One MobiKwik Systems Limited (MOBIKWIK) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the MobiKwik Earnings Call for Q2 FY 2026 hosted by Investec. [Operator Instructions] Joining the call from MobiKwik are Ms. Upasana Taku, Chairperson, Executive Director and CFO; and Mr. Bipin Preet Singh, Managing Director and CEO. I now hand over the conference over to Ms. Taku and Mr. Singh. Thank you, everyone. And do remember this call is being recorded. Over to you. Thank you.

Hello, and very good afternoon to everyone, and good evening to those dialing in from outside India. My name is Upasana, and I'm here to speak about our quarter 2 financial performance. I'll keep it very simple. In December [ 2025 ], we got listed. I would like to say that MobiKwik has delivered one of its best quarters from an operational discipline point of view since our listing a year ago. And why do I say that? In both our businesses, payments and financial services, GMV and margin have grown nicely. In our foundational and core business payments, we are now amongst the top 3 fastest-growing UPI apps in India. Now this is no easy feat, especially given that we are so focused on delivering on the bottom line. In terms of the financial services business, while disbursals have grown, the real hero for me is the direct cost, which is the lending-related expense, which has significantly come off from 7.3% last quarter in Q1 to 4.4% in Q2 as a percentage of disbursal. As a result, the financial results look like this. Total income in Q2 is steady at INR 279 crores, in line with previous quarter. Direct cost is down 10%, resulting in a contribution margin of 34%, which is substantially higher than what we've been reporting for the last several quarters. Fixed cost has been controlled tightly and is down 5.7% quarter-over-quarter. Because of these reasons, we have delivered an 80% improvement in EBITDA. EBITDA is still negative at INR 6.4 crores. However, we have delivered a INR 25 crore upswing from negative INR 31 crores last quarter. You may recall that from Q4 to Q1, we had delivered a swing of INR 15 crores. And this quarter, we have delivered an upswing of INR 25 crores. We are definitely working hard to get the company back into the green. Loss before exceptional items stands at negative INR 16 crores. We have booked an exceptional item for a fraud-related incident that we faced in this quarter. We have recovered 70% of that exceptional item and the balance we have fully provided for. In a nutshell I would like to say that from the highs of last summer 2024 and having lived through the lows of the last 3 quarters, the company is now delivering a strong operational comeback with leaner costs and much, much stronger margins. We are hoping to get back into the green very soon. Thank you.

[Operator Instructions] I will first ask Mr. Harshit Shah to unmute himself.

Am I audible?

Yes, you are.

My first question is regarding we are doing lending business through some third party, are we -- can we do a gold loan business through our app? Is it possible?

Harshit, thank you for asking that question. This is Bipin Preet Singh, I'm the new CEO. So currently, most of our portfolio where we are disbursing loans on the MobiKwik app is unsecured personal loan given by different NBFCs and/or banks. We also have introduced a loan against mutual funds, which is already live in the app and it is getting some traction. Currently, we don't have gold loan distribution, but it is something that it is being planned right now. But currently, we don't have it, but it is possible. The way we look at our business is we are like a distributor of these loans. So if we have -- if we see enough interest in the partnership with gold loan companies, we are happy to participate.

The next question, I'll ask Mr. Ankush Agrawal to unmute himself.

Am I audible?

Yes, you are.

So firstly, can you talk a bit about the contribution in the payments business. So this quarter sequentially, the number is broadly stable at around INR 60 crores versus last many quarters wherein we have been seeing a strong sequential improvement in the payments contribution margin, and that has been a driver for the EBITDA growth. So can you talk a bit about why that has not grown in this quarter? And how do you see that contribution for the payments business going ahead.

So the payments business has delivered good contribution. In fact, the gross profit in the payments business has gone up from INR 59 crores to INR 61 crores. And in terms of gross margin as a percentage, it has gone up from 27.9% to 29.4%. So there is an improvement at the margin level as well as at the GMV level. The revenue in payments is not grown, but that is because we have seen massive growth on the UPI side. And as you know, UPI does not generate any revenue.

