MobiKwik's Q2 losses surge 8X as fintech shifts from BNPL lending to ZIP EMIs

MobiKwik Systems' quarterly loss widened nearly eightfold as the digital payments company's exit from buy-now-pay-later loans sent revenue tumbling, overshadowing record growth in its core payments business.

The company's net loss ballooned to Rs 28.62 crore in the September quarter, compared with Rs 3.59 crore a year earlier.

Revenue from operations declined 7% year-on-year to Rs 270.21 crore, while expenses remained flat at Rs 285.70 crore, squeezing margins.

MobiKwik's EBITDA (earnings before interest, taxes, depreciation, and amortisation) swung from a profit of Rs 6.80 crore in the year-ago quarter to a loss of Rs 6.38 crore, marking a reversal in operating performance.

Lending

The company's financial services segment bore the brunt of the broader slowdown in short-term personal loans, with revenue plummeting 52% to Rs 61.3 crore from Rs 127.1 crore. Gross profit from the segment tumbled 58% to Rs 25.61 crore.

The sharp drop reflects MobiKwik's strategic shift away from its short-term loan, or buy-now-pay-later offerings, and towards its longer-tenure ZIP EMI product, which targets bigger-ticket purchases. ZIP EMI gross merchandise value grew 19.4% year-on-year to Rs 807.1 crore, up from Rs 675.8 crore, regaining prior highs.

Despite the revenue hit, the repositioning is improving unit economics. Lending expenses dropped 46% year-on-year as margins expanded substantially, delivering a Rs 17.9 crore quarter-on-quarter gain in gross profit. The company cited "growing optimism in lending partners" for the long-term product and positive signs in bank lending, with improved loan recovery trends.

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Payments

MobiKwik's core payments business provided a bright spot, with revenue rising 11.3% year-on-year to Rs 208.9 crore.

Gross profit surged 70.6% to Rs 61.36 crore as the company maintained tight control over payment gateway costs, which edged down 1.3% to Rs 133.91 crore. The result was a record-high gross margin of 29.4% for the payments segment.

The company processed its highest-ever quarterly GMV of Rs 43,217 crore, up 53% year-on-year and 13% sequentially. MobiKwik claimed it ranks among the top three fastest-growing UPI apps in India, with UPI transactions growing 3.5 times year-on-year.

The company's core payments business delivered its highest-ever quarterly gross merchandise value of Rs 43,217 crore, up 53% year-on-year and 13% sequentially. MobiKwik claimed it ranks among the top three fastest-growing UPI apps in India and maintains the number one position in the prepaid payment instrument wallet segment.

The company also offers investment products, including mutual funds, fixed deposits, and digital gold, to its user base. Assets under advice rose to Rs 13,957 crore from Rs 12,601 crore in the previous quarter. MobiKwik recently received SEBI approval for stock broking, which will allow it to add equity trading to the platform.

MobiKwik continued to grow its network effects during the quarter, adding 3.3 million new users to reach a total registered user base of 183.5 million—a 9.9% year-on-year increase.

The company also strengthened its merchant ecosystem, onboarding 71,000 new merchants in the September quarter. Its merchant base now stands at 4.71 million, up 7% from a year earlier.

During the quarter, Abu Dhabi Investment Authority sold its entire 2.1% stake in MobiKwik through a block deal worth Rs 39.21 crore at Rs 238.45 per share, according to National Stock Exchange data.

MobiKwik's other major shareholders include Peak XV Partners with 9.92%, Government Pension Fund Global with 3.01%, and Cisco Systems with 1.54%.

(The article was updated with more details.)