MobiKwik Nearly Halves Loss QoQ To INR 3.6 Cr In Q2 FY25

In its first financial disclosure since listing, fintech company MobiKwik reported a net loss of INR 3.59 Cr in the second quarter of the ongoing fiscal year (Q2 FY25). Sequentially, the company was able to trim its loss by about 45% from INR 6.62 Cr. 

Including a component of remeasurement of net defined benefit liability of INR 48.8 Lakh, the company’s loss for the quarter stood at INR 4.08 Cr.

MobiKwik had posted a net profit of INR 5.22 Cr in the year-ago quarter.

Despite the loss, MobiKwik continued to maintain profitability at an EBITDA level. Its EBITDA stood at INR 6.80 Cr in Q2 FY25, down 37% from INR 10.8 Cr in the year-ago quarter. In spite of this, the company claimed to have maintained an EBITDA margin of 2.3%. 

Meanwhile, the top line zoomed 42% to INR 290.65 Cr during the quarter under review from INR 203.45 Cr in Q2 FY24. However, it declined 15% sequentially from INR 342.27 Cr.

Including another income of INR 3.02 Cr, MobiKwik’s total income for the quarter stood at INR 293.67 Cr.

“We are thrilled to announce our first quarterly results post-listing, marking a significant milestone in MobiKwik’s journey. The strong growth in our payments business demonstrates our ability to scale while maintaining strong contribution margins. The company continues to work on balancing growth and profitability by increasing market share and launching innovative products,” MobiKwik cofounder and CFO Upasana Taku said in a statement.

A Deeper Look At MobiKwik’s Revenue Streams

Interestingly, the company’s revenue breakdown revealed a reversal in the contribution from its two revenue streams – payments and financial services. 

This quarter, MobiKwik generated a larger chunk of revenue, INR 187.7 Cr, from its payments business. This was an uptick of 65% from INR 66.7 Cr in the same quarter last year. Revenue from financial services dipped 25% to INR 102.9 Cr from INR 136.7 Cr in the year-ago quarter. 

The company said that strong growth in the payments vertical is helping it attain a stable financial performance. The company has focused on controlling its fixed costs for this vertical, taming the fixed cost percentage to 37.8%. 

“With a focus on controlling fixed cost, the company continues to work on balancing growth and profitability, by increasing market share and launching innovative products,” it said. 

Meanwhile, MobiKwik said that its registered users scaled 13.6% YoY to 167 Mn as of September 30, marking an addition of 5.9 Mn users in the quarter. Besides, its merchants base also went up 15.5% YoY to 4.4 Mn with the addition of 140K new merchants in Q2 FY25. 

Further, the fintech company processed a “payment” GMV of INR 28,280 Cr in the quarter, a 267.3% YoY spike. Its platform also accounted for digital credit GMV transactions worth INR 16.3 Bn in the quarter. This metric fell 26.5% from the same quarter last year.

Moving forward, the company is doubling down its focus on Pocket UPI, which allows users to use a digital wallet to pay on the UPI network, as it believes there is a significant headroom to gain market share in the UPI ecosystem through differentiated products.

For its RuPay credit card offering, the fintech company has partnered with an unnamed bank to offer FD-backed RuPay credit cards. It expects this to replace the volumes of small ticket credit product “ZIP”.

The ZIP offering has been on a downward trajectory over the past quarters, the company’s filing revealed. In the quarter, ZIP EMI GMV disbursements fell 22.9% YoY to INR 675.8 Cr. Meanwhile, activated EMI users increased 8.7% YoY to 1.1 Mn. 

MobiKwik’s Journey Since IPO

The fintech major got the market regulator’s nod for its initial public offering (IPO) in the quarter under review. 

Its IPO comprised a fresh issue of 2.05 Cr equity shares. The IPO received an overwhelming oversubscription of nearly 120X. The company’s shares got listed at INR 442.25 apiece on the BSE. This was a 58.5% premium over its IPO price of INR 279. 

In its financial disclosure, MobiKwik also revealed that it entered into a waiver agreement with one of its lending partners. 

“… the Company has entered into an agreement (referred to as “waiver agreement”) with one of its lending partners, whereby the Company has agreed to forego income receivable related to financial services amounting to INR 24.22 Cr pertaining to quarter ended 30 June 2024 which has been netted off against revenue from financial services for the current quarter,” it said. 

Further, the said lending partner has also agreed to irrevocably waive its right to receive facilitation fees from the company amounting to INR 42.16 Cr netted off against lending operational expenses for the current quarter.

Where Did MobiKwik Spend? 

Mobikwik’s total expenditure jumped 46.53% YoY to INR 286.86 Cr in Q2 FY25 from INR 196.02 Cr in Q2 FY24. The sharp rise in expenses was primarily driven by a significant increase in payment gateway costs.

Sequentially, the company trimmed down its expenses by 16.41% from INR 343.59 Cr in Q1 FY25.

Payment Gateway Costs: The largest expense component, payment gateway costs, surged 214.17% to INR 135.66 Cr in Q2 FY25 from INR 43.16 Cr in Q2 FY24.

Lending Operational Expenses: Lending-related costs fell 71.7% to INR 17.6 Cr in Q2 FY25 compared to INR 62.4 Cr in the same period last year. The decline can be attributed to the waiver deal MobiKwik signed with its lending partner. 

Employee Benefit Expenses: The company spent INR 43.5 Cr on its employees in the quarter, up 72.14% from INR 25.27 Cr it spent last year.

Shares of MobiKwik ended today’s trading session 9.25% higher at INR 609.7 on the BSE.

(Correction Note: The original story has been edited to reflect the consolidated financial information for MobiKwik for Q2 FY25.)