Why Paytm’s long search for consistent profits continues
₹50,000, which would hurt its revenues. In light of this, the announcement of new business lines seems like an attempt to put on a brave face with an eye on its stock price.
Shareholders and stock watchers could be expected to ask the company for a more coherent strategy and hold its management and board accountable. But there's likely to be less patience with the company’s tendency to change strategy and chase new ideas every now and then.
Paytm may say it is venturing into every conceivable financial product to boost revenue and profit, but that is unlikely to silence criticism about its lack of focus. Macquarie wrote in a research report in November 2021, “Dabbling in multiple business lines inhibits Paytm from being a category leader in any business except wallets, which are becoming inconsequential with the meteoric rise in UPI payments.
Competition and regulation will drive down unit economics and/or growth prospects in the medium term in our view". Two years later, Paytm is still struggling to find its focus and prove it can deliver consistent profits.
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