Paytm’s big bounce-back: What took Vijay Shekhar Sharma so long to turn in profits?

Paytm turns profitable: One97 Communications, the parent company of payment services provider Paytm, turned profitable for the first time since listing in the September quarter of the current financial year after posting losses for 12 quarters in a row, data from stock exchanges showed. The Vijay Shekhar Sharma-backed Paytm reported a net profit of Rs 928 crore in the second quarter of the current financial year as against loss of Rs 838 crore in the previous quarter and a loss of Rs 290 crore in the same period last year.

The profit came after the company realised an exceptional gain of Rs 1,345 crore on account of the sale of its movie ticketing business and events business to Zomato . However, its loss before exceptional item narrowed sharply to Rs 407 crore as against Rs 839 crore in the previous quarter.

Paytm's revenue from operations however declined 34 per cent annually to Rs 1,659.50 crore from Rs 2,518.60 crore but it increased sequentially from Rs 1,501.60 crore.

In a move to streamline its operations, Paytm sold its movie and event-ticketing arm to Zomato for Rs 2,050 crore in August. The company is now concentrating on its struggling payments and financial services business.

Earlier this year, Paytm Payments Bank was shut down by the Reserve Bank of India due to compliance issues, raising concerns over Paytm’s digital transactions and loans segment, which led to a sharp drop in its stock value.

However, in May, Paytm projected "meaningful" revenue and profitability improvements for the second quarter. The company reported a 9 per cent sequential growth in payments revenue to Rs 981 crore, while financial services revenue surged by 34 per cent to Rs 376 crore.

Paytm shares came under sharp selling pressure after earnings announcement and fell as much as 7.74 per cent to hit an intraday low of Rs 669.65 on the BSE.