Mobikwik Reports Significant Quarterly Loss Amidst Strategic Shifts
Fintech platform Mobikwik has unveiled its financial performance for the first quarter of the 2026 fiscal year, revealing a substantial increase in its net loss. The company’s loan activities have negatively impacted its overall performance, highlighting challenges in the fintech landscape.
Financial Performance Overview
Based in Gurugram, Mobikwik reported a consolidated net loss of ₹41.9 crore for Q1 FY26, which marks a staggering six-fold increase from ₹6.6 crore reported in the same period last year. However, this loss is an improvement compared to the ₹56 crore deficit recorded in the previous quarter, suggesting some potential stabilization in the company’s finances.
Decline in Total Income
Mobikwik’s total income fell by 18.6% year-over-year, reaching ₹281.6 crore. This decline was primarily driven by a notable drop in income from financial services and an increase in costs related to financial guarantees for its lending model. Operational income declined by 20.7%, totaling ₹271.4 crore, while Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) fell into the negative zone at ₹31.2 crore, compared to a profit of ₹2.2 crore in FY25. A sequential analysis shows an improvement in EBITDA loss by ₹45.8 crore.
Challenges in Digital Credit Activities
The sharp decline in profitability has been largely attributed to a contraction in Mobikwik’s digital credit offerings. Revenues from financial services plummeted by 65.8%, falling to ₹58.3 crore from ₹170.7 crore in the previous year’s quarter. The company has identified factors such as a cautious lending environment and strategic pivots in its credit product offerings as critical reasons for this downturn.
Strategic Shift in Loan Models
In response to these challenges, Mobikwik has switched to offering longer-term loans under the Default Loss Guarantee (DLG) model, where the company retains part of the credit risk to attract loan partners. Although this model incurred upfront guarantee costs of ₹21.4 crore in Q1 FY26 compared to just ₹2.5 crore last year, it defers remuneration for the loan duration, thereby compressing short-term margins.
Positive Growth in Payments Segment
Despite the headwinds faced by its lending division, Mobikwik’s payments segment has emerged as a significant growth driver. This segment contributed 76% of the company’s total income, a substantial increase from 50% a year prior. Revenue from this sector soared by 24.2% year-over-year, reaching ₹213.1 crore, while gross payment margins improved to a record 28%, bolstered by enhanced cost efficiencies and transaction speed. Furthermore, gross merchandise value (GMV) for payments surged by 53% year-over-year to ₹38,388 crore.
Expansion of User Base and Expense Management
Mobikwik also reported an increase in its user and merchant base, ending the quarter with 18 million registered users and 464,000 merchants. The net payment margin remained stable with a minor increase of 15 basis points. On the operational front, total expenses reduced by 9% year-over-year to ₹312.8 crore, aided by effective cost management in user incentives and payment gateway fees. Additionally, expenses associated with loans declined to ₹29.2 crore from ₹92.4 crore a year ago.
Diversification and New Product Offerings
Looking to the future, Mobikwik is expanding its service offerings and has received regulatory approvals to operate as a broker in the stock market. The company launched a new RuPay credit card linked to fixed deposits and is piloting a UPI product called “Pocket UPI,” aimed at underserved users in smaller towns. These diversified offerings are designed to enhance customer engagement and drive future growth.