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One97 Communications Ltd., the parent company of digital payments platform Paytm, has reported a consolidated loss of Rs 840 crore for the quarter ending June 30, 2024, as it navigates through regulatory sanctions on Paytm Payments Bank.

Operating revenue for the quarter fell by 35.8% YoY to Rs 1,501 crore from Rs 2,338 crore in the same quarter last year.

The company’s losses more than doubled, reaching Rs 840 crore in Q1FY25, compared to Rs 358 crore a year ago.

Paytm’s total expenses decreased 11.5% to Rs 2,476 crore, brought down by payment processing expenses which fell by 32.5% YoY to Rs 517 crore, down from Rs 766 crore in Q1 FY24. Additionally, employee benefit expenses saw a 13.9% YoY decrease to Rs 952 crore, compared to Rs 1,106 crore in the corresponding quarter of the previous year.

“The company has achieved a 9% reduction quarter on quarter in employee costs, as part of its goal to save Rs 400-500 crore annually,” the company said in a regulatory filing.

However, these cost-cutting measures were insufficient to offset the overall financial performance. The total loss for the quarter stood at Rs 840 crore, a 2.3X increase from Rs 358 crore a year ago.

Last quarter, Paytm’s financials were affected due to an impairment loss of Rs 227 crore on its investment in Paytm Payments Bank Ltd (PPBL). Paytm had said the full impact of this could only be seen by Q1 FY25.

On January 31, 2024, the RBI clamped down on PPBL, an associate of One97 Communications, limiting it to only customer balance withdrawals. Consequently, One97 Communications ceased major business activities with PPBL, simplified its shareholder agreement, and withdrew its nominee director from PPBL’s board.

(This is a developing story, the article will be updated to add more information.)