Paytm’s efforts at spreading itself into different segments don’t appear to have reaped benefits and instead have resulted in mounting losses in the company. One97 Communications, the parent company that owns Paytm and its other ventures has posted a loss of Rs 4,217.20 crore in the financial year that concluded on March 31, 2019, as per a Mint report.
This is the consolidated loss accrued till that date. However, the worrying part for Paytm would be that this amount stood at Rs 1,604.34 crore same time last year.
The company did post 8.2% rise in its revenue figures closing the year at Rs 3,579.67 crore. However, the expenses skyrocketed from Rs 4,864.53 crore in FY 18 to Rs 7,730.14 crore last year. This seems to be the direct cause of the huge proportion of loss in the year gone by.
The company’s annual report has explained the losses by claiming that the company had incurred heavy capital expenditure in order to establish its brand identity.
Paytm claims the results of these high expenses will be seen in the coming years in terms of higher revenues from almost all the verticals it is present in including the payments bank, insurance and insurance broking, travel ticketing, hotel and mobile wallet services.
The company has gone on to paint a rosy picture of the future. “The business and consumer confidence is expected to improve in the coming years, geared with a streamlined organizational design, the company intends to grow its businesses. The improvement in consumer sentiment and increased consumer spending through online platforms will enable the growth momentum to pick up," Mint quotes the company as saying in the report.
Interestingly, in a confidential report commissioned by the company, an investment bank is said to have predicted that Paytm will start making profits from FY 2020-21 and even predicted the figure, Rs 207.61 crore. The report has further said by the year 2026, Paytm could be generating profits upwards of Rs 8,000 crore.