Paytm-parent shares rally: One97 surprises with profit turnaround, continues Eternal’s digital stock momentum

One97 Communications, the parent company of fintech brand Paytm, saw its stock slump on Wednesday morning after investors booked profits and then rallied following its earnings announcement a day earlier. One97 turned to a consolidated net profit of ₹122.5 crore for the quarter, compared to a loss of ₹840 crore a year ago, it posted on Tuesday.

The turnaround came after the fintech firm cut promotional and marketing costs to just under ₹100 crore, more than half from the ₹221.4 crore it spent in the same period last year. It also slashed employee benefits by about ₹300 crore to ₹643 crore.

Paytm reported 38,945 as the average number of sales employees for the three-month period. ”To further strengthen tier-1 market position and expand in tier-2 and tier-3 cities, we are investing in expanding our sales network (sales people costs are up 19 per cent YoY),” the company said in its regulatory statement.

However, the exaltation of the results was short-lived after One97 later announced a slew of resignations, including the retirement of group CFO and president Madhur Deora.

“Madhur Deora, Executive Director, President and Group CFO, being a director liable to retire by rotation at the ensuing Annual General Meeting (AGM), is not seeking reappointment at the ensuing AGM,” read the company filing on Tuesday night.

Apart from Deora, Bimal Julka—a non-executive independent director of Paytm—also resigned from the board, it said.

The results of One97 came a day after Zomato-parent Eternal posted better-than-expected results. “Q1 results of Eternal and Paytm indicate steady growth potential of the digital stocks, which have a long runway of growth,” said V.K. Vijayakumar of Geojit Investments.

In the first three hours of trading, One97 stock jumped 3 per cent to as high as ₹1,090 apiece with more than ₹12 lakh shares changing hands on the BSE. Eternal saw its stock inch 2.15 per cent higher on Wednesday morning after an 11 per cent jump a day earlier.

On Wednesday, the Sensex and Nifty rallied, with the BSE benchmark gaining as much as 288 points to hit a high of 82,475.45 in morning trade.

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