Paytm shares drop 3% ahead of Q3 results; here's what analysts say

Shares of One 97 Communications (Paytm) fell 3 per cent in Friday's trade ahead of its December quarter results. Analysts largely expects the Vijay Shekhar Sharma-led company to report narrowing of loss for the quarter on a 40 per cent-plus growth in sales.  The stock fell 2.71 per cent to hit a low of Rs 531 on BSE.

Among brokerages, Dolat Capital said Paytm Q3 revenues may soar 41.1 per cent YoY to Rs 2,068 crore from Rs 1,456 crore in the year-ago quarter. It sees Paytm loss for the quarter at Rs 503.50 crore against Rs 571.10 crore in September and Rs 778.40 crore in the year-ago quarter. All eyes would be on any commentary on revision in adjusted Ebitda break-even timeline, it said adding that scalability of credit to merchant and users would also be keenly followed.

Paytm may log 46 per cent year-on-year (YoY) jump in revenues at Rs 2,125.70 crore, said ICICI Securities. It sees Ebitda loss narrowing to Rs 488.10 crore from Rs 537.80 crore in September and Rs 787.90 crore in the December quarter last year.

To recall, Founder Vijay Shekhar Sharma last month told Business Today Television that his company could turn Ebitda positive by September 2023.

"I formally put September of 2023 as a quarter which is going to be profitable This will happen way earlier than the timeline that I'm telling you.  We are very proud to say this is happening by not sacrificing any investment that we are making or any growth that we could have captured. We are making all investment and we are seeing the growth,” said Sharma told Business Today Television at World Economic Forun (WEF) in Davos.

Last month, Goldman Sachs said Paytm may become Ebitda profitable by March quarter -- two quarters ahead of guidance. It expected December quarter to be another strong quarter for  Paytm, with revenue growth of 45 per cent YoY and further improvement in  adjusted Ebitda losses (by 58 per cent sequentially) to -Rs 70 crore.

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