Earnings Outlook
One97 Comm loss seen shrinking; 1 brokerage firm pegs PAT
This story was originally published at 16:08 IST on 17 October 2024
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By Krity Ambey
NEW DELHI – Brokerages seem to diverge on the Jul-Sept financial results of One97 Communications Ltd. While three brokerages see the company's loss shrinking on account of cost optimisation, Emkay Global Financial Services Ltd. expects it to post profit--for the first time since its listing on the exchanges in 2021--due to a rise in other income.
The three brokerages estimate the net loss to be in the range of INR 5.76-6.78 billion. Meanwhile, Emkay Global expects a profit of INR 6.68 billion in Jul-Sept. Paytm's parent company posted an all-time high loss of INR 8.39 billion in the quarter ended Jun 30.
In Jul-Sept 2023, the company had posted a loss of INR 2.91 billion. If the estimates of the other three brokerages stand accurate, this will be the twelfth consecutive quarter that the company will report a net loss. The fintech company is scheduled to announce its earnings for Jul-Sept on Tuesday.
"A one-off gain from the sale of entertainment business could turn Paytm into net profit positive," Emkay Global said in its report. One97 Communications sold its entertainment ticketing business to Zomato for INR 20.48 billion in August. It is now focussing on strengthening its core payments and financial services distribution, the company had said while announcing the disinvestment.
Paytm Payments Services Ltd, a subsidiary of One97 Communications, will also resubmit its application for a payment aggregator licence soon, the company said. It received the government's approval for downstream investment from One97 Communications in August.
One97 Communications' consolidated revenue from operations is expected to recover to INR 16.26 billion in Jul-Sept, as per the average of estimates from the four brokerage firms, after falling 35.9% in Apr-Jun to INR 15.02 billion. The fintech company's net sales dropped after the Reserve Bank of India imposed operational restrictions on Paytm Payments Bank in January.
Owing to continued non-compliance with regulations and significant supervisory concerns, the RBI had put restrictions on Paytm Payments Bank. The move impacted the company's other operations, including the widely-used Unified Payments Interface application Paytm. After declining over 35% post the RBI's action, One97 Communications' share price has recovered closer to the level in January. On Thursday, shares of the company traded 2.6% higher at 703.15 rupees on the National Stock Exchange of India Ltd.
Following are the Jul-Sept earnings estimates of One97 Communications based on reports compiled by Informist from four brokerage houses:
| Brokerage Firms | Net Sale (in INR million) | Net Profit (in INR million) |
| Dolat Capital Market Pvt Ltd | 16,262.00 | (-)5,757.00 |
| Emkay Global Financial Services Ltd | 16,465.00 | 6,676.00 |
| Motilal Oswal Financial Services Ltd | 16,155.00 | (-)6,603.00 |
| YES Securities (India) Ltd | 16,172.00 | (-)6,784.00 |
| Average | 16,263.50 | -- |
End
Edited by Vidhi Verma
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