Paytm’s Losses Are Surging At Alarming Rate!

Must Read

Superstitions across different countries – An Overview

Some believe that a superstition is anything that people believe that is based on myth, magic, or irrational thoughts. They are beliefs that are steeped in lore or tradition, and it is usually difficult to pinpoint the exact origin. Here is a brief compilation of Superstitions which are prevalent across different countries.

1.5 Million Engineers Pass Out In India Every Year, Fewer Getting Hired [Trends]

Engineering colleges have been springing up like wild mushrooms in India in the last few years. Their number has...

World’s Most Popular Ad Slogans: A Brief List To Inspire With !

Advertisement plays an important role for companies as well as consumers world wide. It gives a seller an opportunity...

Despite all the claims, new announcements and revised strategy to tap the market more effectively, Paytm’s loss has been mounting at an alarming rate. A recent report submitted to the shareholders of One97 Communications Ltd, the parent company of Paytm, highlights the company’s financial performance In FY’19.

Over the last decade Paytm has been expanding on an exponential rate. Paytm’s parent company One97 Communications Ltd. has emphasized the company’s growth to compete with its rivals in the eCommerce and digital payment sector. Recently Paytm expanded its business to the education sector and is rapidly approaching the health sector too.

Backed by Berkshire Hathaway and SoftBank, Paytm expressed its ambition to post its first profitable financial report by Financial Year 2021. But the current report portrays a different scenario.

Advertisements

For the past two years Paytm has seen extensive surges in its losses. From 78% surge in FY18 to Rs 1,604.34 crore to a loss of Rs 4,217.20 crore in FY’19. This translates to a 162.9% YoY surge as compared to the previous fiscal year. While the losses of Paytm has been increasing at an alarming rate, Paytm’s revenue performance makes the scenario little more worrisome. The company has recorded an 8.2% YoY increase in revenue to Rs 3,579.67 crore in FY19.

To put simply, for every one rupee earned in revenue, the company spend Rs 1.30, on an average. This resulted in a loss of Rs. 11.4 crore every day in FY’19.

Moreover, according to the company’s annual report, expenses and debts have risen significantly too. The $15 billion company reports that its expenses rose by 37% from Rs 4,864 crore last year to Rs 7,730 in FY’19, while debts increased 34.7% from Rs 241.6 crore in FY18 to Rs 695.4 crore in FY19.

But the management of One97 is optimistic about future performance. Despite intensifying competition Paytm is expecting to turn the table in the next 2 years. The company has given a projection of reducing its losses by half to Rs 2,100 crore in FY’20.

The management of the company, however, expects to make a comeback to report its first profit of Rs 207.61 crore in FY21. One97 may go on to report a profit of around Rs 8,512.69 crore by FY26.

Advertisements

It is obvious that Paytm’s growing losses are a foreseen effect of its parent company’s aggressive expansion plans to tackle other E comm giants like Amazon and Wallmart. While still the market leader in digital payments, Paytm is facing losses in the retail business. It can only be expected that the Vijay Shekhar Sharma led company has plans to push its ambitions to the top of the hill.

Paytm founder Vijay Shekhar Sharma has recently stated that the company is gearing up to launch its IPO. Mr. Sharma has revealed that preparation for the IPO will be commenced in the second half of 2021 – the year company is aiming to become profitable.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest News

India the 3rd Worst Economically Affected Nation by Internet Shutdowns in 2019: Report

2019 saw an increasing awareness about internet shutdowns in the Indian population due to unprecedented first-hand experience...

Amazon and Flipkart Under The Lens Of Indian Authorities For Competition Squashing Activities!

The ongoing tug of war between Offline and Online retailers in India seems to be far from over. On Monday, the Competition...

Constant Internet Suspensions In India Affecting Online Transactions and Economy Adversely

In the wake of the highly controversial and prejudiced Citizenship Amendment Act and other related legal developments such as the NRC, IT...

The Current Generation Require Technology In Class To Make The Most Of Future Opportunities

Technology is the current drive for everything. It has influenced all aspects of life, including cultures. It affects the way we live,...

Reliance Jio Offers Free Calls Over WiFi: Activate It Now

Following Airtel’s launch of VoWiFi calling in December 2019, Jio has now started rolling out VoWiFi calling, as well.

UPI Scam: A Man Loses Rs. 1.01 Lakhs While Using Paytm and Google Pay

Facebook finds it itself in the middle of its first scam of the new decade and the catalyst seems to be its...

In-Depth: Dprime

YouTube Should Have Bid Adieu To Dislike Button Much Earlier?

Online video sharing platform YouTube can be a ruthless place for content creators targeted by 'dislike mobs'. And the site owners totally understand that...

Facebook Has Pulled Off A Masterstroke By Integrating Its ‘Family Of Apps’?

It’s indeed hard to believe that ONE man sitting at Menlo Park, oversees how nearly a third of the world’s population interacts with each...

Facebook’s Crunch Conquest: By Relying Largely On The US Market, Is Facebook Running a Risk?

Two billion! That's Facebook, Inc. (NASDAQ: FB) for you - Right when you thought that this social-media giant has already connected the entire world, it's...

More Articles Like This