Digital payments company One97 Communications Limited, which operates under the Paytm brand, has no influence on the price at which its shares trade, but management is making efforts to make the company profitable, MD and CEO Vijay Shekhar Sharma told shareholders on Friday. .
Speaking at the company’s 22nd Annual General Meeting (AGM), he said the company was in expansion mode until 2018-19 and entered monetization mode from 2019-20, according to participants who attended the meeting.
Mr Sharma said Paytm, as the company has previously committed, will post operating profit in the quarter ending September 2023.
“Stock price movements are not influenced by us. There are several factors. The profitability of the company plays a very important factor in that. The growth of the company plays an important role in that, but these two are not the only factor for the stock price.
“Macro, micro, international investors and various other sentiments play a role in stock prices,” he said.
In response to questions from shareholders, he said management is making efforts to ensure the company records growth and makes strong profits for expanding the business.
Shareholders of One97 Communications Limited asked management about the path to profitability and the recovery of the share price to the IPO level of Rs 2,150. The stock closed at Rs 771 on Friday.
While most shareholders who were allowed to speak at the AGM expressed confidence in the company’s business model, some expressed dismay at One97 Communications’ losses and the fall in its share price.
A shareholder, Manjit Singh, said Paytm’s business model is good and the brand is visible, but the share price is well below the IPO level, which the company should be looking at.
Another shareholder, Bimal Kumar, inquired about the employee retention rate, the breakeven timeline and the company’s appraiser who set the share price at Rs 2,150.
Shareholder Santosh Kumar Saraf asked the company to increase the number of female employees at the company and settle old disputes related to 2013-14 while expressing confidence in the company’s business growth.
Shareholder Lokesh Gupta inquired about the reason for the loss when management took high salaries and asked the company to cut costs.
Other shareholders asked about the company’s expansion plans abroad and the status of the company’s margins.
Mr Sharma said the company makes money from every transaction, in the range of 4 paise to 14 paise on every Rs 100 and in some cases like FASTag, it goes up to Re 1.
“Wherever we installed the sound box, we get subscription fees. As the number of devices increases, the payments increase, then it leads to profits,” added Sharma.
He said that Paytm has about 3 crore merchants and the company believes there is a need to expand the services to more merchants, which will cost the marketing team.
“This outlay may look like a loss at the moment, but it will provide good returns in the long run,” he claimed. Sharma also said the company will look to expand overseas after it gains positive cash flow in India.
Paytm President and Group CFO Madhur Deora said the company’s churn is between 2 and 2.5 percent per month.