One97 Communications Limited (NSE:PAYTM) Has Found A Path To Profitability

One97 Communications Limited (NSE:PAYTM) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. One97 Communications Limited provides payment, commerce and cloud, and financial services to consumers and merchants in India, the United Arab Emirates, Saudi Arabia, and Singapore. The ₹811b market-cap company posted a loss in its most recent financial year of ₹6.6b and a latest trailing-twelve-month loss of ₹6.0b shrinking the gap between loss and breakeven. As path to profitability is the topic on One97 Communications' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

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According to the 16 industry analysts covering One97 Communications, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of ₹6.1b in 2026. Therefore, the company is expected to breakeven roughly 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 50%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of One97 Communications' upcoming projects, however, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

View our latest analysis for One97 Communications

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 0.1% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on One97 Communications, so if you are interested in understanding the company at a deeper level, take a look at One97 Communications' company page on Simply Wall St. We've also put together a list of important aspects you should look at:

1. Valuation: What is One97 Communications worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether One97 Communications is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on One97 Communications’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.