MobiKwik Q1 FY27: Profits extend, lending margins improve, and merchant acquiring gets serious

MobiKwik ended the June 2026 quarter (Q1 FY27) with a third consecutive profitable result. The company reported PAT of INR 76 million and EBITDA of INR 158 million. Management described the quarter as its most successful and profitable yet, while also positioning it as a baseline for full-year profitability.

The operating story remains a two-engine model. Payments is the acquisition and engagement flywheel, supported by scale in UPI, wallet, and bill payments. Lending is the monetization engine, with improving credit performance and rising repeat usage pushing up unit economics. A third lever, merchant acquiring, is now being scaled more visibly across offline devices and the Zaakpay payment gateway.

The quarter in numbers: GMV up, costs down, profits up

MobiKwik reported platform spend GMV of INR 587 billion in Q1 FY27, up 50% year-on-year. Management highlighted this as the 14th straight quarter of GMV growth.

On profitability, the company pointed to a combination of gross profit expansion and cost compression. Direct costs fell 21% year-on-year, while fixed costs were broadly stable quarter-on-quarter (with employee expenses rising as the company builds newer businesses).

The company’s contribution profit increased 66% year-on-year to INR 1,286 million. PAT swung by INR 495 million year-on-year, turning Q1 FY26’s loss into a profit in Q1 FY27.

Payments: growth in UPI and merchants, but take-rate pressure persists

Payments remains the core customer acquisition layer. The company reported 192.8 million registered users and 5.02 million merchants.

UPI was the largest growth driver. In the investor deck, MobiKwik stated that UPI transactions grew 130% year-on-year versus 24% for the industry, and that UPI GMV increased from INR 136 billion to INR 269 billion year-on-year.

Wallet usage also expanded strongly on transactions. The company reported 106 million wallet transactions in Q1 FY27, up 68% year-on-year, while wallet GMV rose 24% year-on-year to INR 125 billion. In the concall, management explained the gap between transaction growth and GMV growth as a mix shift toward lower-ticket wallet usage and Pocket UPI behaviour where users treat wallet balance like a bank balance for frequent small payments.

Recharge and bill payments continued to be positioned as a retention anchor. The company reported combined recharge and bill payment GMV of INR 89 billion in Q1 FY27, up 37% year-on-year.

Even with 50% GMV growth, payments revenue was down 2% year-on-year to INR 2,081 million. Management directly attributed this to two factors.

First, the fastest-growing parts of the ecosystem are UPI and certain merchant categories where take rates are structurally low. Second, some higher revenue categories that are card-linked were paused in Q4 FY26 and Q1 FY27 due to evolving guardrails across the industry. Management indicated it expects to resume these categories with proper controls.

The important offset is that payments gross profit still grew 31% year-on-year to INR 777 million, and gross margin improved compared to Q1 FY26. The company also reiterated that net payments margin remains within its guided range, and that investors should focus on gross profit rather than revenue in a low take-rate environment.

Lending: margins improve as credit quality matures

Financial services is where MobiKwik is demonstrating the sharpest operating leverage. In Q1 FY27, the company reported lending disbursals of INR 7,367 million and financial services revenue of INR 733 million.

The lending business is run through two models.

In the FLDG model, MobiKwik operates in moderate ROI segments and shares risk with lending partners. In the distribution model, the company acts as a marketplace for larger ticket loans where partner policies drive underwriting.

The disbursal mix in Q1 FY27 was 68% FLDG and 32% distribution. Management indicated it expects the mix to shift to around 40% distribution and 60% FLDG by the end of the year.

While Q1 FY27 disbursals dipped versus Q4 FY26, management said the decline was temporary and linked to two decisions.

One, the company consciously reduced lender concentration risk. The top three lenders accounted for 71% in Q1 FY27, down from levels above 85% in prior quarters.

Two, the company is executing a lending business transfer to a wholly-owned subsidiary to satisfy a condition linked to the RBI’s in-principle NBFC approval. Management described this migration as involving re-contracting with NBFC partners, technology migration, and operational transitions. It expects to close the transfer in August 2026.

Despite the disbursal dip, profitability improved. Financial services gross margin was 59% in Q1 FY27, and net financial services margin was 5.87% (as a percent of digital credit GMV). The company attributed the improvement to better credit cohorts, a reduction in lending related expenses, and past book recoveries.

In the concall, management also moderated expectations, stating that in the long run it expects net financial services margin to remain in the 4.5% to 5.5% range, and that Q1 FY27’s 5.87% should not be assumed as a constant.

Merchant acquiring and the NBFC path: the next phase of the model

MobiKwik is explicitly trying to diversify away from consumer payments alone. Management framed merchant acquiring as strategically attractive because offline and online merchant rails can earn MDR, unlike consumer UPI.

Merchant GMV increased from INR 107 billion in Q4 FY26 to INR 126 billion in Q1 FY27, a 17% sequential increase. The company also disclosed Zaakpay payment gateway GMV of INR 25.6 billion for the quarter in the concall.

However, management did not disclose merchant revenue or device counts, stating it is still early.

The company expects the merchant business to remain in investment mode. Management reiterated that annual merchant business burn is expected to be around INR 50 to 60 crore, and it expects merchant business breakeven by FY28.

On the regulatory front, MobiKwik highlighted a broad licence stack including PPI, BBPOU, online and offline payment aggregator licences, and an in-principle RBI NBFC approval granted on April 27, 2026.

The near-term milestone is the lending business transfer to the subsidiary (targeted August 2026). Management indicated that once this is completed, it can approach RBI for the final Certificate of Registration.

What investors should track from here

Management offered explicit full-year targets. It said it is comfortable targeting about INR 75 crore EBITDA and about INR 40 crore PAT for FY27, using Q1 as a baseline.

The key monitoring points are clear.

First, whether lending disbursals return to the INR 1,000 crore quarterly run-rate that management said it had already reached early in Q2.

Second, whether merchant acquiring continues its early momentum and moves toward the stated FY28 breakeven timeline.

Third, how quickly paused card-linked payment categories resume and whether take-rate pressure from UPI growth remains manageable within the guided net payments margin band.

The quarter showed that MobiKwik’s profitability is improving even when payments revenue is not growing materially. That is consistent with management’s framing that gross profit and unit economics matter more than headline take rates in a changing payments mix.