Paytm’s ambition to post the first profitable financial report by FY21 may not be a cakewalk as the current scenarios suggest a tough road ahead for the Berkshire Hathaway and SoftBank-backed company.
If we were surprised by its losses surged by 78% to Rs 1,604 crore in FY18, then the last fiscal has more losses to be discussed.
Paytm has reported a loss of Rs 4,217.20 crore on a consolidated basis for the financial year ended March 2019. This is 162.9% surge in losses as compared to the previous fiscal.
Moreover, the $15 billion valued company has posted a mere 5.89% increase in revenue to Rs 3232.01 crore in FY19.
The annual report quoted by BloombergQuint was sent out by Paytm to shareholders.
As far as expenses are concerned, they surged to Rs 7,730 crore in FY19, compared to Rs 4,864 crore a year ago. Paytm also saw debt levels rise during the year to Rs 695.4 crore in FY19 from Rs 241.6 crore in FY18.
Entrackr couldn’t independently verify the financial figures as the company is yet to file its annual report on MCA. We have sent a query to the company and will update the story as and when the answer comes in.
The annual report also raised questions on Paytm’s forecast for FY20, where it expected the losses figure would be reduced to Rs 2,100 crore from an estimated Rs 870 crore in FY19.
Paytm cites huge capital expenditure in creating a brand and establishing its business activity behind considerable losses in the fiscal year. It expects a better turn over in the coming fiscals on the back of payments bank, insurance, broking, travel ticketing, hotel, and mobile wallet.
Meanwhile, Paytm is planning for an initial public offering (IPO) in the next 22-24 months. According to Vijay Shekhar Sharma, when the firm is comfortable in issuing bonds that can be sold in five years, then it will go for public listing.
Looking at its financial performance in FY19, Sharma’s claim to go public seems to be a far fetched.
Update: The headline has been updated reflecting that Paytm revenue was recorded at Rs 3,232 crore.