news/GOOGL/2023.02.06/India's Paytm jumps over 7% on ahead-of-schedule operating profit.txt

BENGALURU, Feb 6 (Reuters) - Shares of India's Paytm
rose as much as 7.4% on Monday, in their biggest
intraday jump in nearly two months after the fintech company
unexpectedly posted its first-ever quarterly operating profit as
a listed firm.Paytm posted earnings before interest, taxes, depreciation,
and amortization, or EBITDA, of 310 million rupees ($3.8
million) for the October-December quarter, nine months ahead of
its stated target of September 2023."This was mainly on the back of rising mix of high-margin
lending revenue, improving merchant subscription, reducing
payment processing and promotional charges," BofA Securities
analysts said in a note.There has been a cloud over the ability of the company,
which is backed by China's Ant Group and Japan's SoftBank Group
Corp, to turn profitable ever since its initial public
offer (IPO), still India's biggest ever, in November 2021.That has led to a 75% tumble in the stock since the IPO.While Paytm still posted a net loss for the third quarter,
it nearly halved due to surging demand for buy-now-pay-later
(BNPL) loans at its fast-growing financial services business.While BNPL loan disbursement rocketed four-foldin the
quarter, net margins in Paytm's digital payments division more
than doubled to 4.59 billion.The eponymous payments business had a 14.7% share of India's
digital payment space in December, lagging Walmart-backed
PhonePe's 46% share and Alphabet Inc-owned Google Pay's
34% share, according to official data.Nonetheless, turning EBITDA positive will be a near-term
catalyst, said BofA, keeping its "neutral" rating on the stock."Management's commentary around sustaining along the
profitability path will be key," the brokerage said.Paytm has also previously said it expects to become free
cash flow positive this year.The stock was last up about 4.7% at 550 rupees as of 10:53
a.m. IST. It had slid 3.6% this year through Friday.
($1 = 82.4050 Indian rupees)
(Reporting by Nandan Mandayam in Bengaluru; Editing by Savio
D'Souza)