Yes, that is clear. What I'm trying to understand, say, a few quarters back we were around INR 30 crores that improved like INR 60 crores in 3, 4 quarters. And this quarter is broadly around INR 59 crores and INR 61 crores. So that's what I'm trying to understand that the growth has been lowest in the last, say, 5, 6 quarters in terms of sequential improvement in payments contribution business. So where do you see that? And was there seasonality which led to lack of growth in this quarter or something?

Ankush, so there is some bit of obviously seasonality. As you know, July, August, September typically is the leanest quarter when it comes to payments if you see past few financial years also. And that's one factor because O&D and JFM usually typically see more festive spending and more spending overall in the ecosystem. So we do expect that, that is what is one of the reasons. But also you have to factor in the fact that it has grown significantly. And from a margin point of view, we are sitting at nose to 30% with industry-leading margins of 14 bps. So we don't know how much more it can expand given that UPI is expanding for us. However, we do have some areas where growth is going to come both from customers and maybe later on more from merchants. That will start showing up both in the top line and in the contribution over the next few quarters.

Okay. Secondly, would it be possible for you to give a rough split of, say, which are the payment areas which currently contributes to revenue. We know that UPI doesn't, bill payments does, wallet does. So broadly, if you can give a sense of which are the areas which are profitable like which generates revenue and what would be the gross GMV split that you would be able to share.

So we have -- for the first time we have put some numbers out in terms of what is the pure numbers that we are seeing that's disclosed in the earnings PPT that is about 40% of the GMV and the remaining 60% is where we have wallet and bill payments those categories so where we do make revenue. Primarily we have the industry-leading wallet with highest amount as per the wallet data that is available on the RBI website also. And that's where we actually make most amount of money. So I don't have the split of wallet and bill payments, but still it will be wallet 80% out of the remaining 60%.

Okay. Okay. I got it. And Zaakpay would be included in this 60%, right?

Yes.

I will ask Mr. Akshay Gupta to ask his question.

I have 2 questions. So first question is like what specific lever beyond cost optimization, like will sustainability drive EBITDA profitability? And how confident are you of maintaining margin once the marketing and the lending volumes scale up again? And second question related to like post this fraud, how has your merchant onboarding and risk scoring model evolved post this incident?

So I'll take the first part of your question. Look, I mean, what you have to understand is MobiKwik is still -- even though we have achieved good scale but given the size of the payment system ecosystem out there and the financial ecosystem out there, we still have a lot of growth left. And we look at both payments where we can -- we have disclosed the UPI numbers. We are -- we have opportunity to grow significantly in users and payment GMV, which we have been demonstrating. We are one of the Top 3 Fastest Growing UPI Apps. Now all of those users who come for UPI, direct UPI, P2P and all those things don't make money, but there are some ways to make money. Some of them end up using the wallet. Some of them start using bill payments. Some of them start taking loans from us, right? That has been the business model of MobiKwik. And so when we look at payments certainly there is good growth in payment GMV as well as users and transactions that's reflected in the UPI numbers as well. As far as loans is concerned, you can see that where we used to be in the financial services business, it was easily above INR 100 crores of revenue every quarter and at 40%, 45%, even 50% of margin. This quarter, after recovery from previous couple of quarters until, let's say, Q4 of FY '25, we were seeing a decline because last year, unsecured lending was very tight. So lending did dry up because of the partners not willing to give loans, unsecured loans. But it is on the demand again. And there's also a change in the way how we do accounting or how we have historically done accounting. So currently, the revenue that you see INR 60 crores is coming at -- it is coming again back at 40% plus margin, which is the place we really wanted to be in because if you have a business where you can make 40% as your take rate as your margin, then all we have to do is ensure that we scale it up responsibly properly. It has grown from INR 690 crores of disbursal last quarter to INR 800 crores. And so there is a lot of more headroom of growth, keeping the margin the same. And that is where I think a lot of the juice on the bottom line is going to be because clearly, this is much below the level that we ourselves have been historically from a scale point of view on the digital lending side. And when this fires along with the payments, then I think you can do the math and you can see that it makes profitability inevitable.

