Paytm shares: Emkay Global stated in a recent report that One 97 Communications Ltd. (Paytm) would concentrate on the declining core business after disposing the entertainment sector. According to the domestic brokerage, the entertainment industry has a high profit margin, with a take rate of 5-8 percent from the sale of movie and event tickets, which is a subset of marketing services. According to it, this is probably going to hurt Paytm’s user base.
Paytm shares, Paytm intends to concentrate on its declining core business of financial services and payments in the wake of the RBI move. Paytm recently decided to concentrate on distribution rather than manufacturing General Insurance goods.
Wasteland Entertainment (Paytm Insider) & Orbgen Tech (Ticketnew.com), two of Paytm’s subsidiaries, reported FY23 sales of Rs 193 crore and Rs 16 crore, respectively. As a result, their marketing and overall revenue shares were 14% and 3%, respectively.
Zomato is allegedly offering a greater purchase value of Rs 2,000 crore (8x revenue), including receivables, based on an assumption of increased revenue of Rs 260 crore in FY24 (considering strong momentum in 3QFY24). The agreement would support Paytm’s cash balance of Rs. 5,300 crore, which may be utilized to expand the rewards and cash-back program and revitalize the company’s payment business (UPI market share fell to 6% in May 2024 from 10.5% in January 2024), according to Emkay Global.
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The Paytm management guided an Ebitda loss (exESOP) of Rs 500–600 crore for the June quarter, given the business slowdown, as the full-quarter impact of business disruption gets absorbed.
With a target price of Rs 300 per share, Emkay Global has kept its “Reduce” rating on the company for the time being due to the protracted business slump.
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