revenue, the company’s operational revenue has increased marginally

Paytm Payments Bank is its only profitable subsidiary, with INR 29.8 Cr of profit in FY2020

One97 Communications, the parent company of financial services giant Paytm, has cut its losses by 28% in the financial year 2020. Losses fell from INR 3,954 C to INR 2,833 Cr, marking the company’s seventh straight fiscal year in the red, but the drop is a positive sign for the company, which significantly reduced its expenses in the last fiscal.

The company’s revenue for this period has also dropped by a marginal 1% from INR 3,391 Cr to INR 3,350 Cr, however, its share from operations revenue marginally increased from INR 3,049 Cr in FY2019 to INR 3,115 Cr FY2020. One97 managed to cut expenses by 19% from INR 7,254 Cr to INR 5,861 Cr in FY2020, according to the regulatory filings sourced from business intelligence firm Tofler.

Meanwhile, financial services platform Paytm managed to increase its revenues to INR 3,629 Cr with 40% reduction in losses to INR 4,217.20 Cr on a consolidated basis in FY2020. The company increased its revenue stream by expanding its offering from digital payments to lending, health management and insurance.

Besides these features, Paytm has recently launched stock trading on its online investment and wealth management platform Paytm Money. Due to its strong presence, it managed to register over 17 Mn merchant partners benefiting from its payment and financial service.

The Financial Picture Of Paytm’s Subsidiaries

One97 Communications has about eight subsidiaries — Paytm, NS Mobile Technologies, Paytm Ecommerce, Paytm Money Limited, Paytm Mobile Solutions, One97 Communications India, Paytm Financial Services and Paytm Entertainment Limited.

In FY2020, Paytm Mall narrowed down its losses by 60% to INR 479 Cr versus INR 1,171 Cr reported in FY2019. However, the reduction in losses came with a 27% decrease in revenue for the ecommerce company. The company recorded INR 703 Cr in FY2020.

Out of all of One97 Communications subsidies, Paytm Payments Bank (PPBL) is the only profitable one, with a second year of profits. The company said its profit has grown 55% from INR 19.2 Cr in FY19 to INR 29.8 Cr in FY2020, largely led by higher customer acquisition in smaller cities and towns to drive financial inclusion in the country. The annual revenue has crossed INR 2,100 Cr.