(Bloomberg) — Paytm reported a better-than-expected quarterly loss as regulatory restrictions curtailed the Indian fintech pioneer’s operations.
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Its parent company One97 Communications said its net loss in the three months to March multiplied to 5.5 billion rupees ($66.1 million). Analysts on average expected a loss of 4.3 billion rupees. Revenue fell 2.6% to Rs 22.7 billion, the first decline since its stock market debut in 2021. The company’s stock price fell more than 1% on Wednesday.
Once a symbol of India’s emerging economy, the payments company has been struggling to recover from a January order by financial regulators to shut down its banking subsidiary. The restrictions have hit Paytm’s reputation and analysts speculate it could lose digital-payments customers to rivals such as Walmart Inc.’s PhoneP.
Paytm, based outside New Delhi, also competes with financial services offered by Amazon.com Inc, Alphabet Inc’s Google and billionaire Mukesh Ambani’s Jio Financial Services.
Paytm’s shares have lost half their value since regulators ordered Paytm Payments Bank Ltd., which processed Paytm’s transactions, to cease major operations due to legal violations. The banking affiliate, known as PPBL, is not under Paytm’s control but is part of founder and chief executive officer Vijay Shekhar Sharma’s fintech empire.
Since then, Sharma has been quick to steady the ship by forging new partnerships with major Indian financial institutions such as Axis Bank, HDFC Bank and State Bank of India. This partnership will help Paytm enhance instant money transfers for its customers by linking banks. with fintech apps. Paytm previously used banking affiliates to run digital wallets and payment traffic.
The company also uses partner banks to clear merchant transactions.
“Due to the disruptions our business faced in the fourth quarter, we expect our revenue and profitability to have a near-term financial impact,” Sharma said in a letter to shareholders. . “This includes the steady-state impact of the suspension of PPBL wallets. We also suspended several other payments and loan products to our customers during the last quarter; We are pleased to share that many of our products have reopened or will be ready to launch soon.”
Read: Paytm’s Sharma says company can overcome setbacks to lead in Asia
Bloomberg Intelligence says
With a long runway and a strong user acquisition funnel through payments, Paytm is poised for a strong recovery in sales and profit margins in FY2026 from its past run-ins with regulatory issues. While the company’s share of digital payments in India is not as dominant as Walmart’s PhonePe or Google Pay, it remains stable and could help it reach its 500 million user target. Regulatory issues should be alleviated by new licenses for its bread and butter payments, and system optimization and its integrated services are set to increase the sector’s margins. Loans, insurance and advertising could drive sales for the Ant Financial-backed company.
-Nathan Naidoo, Analyst
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–With assistance from Vlado Sabov.
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