Earlier, the B2C online payment services provider had a stellar run on the bourses gaining 157% within a week since its listing on December 18 boosted by the growing adoption of digital payment methods by consumers. The company continued to report growing gross monetary value (GMV) and new registered users during the quarter. However, it will be a tough task to continue reporting net profit for the second fiscal year in a row given the net losses in each of the first two quarters of FY25. This and a sharp jump in the stock price since listing may limit the upside in the short term.
Incorporated in 2008, Gurugram-headquartered MobiKwik provides a mobile phone app-based platform for consumers and merchants to facilitate online payments. It also offers financial services such as the distribution of mutual funds, insurance products, digital gold, merchant cash advances, consumer EMI facilities among others.
The number of registered users increased to 167 million in the September quarter from 161 million in the previous quarter and from 156 million at the end of FY24. The company’s platform spend GMV increased by 8.7% sequentially to Rs31,052.9 crore. The platform spend GMV represents all spending on the company’s digital platform through payment and credit products excluding direct loan disbursals. The company has shown strong momentum in this parameter in each of the first two-quarters of FY25. As a result, the platform spend GMV in the first half of the current fiscal year at Rs59,631 crore surpassed the spend of Rs47,677.7 crore in the whole of FY24. This reflects the increasing usage of the company’s payment services.
The contribution margin improved to 40.2% during the quarter from 30.9% in the previous quarter. It is calculated as total income less direct cost including payment gateway expenses, user incentives, and lending-related expenses. The expansion in the contribution margin was on account of a sharp fall in lending related expenses, which fell to 8.2% relative to total income from 27.4% in the previous quarter.
On the flip side, MobiKwik reported slack in the financial services revenue, which fell by 39.7% sequentially to Rs1,029 crore on account of the company’s selective stance in distributing credit products. The company has introduced distribution of new financial products to support the segment revenue in future. In addition, expenses towards user incentives remained elevated at Rs16.1 crore in the September quarter and Rs 16.2 crore in the previous quarter compared with Rs 12.5 crore in the year-ago quarter. The company has identified several growth areas including gaining market share in the UPI ecosystem through various products including digital wallet, Rupay credit card on UPI, bill payments and monetisation of merchant networks. The company’s performance on bourses will depend on how quickly it is able to offer a sustainable trend in net profit.
