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Informist, Monday, Jul. 21, 2025

 

By Krity Ambey

 

NEW DELHI – The prospects of One 97 Communications Ltd. posting a profit in the quarter ended June appear brighter than even before, as three out of four brokerage firms anticipate a profit for the company. The Paytm parent has been in black only once--in the September quarter 2024 after selling its ticketing business--since its listing on the stock exchanges in 2021. 

 

Three brokerage firms expect the fintech company to post a profit in the range of INR 24 million to INR 189 million, with Motilal Oswal Financial Services Ltd's estimate on the lower end and that of JM Financial Institutional Securities Pvt. Ltd. on the higher end. On other hand, YES Securities (India) Ltd. has estimated that the fintech company will make a loss of INR 165 million. 

 

YES Securities expects the company's total expenses will grow 5% on quarter, and this would outpace its revenue growth, pegged at 2% on quarter, resulting in a loss. If these metrics hold, One 97 Communications' June quarter loss would show a sharp fall of over 90% from the loss it had reported sequentially as well as in the corresponding quarter a year ago.

 

One 97 Communications, which will release its financial results for the June quarter on Tuesday, had reported a loss of INR 5.40 billion in the quarter ended March due to exceptional expenses on account of accelerated charges on cancellation of employee stock ownership. The company's founder and Chief Executive Officer Vijay Shekhar Sharma had voluntarily forgone all 21 million ESOPs granted to him. 

 

According to the average of estimates from four brokerage firms, the fintech company's consolidated revenue from operations is expected to marginally improve to INR 19.32 billion in the June quarter from INR 19.12 billion in the March quarter. The company had net sales of INR 15.02 billion in the year-ago quarter.  

 

The year-ago quarter was an exceptionally poor quarter for One 97 Communications, with an all-time high loss of INR 8.39 billion, as the effect of the Reserve Bank of India's regulatory action on Jan. 31, 2024, showed prominently on the company's finances. The company's revenue had fallen 36% in the June quarter last year after the RBI imposed operational restrictions on Paytm Payments Bank in January owing to continued non-compliance with regulations and significant supervisory concerns.

 

The regulatory action had impacted the company's widely used Unified Payments Interface application, Paytm, as monthly transaction users fell over 20% to 71 million. At the end of March quarter, Paytm's monthly user transaction had recovered and was 72 million. The fintech company got the approval to start onboarding new users for its app in October 2024.

 

The company had posted average quarterly revenue of INR 25 billion for a year before it was hit by the regulatory action. With brokerage firms estimating revenue of around INR 19.32 billion in the June quarter, the company still appears far from the revenue levels seen before the RBI had imposed restrictions.

 

However, the company's share price, which had fallen over 50?ter the RBI's action to a low of INR 317.45, has not only rebounded but also fared better. On Monday, shares of One 97 Communications ended at INR 1,017.70 on the National Stock Exchange, 1.6% higher.

 

Of the seven research reports on the stock available with Informist, five have a 'buy' rating on One 97 Communications, with a target price in the range of INR 960 to INR 1,100. YES Securities has rated the stock 'add' with an INR 975 target price while Motilal Oswal Financial Services Ltd has rated it 'neutral' with a target price of INR 879. 

 

Following are the Apr-Jun earnings estimates of One97 Communications Ltd. based on reports from four brokerages in descending order of the estimate of net profit:

 

Brokerage Firms	Net Sale (in INR million)	Net Profit (in INR million)
JM Financial Institutional Securities Pvt. Ltd.	19.11	189
Dolat Capital Market Pvt. Ltd.	19.71	105
Motilal Oswal Financial Services Ltd.	18.96	24
YES Securities (India) Ltd	19.51	(-)165
Average	19.32	--

 

End

 

Edited by Akul Nishant Akhoury

 

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