The One97 Communication owned company Paytm incurs loss of 163% in the fiscal year 2019. The site with the main motto of ‘Paytm Karo’ has seen an increase of over 163% loss in the fiscal year ending 2019 in comparison to last year when it had a loss of Rs 1,604 crore Rs. In this article, we will tell you why Paytm has suffered such a great loss and will this lead to something bad.
Why the sudden increase in Loss?
Paytm has reported only a 6% increase in its revenue from Rs 3,052 crores to Rs 3,232 crores at the end of the Fiscal Year 2019. Paytm’s annual expenses saw an increase of over 60% in comparison to last year. This year Paytm has seen expenses of Rs 7,730 crores while they were Rs 4,864 crores at the end of March 2019. It was necessary for the Noida based company to tell its shareholders why is there a sudden increase in expenses.
The reason for the increase in expenses turns out to be brand creation expenses and an increase in operational expenses. The only hope Paytm has is that it bets its financial services will pay off in the coming financial years.
In its annual report, the company says:
“We are focusing on strengthening its position in various business segments like payments bank, insurance & insurance broking, travel ticketing, hotel, and mobile wallet services, and that would result in a better turnover in coming fiscal years.”
Even after the losses, the company seems pretty strong in its endeavors. It states it has invested a total $2 billion in the past two years in expanding paytm to digitalize India. It also states that it will be spending another $3 billion in the upcoming two years to upscale the company.
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