Paytm parent One97 Communications' shares dropped as much as 5 percent on Monday, as the fintech firm's Q2 FY22 results failed to enthuse the Street.

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The stock extended losses from Friday. On Friday, the scrip had tanked over 7 percent after rising for three trading sessions back to back. Sell-off in the broader market had weighed on Paytm's shares.

The stock was now fluctuating between losses and gains. At 10:39 am, the scrip was down 0.2 percent at Rs 1,778.15 on the BSE.

The digital payments firm saw losses in Q2 increase to Rs 473 crore, up 24 percent sequentially and 8.5 percent annually, as expenses increased.

The company also saw a small dip in contribution margin to 23.9 percent, down from 27.4 percent in the June quarter. The contribution profit stood at Rs 260 crore, compared to Rs 244 crore in the earlier quarter.

However, Paytm’s revenue from operations for the second quarter of the fiscal jumped 63.6 percent to Rs 1,086.4 crore on a year-on-year (Y-o-Y) basis. It is 22 percent higher than the revenue of Rs 890.8 crore in the previous quarter.

Strong revenue performance comes at the back of robust sales in Payments & Financial Services and Commerce & Cloud Services business segments. Revenue from Payments and Financial Services grew 69 percent YoY to Rs 8,426 million while Commerce and Cloud Services revenue grew by 47 percent YoY to Rs 2,438 million.

The company noted a few trends like the growth of Payments revenues and profitability, recovery of high-margin commerce business, growth of Cloud due to ramp-up of advertising and increase of Financial Services revenues driven by a huge ramp-up in lending.

The company said that the number of loans disbursed grew 714 percent YoY to over 2.8 million in Q2 FY22.

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(Edited by : Ajay Vaishnav)