MobiKwik Q1 FY27 Results: PAT Turns Positive as Platform Spend GMV Surges 50% YoY

What Happened ?

MobiKwik Q1 FY27 Results demonstrated continued operating leverage across both payments and financial services. The company benefited from robust UPI transaction growth, expanding merchant payments, improving lending profitability and disciplined cost management.

Management also highlighted significant progress towards operationalising its NBFC after receiving RBI’s in-principle approval and obtaining shareholder approval to transfer its Lending Service Provider (LSP) business to its wholly owned subsidiary, MobiKwik Distribution Services Private Limited (MDSPL). 

key details

Strong Financial Performance:

• Platform Spend GMV increased 50% YoY to ₹587 billion.
• Contribution Profit increased 66% YoY.
• EBITDA remained positive at ₹158 million.
• PAT stood at ₹76 million.
• Contribution Margin improved to 44%.
• The company achieved its third consecutive profitable quarter.

Note:

• Profitability improved through higher contribution from payments and financial services alongside lower operating costs. 

Payments Business Continues Strong Momentum:

• Platform Spend GMV reached ₹587 billion.
• UPI transactions increased 130% YoY, compared with 24% industry growth.
• UPI GMV doubled to ₹269 billion.
• Wallet GMV increased 24% YoY to ₹125 billion.
• Recharge & Bill Payments GMV grew 37% YoY.
• Merchant Payments GMV increased 17% QoQ.
• Payments Gross Profit increased 31% YoY.
• Payments Gross Margin improved to 37.3%.

Note:

• MobiKwik remained India’s No. 1 Wallet by GTV, the second fastest-growing UPI TPAP app, and ranked No. 6 in Bill Payments during the quarter.

Financial Services Deliver Record Profitability:

• Financial Services Revenue increased 26% YoY.
• Gross Profit increased 459% YoY.
• Gross Margin improved to a record 59.0%.
• Net Financial Services Margin reached 5.87%.
• Lending-related expenses declined 40% YoY.
• Credit risk performance improved by approximately 25%.

Note:

• Better underwriting, portfolio quality improvement and recoveries from past loan books significantly strengthened lending profitability. 

Lending Business & NBFC Transition:

• RBI granted in-principle approval for an NBFC licence.
• Shareholders approved the transfer of the Lending Service Provider (LSP) business.
• Transfer to MDSPL is targeted for August 2026.
• IPO proceeds will be utilised to capitalise the lending subsidiary.
• Lending disbursals stood at ₹7,367 million.
• Nine major lending partners now support the lending ecosystem.

Note:

• Management expects lending momentum to improve after completion of the business transfer and onboarding of additional lending partners. 

AI-Led Growth Initiatives:

Management highlighted several AI-driven initiatives:

• Targeting 96 million engaged users for lending cross-sell.
• AI engine designed to recover customer drop-offs across the lending funnel.
• Multilingual AI voice agents introduced for customer engagement.
• Targeting approximately ₹1,000 million of incremental quarterly disbursals through AI initiatives.
• Long-term target of ₹10,000 million+ quarterly lending disbursals.

Note:

• AI is expected to improve lending conversion rates, customer engagement and operational efficiency. 

Credit Quality Continues to Improve:

• Repeat borrowers increased from 35% to 60%.
• FLDG model accounted for 68% of lending disbursals.
• Distribution model contributed 32%.
• Top three lender concentration reduced from 87% to 71%.
• Portfolio quality continued improving through ML-driven underwriting and AI-enabled collections.

Note:

• Improved portfolio quality supported higher lending margins and lower credit costs. 

Cost Optimisation:

• Direct costs reduced 21% YoY.
• Payment-related expenses declined 15% YoY.
• Lending-related expenses reduced 40% YoY.
• Finance and depreciation costs fell 24% YoY.
• Fixed costs reduced 4% QoQ through continued cost rationalisation.

Note:

• Cost optimisation remained a major contributor to sustained profitability during the quarter. 

Business Outlook:

Management expects:

• Continued strong UPI transaction growth.
• Stable payments margins within the guided range.
• Lending disbursals to recover in Q2 FY27.
• Full-year FY27 PAT to remain positive.
• Merchant acquiring and digital lending to remain key growth drivers.
• Continued expansion through AI-powered customer engagement.

Note:

• Management believes the payments ecosystem and lending platform provide a strong foundation for long-term profitable growth.

Risk Analysis

Summary:

• While MobiKwik has demonstrated improving profitability and stronger lending economics, future performance depends on successful execution of its NBFC strategy, sustained payment growth and continued improvement in credit quality.

Key Risks:

• Delay in receiving the final RBI Certificate of Registration for the NBFC.
• Slower-than-expected recovery in lending disbursals.
• Increased competition in UPI and digital payments.
• Changes in fintech regulations.
• Deterioration in credit quality.
• Slower consumer spending affecting payment volumes.

Worst Case:

• If the NBFC transition is delayed or lending growth does not recover as expected, profitability could moderate despite continued strength in the payments business.

Risk Level: Medium

Company Commentary

• Third consecutive profitable quarter.
• Platform Spend GMV reached a record ₹587 billion.
• UPI transactions significantly outpaced industry growth.
• Financial Services achieved record margins.
• Lending business transfer to MDSPL is progressing.
• Management targets sustained profitable growth through payments, lending and AI-led customer engagement.