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Shares of India’s digital payments company Paytm jumped more than 6% to their highest level in nearly six months on Monday after parent One 97 Communications Ltd reported an 89% jump in its quarterly earnings.
Higher monthly users, more payment devices and more loan disbursements lifted the company’s revenue to 16.8 billion rupees ($211.16 million), up from 8.91 billion rupees last year.
Investors appeared unresponsive to the company’s wider loss of 6.44 billion rupees disclosed in a quarterly update after the market closed on Friday.
Paytm, which competes with Google’s payments app and Walmart Inc’s PhonePe in India’s digital payments market, said it is on track to achieve operating profitability by September 2023.
“A significant imprint of the results was the sharply increased print of the gross margin in the payment system, which led to the expansion of contribution margins to 13 basis points,” said analysts J.P. Morgan on Monday.
The processing fees of the company, backed by China’s Ant Group and Japan’s SoftBank Group Corp, fell 10.4% sequentially to 6.94 billion rupees.
“Management clarified that it can negotiate better deals with its bank partners and rationalized some low-margin online merchant accounts, resulting in lower payment processing fees,” Macquarie analysts said in a note.
The company’s shares were up 6% at 830.5 rupees by 06:48 GMT.