One97 Communications Ltd., the parent company of Paytm, reported a net loss of Rs 208.3 crore for the third quarter of fiscal 2025, as compared to a profit of Rs 928.3 crore in the previous quarter. However, the loss was still better than analysts' expectations, with Bloomberg consensus estimates predicting a loss of Rs 332 crore.
The bottom-line marked an improvement over the corresponding period last year, when Paytm reported a loss of Rs 221.7 crore.
Despite the continued loss, the company's revenue showed positive growth, increasing by 10.1% to Rs 1,828 crore for the quarter, surpassing the expected Rs 1,660 crore.
However, it is noteworthy that the net loss is not a very accurate reflection of the company's performance, especially as the net profit from the July-September quarter was largely driven by a one-time gain from the sale of its events and movie ticketing business to Zomato Ltd. This deal, worth Rs 1,345 crore, skewed the comparison for that quarter.
When factoring out one-time gains, Paytm's core operations appear to be improving, as its Ebitda loss narrowed to Rs 222 crore, compared to Rs 403 crore in the previous quarter. The company also reported a loss before tax of Rs 203 crore, improving from Rs 411 crore in the previous quarter.
The company's cash balance stood at Rs 12,850 crore, an increase of Rs 2,851 crore from the previous quarter, largely attributed to the stake sale in PayPay and improvements in working capital.
Post results, Bernstein maintained its 'outperform' rating on Paytm, with a target price of Rs 1,100 per share, indicating a potential upside of 23% from current levels.
The research firm highlighted a solid quarter for Paytm despite the overall gloomy operating environment. Loan disbursals showed a 6% QoQ increase, while the company's continued focus on cost control has brought it closer to profitability.
Gross Merchandise Value nearly recovered to the peak level seen in December 2023, and monthly transacting users reached a key inflection point, rising to 72 million in December 2024, the brokerage noted.
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