My next person is Mr. Rahul Jain.

Is this audible?

Yes, you are audible.

Sure. So firstly congratulation on good execution. My questions for the lending business is why the take rates are lower in this particular quarter? Is there a mixed change in the business in terms of some secure part or another element? And secondly there was marked reduction in the lending cost, so are these pertaining to any residual cost pertaining to the ZIP business or this is more to do with some alignment or absent of DLG cost or any other factor that would have supported here?

So first question is very simple, Rahul. So basically as we evolve ultimately when you distribute unsecured loans and you do FLDG kind of risk arrangement that's when you get the highest margin. But for better discipline and for various reasons, you can't give -- as a MobiKwik, you can't give loans of INR 10 lakh or even INR 5 lakh, INR 7 lakh and take risk sharing arrangements. So there, we typically tie up with companies and do pure distribution. And when we do pure distribution, the margins are typically top line itself is 2%, 3%, 4%. So because that is getting added on to the FLDG arrangement, that's why aggregate you see that there is a slight decline from 8.4% to 7.59% on the overall take rate of the lending business. But we do believe that the sweet spot for us is going to be this only. Ultimately, the main thing is what is the bottom line. And the bottom line is that out of 7.5%, we get to keep 3% plus in our pocket as a profit from the lending business and that is what we want to continue.

And Bipin on the cost part of it, what has led to this cost drop? Is it DLG element which was relatively much lower this quarter?

So I'll tell you since last quarter, if you see what lending is a strange business where if you don't do the business, then you only get the cost, but you don't get income. So if you see from the last quarter, let's say, just before IPO, our disbursals were reducing, especially on the EMI side. And so it hit a bottom about 2 or 3 quarters back, I think Q4 FY '25, it was the bottom, since then it is increasing and as it increases basically the cost of the older book is reducing and the cost of the -- and the income from the newer book is coming. So that is something that we have explained earlier also. So clearly, that is what is happening right now. And I would say where we are today is this quarter and upcoming quarters is a more stable outlook of margins, which we expect that will continue.

So like you just alluded that this quarter, we are at 2.8% basically the lending margin is what you are saying is the right way to look at it and the current level of margin in the lending business is a more sustainable lend rate.

Yes, that is -- no, so what we see today is the lending margin is at 3.17% historically also if you see when we were operating at scale, it was 3% plus 3.5%. There is obviously a lot more we can do. We can do more cross-sell, but this is a sweet spot, 3%, 3.5%, 4% is what this business makes. So if you disburse INR 100 of loan, especially unsecured loan, you can expect to make 3%, 3.5% as your net profit in the business.

Right. Right. And secondly...

Sorry, sir there are other people in the queue. Can I ask you to come back and ask the next question? Maybe I can take the others. I will ask Mr. Sunil Jain to unmute himself to ask his questions.

Yes, am I audible?

Yes, you are.

My question again relates to financial services. So you said that the take rate is around 8% and then margin is at around 3%. So what will be the growth driver, means if you see your credit partner AUM, which is around INR 1,200. So it's there since last 3 quarters. So what will be the growth driver for year.

So growth driver is simple, Sunil, that basically you have -- if you have good users and more good users on the platform, then our credit partners want to disburse more loans. It's as simple as that. And they want to select good quality customers to give loans to so that they can have a credit cost which is controlled and therefore, can expect good profits. And that is -- on that we are aligned with them. And as we source most of our users from our payments business and what we said is that we have seen significant growth in the payments business in terms of the transactions, the share on the UPI is increasing. So we expect that many of those users who are using our app for UPI or payments will be eligible for the loans. It could be unsecured loans with FLDG, it could be unsecured loans just purely on distribution. It could be other secured products like we have loan against mutual funds or like one of the gentlemen was asking about gold loans. Some of those products we don't have right now are very, very early, but that is how we will be cross-selling these products from our lending partners to our customers and make margins.

