One97 Communications, the parent company of the prominent fintech leader Paytm, saw its shares slump in early trade after it reported its earnings for the quarter ended September.

What Happened: The company posted a 32% year-over-year surge in its revenue, reaching ₹2,518.6 crore for the July-September quarter. In the same quarter last year, the company had reported revenue of ₹1,914 crore. Notably, the net loss attributable to the owners decreased to ₹290.05 crore in the September quarter of the current financial year as compared to the ₹571 crore loss it booked in the same quarter last year. Both the top and bottom lines missed consensus estimates.

Looking at the quarterly performance, Paytm experienced a modest 7% increase, with revenue reaching ₹2,341 crore in the June quarter. In the previous quarter, it had reported a consolidated net loss of ₹357 crore.

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The payments business witnessed a 28% year-over-year growth, generating ₹1,524 crore in revenue. The gross merchandise value (GMV) from the payments segment soared by 41% year-over-year to ₹4.5 lakh crore.

Additionally, the number of merchants paying subscriptions for soundbox devices reached 92 lakhs by the end of the September quarter. In the loan distribution business, revenue from financial services and other related sectors showed 64% YoY growth to ₹571 crore. The platform’s user base for loans reached 1.18 crore unique users, and the loan disbursal continued to scale, boasting a significant 122% year-over-year growth, totalling ₹16,211 crore.

Analyst Reactions: CLSA maintained its “buy” rating for the stock raising the price target to ₹1,200 from ₹,1050. The global brokerage said that the GMV growth was good and the new soundbox variations are a good addition. Bernstein also maintained its “outperform” rating for the stock with a target price of ₹1,100.

Price Action: Paytm’s share price was down 2.07% to trade at ₹967.20 shortly after market opened on Monday.

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