Mobikwik Q2FY25 result announcement

07 January 2025

MobiKwik recorded impressive Year-over-Year (y-o-y) growth in Q2FY25, with revenue from operations increasing by 42%, rising from INR 207 Cr in Q2FY24 to INR 294 Cr. The company experienced a remarkable surge in payments Gross Merchandise Value (GMV), which soared by 267.3%(y-o-y), driven by a robust expansion in both user and merchant bases. Despite these positive numbers, profitability faced challenges, highlighted by a Contribution Margin improvement to 40.2% and a loss in Profit After Tax (PAT) of INR 36 Cr, largely due to ongoing investments for future growth.

In the Quarter-over-Quarter (q-o-q) analysis, MobiKwik's revenue from operations decreased by 15.1%, dropping from INR 342 Cr in Q1FY25 to INR 291 Cr in Q2FY25. This decline has been attributed to strategic adjustments in credit product offerings and changes in commercial agreements. Despite the revenue drop, there were positive cost efficiency indicators; the Gross Margin for Payment Services improved to 19.2%, while EBITDA saw a significant (q-o-q) increase of 205%, from INR 2 Cr in Q1FY25 to INR 7 Cr in Q2FY25.

Key Performance Indicators (KPIs) in the payments business reflect strong user and merchant growth, with registered users increasing to 167 million and the merchant base expanding to 4.4 million. Payments GMV reached INR 283 billion, showing both (y-o-y) and (q-o-q) growth. However, the take rate slightly declined to 0.66% from 0.68%. In the Financial Services segment, the Digital Credit GMV fell to INR 16.3 billion, indicating a more cautious disbursement strategy, even as the gross margin improved to 48%.

Strategic initiatives included scaling back the "ZIP" credit product to address macroeconomic challenges and introducing new financial products such as FD-backed RuPay credit cards. Operational milestones also included achieving industry-leading payment gross margins and successfully listing on the NSE and BSE on December 18, 2024, following the MobiKwik IPO. Overall, while MobiKwik navigates some quarter-over-quarter challenges, its long-term growth strategies and user base expansion position it favorably for future growth.