So ultimately, it's AUM which need to grow?

So a lot of our business comes from disbursal, not just necessarily only AUM. AUM is one part of it. But I'll give you an example, if you disburse INR 100 crores, you do end up making between 3% to 4% purely as distribution even if your AUM is not growing. That's one. Second is AUM is relevant only when we do FLDG kind of business. When we do purely distribution, like, for example, for some of the NBFCs, we do disburse loans where we don't take any credit risk under FLDG. So that doesn't come in credit partner AUM.

Okay. So if I talk about FLDG, then how much disbursement might have happened or how it is growing and how you are targeting it to grow?

Yes, specifically to your question, 80% of the disbursal has been under the DLG model and the balance 20% is on a distribution model.

I think -- one way to look at it is, again, I would bring it back to what we are disclosing. You please look at how much disbursal we are doing. So if we are disbursing, let's say, INR 800 crores last quarter, Q2 FY '26, then we are saying our unit economics is we are making top line 7%, 7.5%, right? So that is inclusive of both FLDG and distribution. Currently, we are not disclosing the split but maybe going forward, we will look at it. Currently, as Upasana is saying, it's 80% as FLDG and 20% as distribution.

Okay. And this disbursement, whatever you had done like INR 800 crores plus. So this is likely to -- anything is there in your mind how much more it can grow and how fast it can grow?

So it can grow a lot. I mean there are -- our peers like there are digital lending easily doing INR 800 crores, INR 1,000 crores a month, and we are doing INR 800 crores. So people have been doing INR 800 crores a month last year, right? We are still only INR 800 crores a quarter, and we have lost many more customers. We have taken a more disciplined approach towards this because like I said, we want to grow this in a structured fashion while preserving the margins because we know that we need to grow it only a little bit more in order for us to become profitable. And from there on, the journey will continue. So we are not in a hurry to grow this very, very aggressively at the cost of the portfolio.

I would now ask Shlok Akolia to unmute himself. Okay, we cannot hear Shlok, may be I will move to the next person and perhaps Shlok can join again. I'm moving to next queue is Mr. Bhargava. I'm unmuting you sir.

I have got one question with respect to the exceptional item that the company has presented with respect to the fraud that has been identified. Just would like to understand what has actually happened during the period, for how much period was that fraud has taken place? And what the internal controls in the company couldn't detect?

Yes, sir. Thank you for that question. So the incident took place specifically on 12th of September, and it was caused due to a technical bug in our system, which is an inadvertent mistake of our people as well as our processes in terms of the software development change management process, where it should have been caught, but it was not caught. The specific code release had gone out on 9th of September. So while the bug was there from 9 to 12, it was not -- it did not impact the company from 9 to 11, and it is substantially exploited in the wee hours of 12th morning by about 2,400 merchants, registered merchants of the company from an area in Haryana called Nuh and Mewat. And these people figured out the bug where when a payment -- a customer was making a payment on a QR code using -- where the customer was a MobiKwik app customer and the QR was also deployed by MobiKwik, the money was -- even if the money -- the transaction had failed on the customer side and the money was not debited from your account as a customer, even then the merchant side, it was showing that it has -- the payment is successful. And therefore, the amount got accumulated. And in the early hours of 12th, they were able to get a payout for that, an unauthorized payout for these transactions. And of course, promptly in the morning as soon as the company discovered it, all payouts were shut down. We have reported this matter fully transparently to the stock exchanges on 16th of September to our regulators for our various licenses. And as a matter of fact, from a financial perspective, I would like to give you an update. Initially in our FIR registered against these merchants, the estimated amount of unauthorized settlements was INR 40 crores. Out of that INR 40 crores, the company has so far secured INR 28 crores, of which more than INR 21 crores is in the bank account of the company recovered from the merchants. For the balance, we have court orders and so the credits to the bank account will come in the short term. So after removing the secured amount, the net estimated amount is about INR 11 crores. And from a perspective of abundant precaution, the company has taken this as an exceptional item in the current quarter. And while we continue to make aggressive progress in terms of legal recovery process on this amount as well. And as and when we collect this money month-over-month, quarter-over-quarter, it will get reported in the financials of the company.

