Motilal Oswal's research report on One 97 Communications
Paytm has agreed to sell its entertainment ticketing business to Zomato for INR20.48b in cash, which will allow Paytm to strengthen its focus on its core Payments and Financial Services Distribution business. The combined entertainment ticketing business is projected to generate INR2.97b in revenue and INR290m in adjusted EBITDA in FY24. Paytm earlier built its movie ticketing business from scratch, acquiring Insider and TicketNew for INR2.68b between 2017 and 2018. During the transition period (up to 12 months), movie and event tickets will remain available on the Paytm app, as well as on the TicketNew and Insider platforms, ensuring an uninterrupted experience for users and merchant partners. The transaction is expected to further strengthen the balance sheet for Paytm and will enable the company to focus on its core Payment and Financial business.
Outlook
The sale of its entertainment business would provide a financial boost, as this transaction will generate significant profits for Paytm, allowing it to reinvest in other high-potential areas. Cash proceeds will further strengthen the balance sheet. We estimate Paytm’s EBITDA to turn positive by FY27. We maintain our Neutral rating with a TP of INR550.
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