Since the beginning of 2019, there have been several reports about how Paytm is changing things around in the cashback empire, and day-by-day the reasons become clearer.
To point out a few, Paytm scaled down the loss-making Paytm Mall business and started focusing on creating an offline presence with O2O functions. It also increased its working capital loan limit from Rs 400 crore to Rs 1,400 crore by hypothecating all its current assets and mutual fund investments to ICICI Bank Ltd.
The end of the financial year 2018-19 is near, but these steps being so recent, are going to have a larger impact on FY 2019-2020. A recent confidential report on Paytm by Corporate Professional Pvt. Ltd. points out how FY20 – FY26 period is going to look for the company, and it all makes more sense.
In the current fiscal, the company has pegged its losses to be around Rs 870 crore. As per the report, these losses are expected to take an over 2.4X jump to around Rs 2,100 crore in FY20, a figure that is even larger than One97 Communication Ltd.’s last reported loss of Rs 1,604.34 crore in FY18.
The fiscal year ending March 2018 had seen Paytm Mall’s losses stand at Rs 1,787.55 crore, which had resulted in the doubling of the company’s overall losses. One97’s FY19 losses seem to be controlled to half the amount, and it can be attributed to the fact that the company started working on its scaling down agenda for e-commerce in the past few months.
However, after this heavy loss high cash burn creating FY20 in which the company plans to expand and stabilise its business, Paytm predicts profitability. In FY21, Vijay Shekhar Sharma, for the first time is expected to be able to announce a profit of Rs 207.61 crore.
This profit is pegged to increase year on year to a Rs 8,512.69 crore figure by FY26.
This report is sourced from Entrackr.