Fino Payments Bank’s FY23 Profit Zooms 52% YoY To INR 65 Cr, Revenue Up 22%

Mumbai-based Fino Payments Bank has posted a 52.3% year-on-year (YoY) increase in its net profit for the financial year 2022-23 (FY23). The company’s profit after tax (PAT) during the year stood at INR 65.08 Cr against INR 42.74 Cr in FY22. 

Compared to the year-ago quarter, the startup’s PAT rose 25.4% to INR 22.1 Cr, and the profits were up 15.7% sequentially from INR 19.1 Cr in Q3 FY23.

Revenue, too, zoomed to INR 1,229.9 Cr in the fiscal year ended March 2023, up 21.9% YoY from INR 1,008.9 Cr in FY22. EBITDA surged 61.3% YoY to INR 136.1 Cr while EBITDA margins improved to 11.1% in FY23.

The growth came on the back of improvement in product mix in favour of high-margin products such as cash management services (CMS) and current account and savings account (CASA) and increasing digital penetration.

The payment bank’s total expenditure, however, surged nearly 21% on a yearly basis to INR 1,164 Cr in FY23 from INR 966.11 Cr in FY22. Of this, employee-related expenses stood at INR 155.61 Cr, up 20% YoY, while other operating expenses surged 17.6% YoY to 961.85 Cr at the end of FY23.

Elaborating on this, Fino Payments Bank chief finance officer (CFO) Ketan Merchant said that a big chunk of employee costs went towards scaling up its digital tech team, which contributed nearly 50% to the listed fintech startup‘s operating expenses.

“Last year, our overall investment in technology incurred a capex cost in the range of INR 90 Cr. Despite that resulting in depreciation, we believe it is a conscious investment. But, the digital employee cost constituted 50% of our operating expense last year, up by 16-17%. But, I believe that this expenditure is necessary, especially with an uptick in the digital business,” Fino Payments Bank’s CFO Ketan Merchant told Inc42. 

Key operational metrics also recorded major growth as the number of transactions on its platform rose nearly 80% YoY to 120.7 Cr in FY23. The startup’s throughput surged 36.1% on a yearly basis to INR 2.55 Lakh Cr, while the number of merchants on its platform grew to 13.7 Lakh in the year ended March 2023. 

“We performed remarkably well in this quarter, despite the macroeconomic challenges. Our profitability clearly demonstrates our steady progress. CASA and CMS continue to outperform our expectations and we are very confident of this momentum to continue…,” said Fino Payments Bank’s CEO and managing director Rishi Gupta.

The company also opened as many as 29.7 Lakh new accounts during the period under review, up 45% YoY. Total deposits at the end of FY23 grew 66% YoY to INR 1,200 Cr, up from INR 724 Cr last year. 

Merchant also told Inc42 that the startup was operating on a three-tier strategy called TAM — transaction, acquisition and monetisation. As per him, Fino has cracked the transaction part and was looking to fuel the acquisition of users, which would then set the stage for the company to figure out the ‘monetisation’ puzzle.

Fino Payments Bank began its operations in 2017, two years after getting the RBI nod for a licence. Competing directly with players such as Bharti Airtel and state-backed India Post, Fino Payments is among a handful of profitable payment banks in the country. 

Shares of the company closed 1.77% higher at INR 218 on the BSE on Tuesday (May 2). 

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