Nowadays most of the people have downloaded and using the Paytm App for making transaction because of demonetization and the company has claimed that they are not making profits instead suffering from losses because of excessive marketing activities.
It is hard to digest that the Paytm is making losses even at this time which should be the best earning time for companies like this.
The company has claimed that it saw net losses of Rs 1,549 crore for the year ending 31st March 2016; this is according to the document filed in with the Registrar of Companies.
Paytm is a product of Noida based company called One97 Communications and it has reported loss of Rs 372 crore a year ago as compared to a profit of Rs 5crore during the financial year ended 31st march 2014 as cashbacks.
The salary of the company founder, Vijay Shekhar Sharma is about Rs 3.1 crore in the 2015 -2016 fiscal year as compared to Rs2.3 crore the year before.
Paytm got huge investment from Alibaba and even they are also not able to provide the reasons for its soaring losses, nor did they tell anything about the reported revenue of Rs 336 crore in 2014-15.
When asked about the losses the company spokesperson said that they invested heavily in marketing activities, business expansion and manpower. And that feel that this will help them to sustain long term growth and integrate millions of Indian users to the mainstream economy.
Paytm has further enhanced their marketing budget after demonetisation step of the Modi Government and more people are downloading this app for making transactions due to shortage of cash in the Banks and ATMs.
The Company has filed that they would become operationally profitable by the financial year 2019.