Mobikwik, an Indian digital financial services platform, reported a net loss of 56.03 crore rupee (US$6.72 million) for the fourth quarter of FY25. This marks an increase from a loss of 67 lakh rupee (US$80,432) during the same period last year.

The company’s total expenses rose by 22% to 324.28 crore rupee (US$38.92 million). Meanwhile, revenue saw a slight increase of 1.1% to 267.78 crore rupee (US$32.14 million).

For the entire fiscal year, Mobikwik recorded a loss of 121.52 crore rupee (US$14.59) in FY25. This is in stark contrast to a profit of 14.07 crore rupee (US$1.69 million) in FY24.

Annual revenue increased by 33.7% to 1,170.17 crore rupee (US$140.44 million). However, expenses surged by 49.1% to 1,271.88 crore rupee (US$152.71 million).

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🔗 Source: YourStory

🧠 Food for thought

1️⃣ Unsecured lending caution driving industry-wide restructuring

MobiKwik’s financial services revenue decline (from Rs 55.79 crore to Rs 40.28 crore) reflects a broader industry trend affecting multiple fintech players.

The 41% drop in ZIP disbursals and contraction in ZIP EMI disbursals align with what industry observers have identified as a significant pullback by banks and NBFCs from unsecured lending 1.

This caution is forcing multiple fintech firms, not just MobiKwik, to pivot toward secured lending products and payment services to maintain growth 1.

The company’s strategic decision to pause ZIP for new users while shifting focus to longer-tenure ZIP EMI products demonstrates how fintech companies are recalibrating their business models in response to tightening credit conditions.

Despite these challenges, MobiKwik’s improved revenue take rate in financial services (rising from 6.1% to 7.5%) suggests efforts to optimize unit economics as volumes decline, a common adaptive strategy in changing market conditions.

2️⃣ Diverging fortunes in payments vs. lending reveal India’s fintech reality

MobiKwik’s contrasting business performance, with payments revenue surging 2.4x while lending declined, highlights a fundamental bifurcation in Indian fintech.

This pattern mirrors broader market dynamics where UPI-driven digital payments continue to accelerate (driving 75% of transaction volumes) while lending faces regulatory and economic headwinds 2.

The company’s 203% growth in payments GMV to Rs 1.16 lakh crore demonstrates how payment infrastructure is rapidly scaling in a market with 87% fintech adoption, significantly higher than the global average of 64% 3.

MobiKwik’s ability to cut user incentive expenses by 62% while growing its payment business is particularly notable in an industry where profitability challenges persist despite user growth.

The company’s focus on cost optimization in payments (reducing payment gateway costs by 9%) while achieving a 19.7% gross margin demonstrates how competitive pressures are forcing efficiency improvements across the industry.

3️⃣ Long-term growth potential drives continued investment despite short-term losses

Despite widening quarterly losses, MobiKwik’s addition of 20.6 million new registered users reflects confidence in India’s massive fintech adoption runway.

With India’s fintech market projected to reach USD 990 billion by 2032 (growing at 30.26% CAGR), current investments in user acquisition represent strategic positioning for future growth 4.

The company’s expansion to 4.59 million merchants targets a significantly underpenetrated market, as approximately 60% of consumer expenditure in India still occurs in cash, particularly in rural areas 2.

MobiKwik’s addition of 0.53 million new merchants in FY25 represents an effort to capture transaction volume in a market where digital payments are expected to reach over 130 billion transactions by the end of 2025 2.

The company’s expectation that financial services growth will resume post-Q2 FY26 suggests management believes the credit contraction is cyclical rather than permanent, a view supported by the long-term growth trajectory of India’s digital economy.

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