Paytm‘s parent firm One97 Communication‘s shares were trading higher on Monday, a day ahead of its second-quarter results.

What Happened: Motial Oswal expects to see an improvement in the fintech giant’s total revenue growth and operating profitability int he July to September period. It expects the company’s revenue from operations to come in at ₹1,620 crore. It estimates the company’s losses to climb by a whopping 131% to ₹660 crore.

The brokerage sees disbursements and gross merchandise value increasing sequentially and noted that any further impact of the Reserve Bank of India’s (RBI) earlier notification must be watched out for.

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Earlier this year, the Reserve Bank of India barred Paytm Payments Bank from accepting new deposits and conducting credit transactions with customer accounts. Prepaid instruments, wallets, FASTags and National Common Mobility Cards (NCMC) were also restricted.

The RBI's decision followed subsequent evaluations by external auditors which highlighted non-compliance issues and significant supervisory concerns within the bank.

Dolat Capital forecast an 8.3% sequential growth in revenue to ₹1,626 crore, led by lending distribution business and improving key metrics. It expects profit after tax to turn positive with an exceptional gain of over ₹1600 crore from the divestiture, while it expects adjusted loss to narrow compared to the previous quarter, the brokerage said.

It expects the company’s net loss to rise to ₹575 crore. Dolat Capital suggests keeping an eye on the management’s comments around regulatory updates and expansion efforts of its non-loan distribution business.

Price Action: Paytm’s shares were up 1.57% to ₹736.55 on Monday.

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