One97 Communications, the parent of digital payments firm Paytm, posted a wider loss in the fiscal fourth quarter on Wednesday, hurt by weakness in its payments and lending business after the central bank asked the company to wind down its banking unit.
The company’s consolidated net loss widened to ₹550 crore from ₹168 crore a year ago. The loss for the full year of 2024-25 was ₹1,422.4 crore.
Paytm wrote down the value of its entire investment in Paytm Payments Bank Ltd (PPBL) worth ₹227 crore, considering “future uncertainties” over the latter’s business operations.
The Reserve Bank of India, in late January, had ordered PPBL to stop accepting fresh deposits in its accounts or digital wallets from March due to non-compliance with norms.
Paytm said its consolidated revenue from operations fell to ₹2,267 crore for the January-March quarter from ₹2,334 crore a year earlier.
“While we experienced financial impact in fourth quarter, the full financial impact will be seen in first quarter (Q1) of 2024-25. We expect Q1 2024-25 revenue of ₹1,500-1,600 crore and EBITDA before ESOP of (negative) ₹500-600 crore,’’ OCL said. It stood at ₹103 crore in Q4 of 2023-24.
Speaking at a conference call, Paytm founder and CEO Vijay Shekhar Sharma said, “The months of February and March were challenging yet resilient. We have learned valuable lessons in sustainability and proactively paused affected businesses to focus on building a strong, revenue-centric company’’.
Madhur Deora, president and group CFO, said Paytm is focussing on the path to profitability. Focus areas include equity broking and the mutual fund distribution, which continues to scale well. The emphasis will be on the retention of customers by offering a high quality trading platform.
Paytm said it is planning to expand the mutual funds distribution business by leveraging systematic investment plans and other wealth management products through Paytm Services Pvt Ltd (PSPL)
OCL will strengthen the governance structure across Paytm and its group entities by appointing subject matter experts as advisers or independent directors.
Greater regulatory engagement and higher focus on compliance have also been identified as focus areas. It is looking to optimise its cost structure, leverage AI capabilities and concentrate on its core business which should result in significant cost efficiencies.
