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Informist, Tuesday, Oct. 22, 2024

 

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--One 97 Comm: Jul-Sept key fincl svcs customers 600,000 vs 590,000 qtr ago 
--One 97 Comm: Gross merchandise value in Oct-Dec seen up on festive season 
--One 97 Comm: Expect same contribution margin trends to continue 
--One 97 Comm: Contribution margin up on rise in high-margin fincl svc sales 
--One 97 Comm: Contribution margin up on higher payment processing margin 
--One 97 Comm: Jul-Sept contribution profit INR 8.94 bln, up 18% on qtr 
--One 97 Comm: Jul-Sept contribution margin 54%, up 356 bps on quarter 
--One 97 Comm: Jul-Sept fincl services revenue INR 3.76 bln, up 34% on qtr 
--One 97 Comm: Jul-Sept payment services revenue INR 9.81 bln, up 9% on qtr 
--One 97 Comm: Merchant subscriber base 11.2 mln on Sep 30, up 300,000 QoQ 
--One 97 Comm: Jul-Sept net payment margin INR 4.65 bln, up 21% on quarter 
--One 97 Comm: Jul-Sept EBITDA INR (-)4.04 bln vs INR (-)7.92 bln qtr ago 
--One 97 Comm: One time gain in Jul-Sept on sale of movie ticketing ops 
--One 97 Comm default guarantee to cost INR 2.25 bln over time 
--One 97 Comm: Board OKs default guarantee to lenders for loans to merchants 
--One 97 Comm: One time income of INR 13.45 bln in Jul-Sept 
--One 97 Comm Apr-Sept consol revenue INR 31.61 bln vs INR 48.60 bln yr ago 
--One 97 Comm Apr-Sept consol net profit INR 894 mln vs INR 6.48 bln loss 
--One 97 Comm Jul-Sept consol revenue INR 16.60 bln vs INR 25.19 bln yr ago 
--One 97 Comm Jul-Sept consol net profit INR 9.28 bln vs INR 2.91 bln loss 
 

 

By Krity Ambey

 

NEW DELHI – Income from sale of its entertainment ticketing business helped One 97 Communications Ltd. post a profit for the quarter ended September and for the first time since its listing on exchanges in 2021. The company's net consolidated profit for Jul-Sept was INR 9.28 billion, against a loss of INR 2.91 billion in the same period a year ago.

 

Out of four brokerages that had given earnings estimates, only Emkay Global Financial Services Ltd. had seen the company posting a profit. The other three brokerages saw it in the red for Jul-Sept as well.

 

Paytm's parent company made an exceptional gain of INR 13.45 billion in Jul-Sept from the sale of its entertainment ticketing business. The company had sold its ticketing business to Zomato for INR 20.48 billion in August. It is now focussed on strengthening its core payments and financial services distribution, the company had said while announcing the disinvestment.

 

The fintech company's revenue from operations fell 34.1% on year in Jul-Sept to INR 16.60 billion. Sequentially, however, the revenue was up 10.5%, as the company had posted a record-high loss of INR 8.39 billion in the first quarter of the fiscal year. 

 

The revenue from financial services and payment services propelled the company's net sales during the September quarter. Its income from financial services grew 34% on quarter to INR 3.76 billion, and that from payment services rose 9% from Apr-Jun to INR 9.81 billion. 

 

The company's contribution margin inched to 54% in Jul-Sept from 50% in Apr-Jun due to greater payment processing margin and growth in high-margin financial services revenue. The contribution profit also jumped 18% sequentially to INR 8.94 billion. "We expect the same contribution margin trends will continue," the company said. 

 

Considering the sequential growth in revenue, higher contribution margin and reduction in indirect costs, One 97 Communications' operating loss, as determined by earnings before interest, taxes, depreciation, and amortisation, shrank to INR 4.04 billion. 

 

The company's net payment margin also increased 21% on quarter to INR 4.65 billion, largely due to improvement in payments processing margin, better device realisation, and 5% growth in gross merchandise value. 

 

"We continue to expect payment processing margin (including Unified Payment Interface incentive) to be in the range of 5-6 basis points for the year (2024-25)," the company said. It also anticipates the gross merchandise value growth to accelerate in Oct-Dec because of the festival season. 

 

Most of the metrics of the company, still down on year, have improved sequentially, as the June quarter bore the maximum impact of the operational restrictions on Paytm Payments Bank imposed by the Reserve Bank of India 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. At 1321 IST, shares of the company traded 4% lower at 700 rupees on the National Stock Exchange of India Ltd.

 

The company's merchant subscriber base jumped to 11.2 mln as of September, around 300,000 more than the base in Apr-Jun. It added 10,000 financial services customers as well in Jul-Sept.

 

On a cumulative basis, the consolidated profit was INR 894 million in Apr-Sept, against a loss of INR 6.48 billion a year ago. The consolidated revenue, on other hand, was down 35% on year at INR 31.61 billion in the first half of the fiscal year.

 

As part of its plan to focus on core payments and financial services distribution, One 97 Communications has started offering merchant loans with default guarantees. The board has approved INR 2.25 billion to implement the Default Loss Guarantee model.  End

 

Edited by Akul Nishant Akhoury

 

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