MUMBAI, May 22 (Reuters): Paytm posted a wider loss in the fourth quarter on Wednesday and warned of further financial impact in the current quarter as the Indian digital payments firm absorbs the full impact of the Reserve Bank of India's (RBI) directive to wind down its banking unit.
The company's consolidated net loss widened to 5.5 billion rupees ($66.08 million) from 1.68 billion rupees a year ago.
It was expected to post a net loss of 3.99 billion rupees in the reporting quarter, a median of three analysts showed, as per LSEG data.
Paytm wrote down the value of its entire investment in Payments Payment Bank Ltd (PPBL) - worth 2.27 billion rupees - considering "future uncertainties" over the latter's business operations, it said in an exchange filing.
The RBI in late January ordered PPBL to stop accepting fresh deposits in its accounts or digital wallets beginning March due to non-compliance with norms.
"Our fourth quarter 2024 results were impacted by temporary disruption on account of UPI (Unified Payments Interface) transition etc and permanent disruption because of PPBL embargo," Paytm said in an exchange filing.
In a statement, the company further said the full impact of that move would be felt in the April-June quarter, when Paytm expects its loss before interest, taxes, depreciation and amortization to be between 5 billion rupees and 6 billion rupees.
"We are confident of seeing meaningful improvement starting from the second quarter," the company said, adding that it was also planning to save between 5 billion rupees and 6 billion rupees in employee costs over time as it becomes a "leaner" organization.
Paytm warns of more financial impact from banking unit wind down
FE Team | Published: May 22, 2024 23:38:57
Paytm warns of more financial impact from banking unit wind down
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