We appreciate the company's transparency with respect to this. At the same time, keep the control at bay so that nothing happens in the future.

Yes, yes. I was just about to get to that. The company has taken this matter very seriously. And to that extent, we have appointed a third-party advisory to help us analyze and identify the gaps in terms of the processes of the company, the org structures and the people of the company as well as the policies of the company. And I can tell you some of the early steps that we have already taken. For example, we have blacklisted certain pin codes and geographies in the country where we will not be onboarding merchants. We have enhanced our guardrails in terms of newly acquired small merchants, what are the velocity checks for them, the spikes in terms of GMV and payouts for them. And we have also made significant updates in our software development process where additional quality checks as well as code reviews have become mandatory. Outside of this, we have also, from an organizational change perspective, decided to create a separate risk function or department in the company. Although we have merchant risk and payment risk teams in the payments business and credit risk teams in the lending business, we will bring the entire ambit of enterprise risk as well as a third-party risk under one umbrella of a CRO for which we are in the process of hiring.

I will ask Mr. Sanjay Ladha who is next in the queue to unmute.

Is my voice audible?

Yes, you are.

Sir, just wanted to know in the last call as well, we have said that our payment take rate will fall or not fall further and it will stabilize at 60 basis points, 55, 60 basis points. In this quarter, the payment take rate has fallen to 48 basis points. So just wanted to know your thoughts and what's the full year target? Or is that one-off or we see the take rate will go up to 55, 60 basis points again in the year itself?

Thanks for asking that question. No, you are very right that the take rate in payments has come off from 56 to 48 basis points. And I think we also in the previous slides in the payment section have reported that UPI is growing very rapidly for us where from a 35% share of our GMV, it is now 40% of share of our GMV. And because of that, our take rate is coming down. But I would also say that look at the net payment margin, which is below the 48 bps take rate post our payment gateway loading cost of the wallet and the user incentives, we are still retaining 14 bps of net payment margin, which is one of the highest net payment margin in the fintech digital payment sector. So I would say that while we are working with the growth in UPI, which we want, but at the same time, we are trying to manage the bottom line. A few additional line items I will say here is that a good chunk of our UPI volumes, which we have reported for the first time as an individual item are coming from our product pocket UPI, which is where the user is paying via wallet on the UPI rates and -- while this part of the UPI GMV also does not make any revenue right now, there is an expectation that revenue might start coming on that part of the UPI GMV, which will add to our take rate.

You rightly mentioned that your cost has been going down or it remains flattish in a matter and therefore, your margin are 14 basis points, 14% of the net payment margin. And in the same way, I just wanted to know in both the ways in the financial services segment as well and the payment take rates are going down, but the cost has been quite impressive. You guys have done that on that side. So just wanted to know these numbers which we see at the bottom line of this is the number maintained over the years going forward as well? Or these are one-offs or it can go up as and when we see again we wanted to increase our customer base on the payment or on the merchant side and therefore, the marketing and that expense will go up and therefore, things will go up. If you can comment on that side?

Yes, I get it. I get it. No. So absolutely, let's take one at a time. So if you see payments, we are showing you the net basis point every quarter. And you can see that it is in the same range between 13, 15 and 14 bps. We are continuing to retain it in the same range. In financial Services, if you will see, we used to report 3%, 3.5%, 4% as the net margin. And then last 2, 3 quarters, we were hitting the rock bottom. And this quarter is the first time we are back in 3% net margin in the Financial Services business. We expect that both these businesses will continue to operate with these margins, which are the new normalized margins. And also, if you will see these margins land us up eventually to our contribution. And if you see our contribution margin in quarter 2 last year, it was at 40%. And then after that, it has been in the range of 27%, 23% to 27%. And this quarter, we are at 34% contribution margin. which is exactly what we are trying to say that both the margins are expanding. These are healthy margins. And we do expect that in the coming quarters, we should improve our contribution in totality even further from 34% and thereafter start delivering profitability at the bottom line. That is exactly what we are trying to say. These are not based on one-offs. This is actually the really normal position of the business, which was significantly impacted last 3 quarters because of the downfall in the lending business. The lending business is still making a comeback. While the cost has come down, the revenue from financial services, even this quarter is about INR 60 crores. And if you check our quarters last year, we were reporting INR 100 crores, INR 120 crores, even higher revenue from that business. So we have still not achieved the best outcome in financial services. We are on the comeback is what we are saying. So these numbers should improve further as we go forward.

