Fino Payments Bank’s Q3 PAT Zooms To INR 19.1 Cr As High Margin Revenue Improves

Mumbai-based Fino Payments Bank’s net profit zoomed 35% year-on-year (YoY) to a record INR 19.1 Cr in the third quarter (Q3) of the financial year 2022-23 (FY23) largely on the back of greater adoption of high margin products. The startup had reported a net profit of INR 14.1 Cr in Q3 FY22. 

The startup’s net profit has zoomed 38% on a quarterly basis from INR 13.8 Cr in Q2 FY23. In the first three quarters of FY23, Fino reported a cumulative net profit of INR 43 Cr, up more than 71% from INR 25.12 Cr in the first three quarters of FY22. 

Total income rose 14% to INR 314.1 Cr in the quarter ended December 2022, up from INR 275.17 Cr in Q3 FY22. In the nine month period ended December 2022, Fino Payments Bank saw its total income surging more than 25% YoY to INR 906.48 Cr, up from INR 723.56 Cr during the same period a year ago. 

Total expenditure surged nearly 13% to INR 295 Cr in Q3 FY23, compared to INR 261.07 Cr Q3 FY22. During the quarter under review, other operating expenses accounted for a major chunk of these expenditures at INR 243.38 Cr, while employee benefits accounted for a mere INR 38.04 Cr. 

Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) improved 50.2% to INR 38.9 Cr in Q3 FY23, up from INR 25.9 Cr in Q3 FY22. Similarly, EBITDA margins widened to 12.4% against 9.4%.

“… Our growth and profitability led approach is yielding good dividends. The strategic focus on customer acquisition is working well and this in my view is a cornerstone of our future success. Going forward, we will strengthen our franchise, build on our digital and technology offerings with emphasis on partnerships for expansion and profit generation… ,” said Fino Payments Bank’s chief executive officer (CEO) and managing director (MD) Rishi Gupta.

The payments bank saw growth across all its key operational metrics in Q3 FY23. Here are a few highlights:

• Registered merchant count increased 50% YoY to 13 Lakhs
• More than 7.6 Lakh bank accounts were opened with FPB in Q3 FY23, up 46% YoY
• Total account base at the end of December 2022 stood at 67 Lakhs
• Total deposits grew 66% YoY to INR 976 Cr in Q3 FY23, up from INR 589 Cr 
• High margin products, Current Account Savings Accounts (CASA) and Cash Management Services (CMS), contributed 26% of revenue in Q3 FY23, up 16% YoY
• Overall throughput value grew 34% YoY to INR 65,926 Cr
• CMS throughput more than doubled YoY to INR 13,248 Cr 

Speaking with Inc42, Fino Payments Bank’s chief financial officer (CFO) Ketan Merchant said that the listed startup’s product margin increased by around 120 bps to 32.1% in Q3 FY23, while revenues grew by at least 10% more than cost growth. This, he said, would enable the company to further shore up its bottom line at a faster pace. 

“For us, it is about network expansion, customer acquisition, operating leverage and digital stack that will drive a lot of things for us to come in the future,” Merchant said. 

Meanwhile, Fino Payments Bank logged 32.3 Cr transactions on its multiple platforms and its digital footprint purportedly increased 163% YoY in Q3 FY23.

Fino Payments Bank began operations as Fino PayTech and later commenced operations as a payments bank in 2017, after receiving RBI nod in 2015. The listed company competes with other players such as India Post, and Bharti Airtel, among others. 

The stock closed 0.18% lower at INR 245.45 on the BSE on Thursday.