One97 Communications Ltd, the parent of Paytm, nearly tripled its losses in the year ended 31 March as it spent more on building its brand and expanding its business.
On a consolidated basis, the company’s loss widened to₹4,217.20 crore in the year ended 31 March from ₹1,604.34 crore in the year-ago period, according to the Noida-based firm’s annual report, a copy of which was reviewed by Mint.
According to a confidential report prepared by investment bank Corporate Professionals Capital Pvt. Ltd for Paytm earlier this year, One97 was expected to report its first profit of ₹207.61 crore in the fiscal year 2021. “One97 Communications may report a profit of around ₹8,512.69 crore by fiscal 2026,” Mint reported in February this year.
The company’s total revenue rose 8.2% to ₹3,579.67 crore in FY19 from ₹3,309.61 crore a year ago. Its expenses nearly doubled to ₹7,730.14 crore in the year ended 31 March from₹4,864.53 crore in the previous year.
“The company has incurred huge capital expenditure in creating a brand and establishing its business activity. We have incurred a considerable amount in various capital & operational expenditures which resulted in losses during the financial year,” the company said in the annual report.
In the report, the company said it is focusing on strengthening its position in various business segments like payments bank, insurance, and insurance broking, travel ticketing, hotel, and mobile wallet services, among others, which it believes “would result into a better turnover in coming fiscal years”.
“The business and consumer confidence is expected to improve in the coming years, geared with a streamlined organizational design, the company intends to grow its businesses. The improvement in consumer sentiment and increased consumer spending through online platforms will enable the growth momentum to pick up,” the company said in the report.
“The management continues to be cautiously optimistic towards the external economic environment and expects consumer demand to become more consistent and robust in the ensuing fiscal years. Further, various policy decisions taken would act as a growth channel for the company which would contribute to increased revenues and higher margins.”
Last month, founder Vijay Shekhar Sharma said Paytm’s valuation has jumped 25% to $15 billion in the latest investment round that saw several employees cash out their shares worth $150 million.
The article was first reported on Livemint.com