So this lending related expenses which is a percentage of GMV is 4% is new normal, you are trying to say that.

Exactly.

Okay. So just wanted to know that our business model on the financial service side is based out of DLG that is not a very -- basically most of the companies as you scaled of and as you figure out the business that model is not a viable model for the longer perspective if I tell you because our peers has been defocusing that business model and we are focusing that business model. So that's one area where I want your clarification that you -- why -- because the lenders are not giving proper lending rate or something sort of that or our risk parameters are not that place. So therefore, we are doing DLG model. If you can clarify on that side.

I think Sanjay. So this is -- we don't agree with this point of view because look, I mean, the Reserve Bank of India has specifically approved DLG as a proper compliant model of digital lending. And so there must be a reason why this has been approved. And it's also now -- model is not the same as how it used to be, let's say, 2 years ago. Right now, there is a lot more transparency in the entire business. Even lenders are required to disclose their numbers when they work with LSPs like us. You can go and check on their website as opposed to disclose what numbers they do with MobiKwik or any other LSPs. We are a lending service provider. And also, there is a clear focus on customer protection with capping rates or making sure that customer is not taken for a ride by charging too high of an interest rate or any charges which are not bad or anything like that. So along with that collections, et cetera, there is a clear code of how the collections needs to be done. So it is fully compliant. And we believe that today DLG is a big, big part of the entire digital lending scenario in India. It's not just distribution. So for us, we will continue to pursue a healthy mix of DLG -- FLDG as well as other pure distribution mechanisms along with secured loans where the risk will be nonexistent.

The next person in the queue is Darshil. Darshil you can unmute yourself.

Hopefully I am audible.

Yes. Yes, you are.

Congratulations on such a great jump in profitability. We hope that this continues. So on those lines, like the way we are going right now, I feel we should be able to reach EBITDA positive by the next quarter. So I would want to ask the furthest [indiscernible] we see ourselves being PAT positive.

So what I will say is that -- thank you, Darshil. So you have hit the nail on the head. So look, I mean, there is about INR 6 crores, INR 7 crores of financing cost per quarter and I think INR 2 crores, INR 3 crores depreciation cost. So it's like total INR 10 crores of real cost below the EBITDA. So you can do the math and find out when we will be PAT positive.

So this rate of improving by around INR 20 crores-odd in EBITDA will continue, right? Like that's the rate that we can take roughly.

So this quarter, we have improved by INR 25 crores. Previous quarter, we have improved by INR 15 crores. So we do want to say that this is the range in which we should improve, and we are definitely trying to get to profitability as soon as possible, first at EBITDA and then at PAT level. So that is our endeavor. We will be working hard next quarter also just like this quarter. We do hope that we will turn profitable sooner than later.

That's really great to know. So I just want to know that while we are doing great work on profitability, I understand our users and everyone increasing on UPI payments up there also but our revenue is in range right now in the last few quarter. So when do we see the push to revenue going forward for a higher growth rate and with that also I want to know that employee cost also reduced. So are we reducing our headcount or what is that [indiscernible].

