MobiKwik Slips Into Red in Q2, Posts Rs 3.6-Crore Net Loss; Revenue Rises 43%

One MobiKwik Systems Ltd, a prominent fintech company, reported a net loss of Rs 3.6 crore for the second quarter ending September 2024, primarily due to increased expenses. This marks a reversal from the Rs 5.3 crore net profit posted during the same period in the previous fiscal year. Despite the net loss, the company's revenue from operations surged by 43% year-over-year to Rs 291 crore, up from Rs 203.4 crore. The company attributes the loss to continued investments aimed at driving the next phase of growth.

The company’s financial filing with the stock exchange highlighted a sequential narrowing of losses from Rs 6.6 crore in the first quarter of FY25. The report pointed out that the revenue increase was significantly driven by a robust performance in the Payments segment, which recorded a 181.3% year-over-year growth, reaching Rs 18.7 crore. However, revenue from financial services witnessed a 24% decline, dropping to Rs 103 crore due to a more selective approach in disbursing credit products, especially scaling back on the small-ticket offering "Zip" due to prevailing macroeconomic conditions.

The company’s total expenses for the quarter rose to Rs 287 crore, compared to Rs 196 crore in the corresponding quarter of the previous year. Despite the increase in expenses, total income also saw a substantial increase to Rs 293.67 crore, up from Rs 207 crore year-over-year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at Rs 6.8 crore, indicating a positive outlook on the firm’s operational efficiency and growth trajectory.

Upasana Taku, Executive Director, Co-founder & CFO of One MobiKwik Systems Ltd, commented on the results, stating, "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's Payment Gross Merchandise Value (GMV) saw a remarkable 3.7x jump, reaching Rs 28,300 crore. The user base expanded to 16.7 crore, with 59 lakh new users onboarded during the quarter. Additionally, 1.4 lakh new merchants joined the platform, increasing the total merchant base to 44 lakh.

Following the announcement of the Q2 results, MobiKwik’s shares traded flat, closing at Rs 564.50 per share on the NSE, up by 0.61%. The company’s shares were initially listed in December 2024 at a significant premium of nearly 60% after a successful initial public offering (IPO). The stock debuted at Rs 440 per share on the NSE, representing a 57.71% premium over the issue price of Rs 279. On the BSE, shares opened at Rs 442.25, marking a 58.51% premium. Post-listing, the company’s market valuation stood at Rs 3,890.14 crore.

Conclusion

MobiKwik’s Q2 performance reflects the company’s ongoing investments and strategic adjustments to balance growth and profitability. While the net loss indicates challenges due to increased expenses, the substantial revenue growth and expansion in the user and merchant base underscore the company’s potential for future growth. The firm’s focus on scaling its payments business and introducing new financial products is expected to bolster its revenue streams in the coming quarters.