Shares of One 97 Communications, the parent company of Paytm, climbed on February 7 after the company’s December quarter earnings performance enthused investors.
As of 11.55am, the stock traded up 10 percent at Rs 613 on the BSE.
Paytm’s revenue surged 41 percent to Rs 2,062 crore in the December quarter (Q3), compared to the year-ago period, while net loss narrowed to Rs 392 crore, according to a regulatory filing.
The digital payments and financial services company's loss in the corresponding period last year was Rs 778 crore, whereas it stood at Rs 572 crore in the September quarter, Paytm said.
In a letter to shareholders, Paytm founder and CEO Vijay Shekhar Sharma said that the company had achieved operating profitability in Q3, which is three quarters ahead of the guidance which was for the September quarter.
"This has been made possible due to the relentlessly focused execution by our team. The team was asked to focus on growth with quality revenues that contribute to the bottomline. We have achieved this milestone without losing sight on growth opportunities and keeping all compliances as well as risk factors under a strict watch," he said.
Paytm said that its EBITDA before deducting employee stock option (ESOP) cost, a proxy metric that the new-age companies use to define operating profitability, came in at Rs 31 crore in Q3.
Analysts were also upbeat on the counter.
JP Morgan said the numbers were a “surprise” and it maintained an overweight stance in the stock. The broker has a target at Rs 950 on the stock.
YES Securities was ‘neutral' on the stock with target at Rs 600 even as it sees loan distribution business serving to enhance both revenue and margin.
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