So there is -- on headcount there no as such reduction is -- we are just -- what I would call is seasonal variations. We have a strong team, leadership team and extended team. We continue to work accordingly. I think there is obviously always minor variations in the numbers from quarter to quarter. On the revenue side, what I would like to say is I think what I need you to focus on is where we were last year, where payments was generating between INR 150 crores, INR 160 crores, INR 170 crores of top line revenue and another INR 130 crores, INR 150 crores was coming from the lending piece -- from the financial services. Right now, payments has actually significantly grown if you compare to the last year and sequentially also this quarter is seasonal, so it's a little low. But payments has grown significantly. And lending has actually degrown because from INR 150 crores, INR 150 crores to now it is INR 60 crores. Also, there has been change in the way we book the lending revenue, et cetera. So therefore, there is actually impact on top line revenue purely from the lending side, which as it will recover first, it will recover in the bottom line because it's highly profitable business and then it will start impacting the top line over the next few quarters.

Okay. That helps a lot. So basically, I could summarize that Q2 was a bit seasonally weak and we had some accounting changes. So H2 would be a better quarter in terms of revenue profits [indiscernible] is working very hard on it and that's reflecting -- could we quantify like how much -- what is our target? I know it's -- I don't want to hold you on to it.

Darshil there are lot of people on the queue. I'll just take this last question.

So I understand it's very difficult to quantify. But like when do we feel our lending also business reaching back to where it was? I think right now from all the microfinance companies, they are also starting to adjust to the card [indiscernible] availability. So how do you look at it? Like it doesn't need to be an exact number, but how do we look at it maybe in FY '27, we can back to where we were. So any comment on that growth would really help.

So look, while we are improving the disbursals last 2 quarters, we grew the disbursal in credit by over 30%, this quarter by 16%, but these are all high-quality disbursals in the long-term sort of 12-month loan product. And you are well aware that as of April 1, we have discontinued our short-term BNPL product completely, which was a sizable amount last year in every quarter. So from INR 60 crore revenue mark this quarter, it will take us time to get to first INR 100 crores and then INR 140 crores, which was the high previously where BNPL was baked in. We don't expect we will reach that INR 150 revenue number in lending alone this financial year. It will be something that we can look forward to in the next financial year.

I'm going to ask Shlok Akolia, who is joined on this call. Shlok if you are able to hear me, please unmute yourself. We're still not able to hear you. Maybe you can send me your question in the Q&A. Meanwhile, I'll move to the next person. Sorry about this. I will move to Mr. Smith Shah, Smith you can unmute yourself.

Am I audible?

Yes, you are audible.

Yes. Congratulations on a good improvement in the operational performance. And my first question would be how much is Pocket UPI as a percentage of payments GMV? A rough number would also help.

Yes. We don't have that handy to disclose this time. We will see.

What I can tell you is that when you look at the wallet numbers in the RBI website in terms of GTV, that will tell you that is upper cap of the Pocket UPI numbers.

Okay. Got it. And we were expecting some MDR or interchange fee on Pocket UPI. So when are we exactly expecting this? Can you give us a rough time line?

So the update on that is that the industry body has already agreed on that revenue commercial and it is -- we are awaiting that circular to come from NPCI. And we were also expecting that it would have come in Q2, but it has not come so far. We are hopeful to receive that circular at the industry level. And as soon as the circular comes, we expect that within a couple of months that revenue will start streaming in.

Okay. Okay. Got it. And one more thing like the digital credit GMV has grown 17% this quarter sequentially. If I extrapolate this number and if you do a 15% sequential growth in Q3 and Q4, you get to an annualized digital credit GMV of somewhere around INR 3,500 crores. Now considering that all the one-offs are behind us and this is -- keeping this as the base, by when do you think that you can double this considering that it's a low base as compared to our competitors?

So good question. Look, I mean, I don't want to comment on your projections. You just don't draw a straight line on what has happened. But what I want to say is that there is -- we don't want to be in a mode where we aggressively grow unsecured digital -- unsecured lending. So we want to be systematic and disciplined about it, especially because there is also a risk component for the risk sharing part that we are doing. So we will see that happening in a structured fashion. We don't want to grow it extremely aggressively at the cost of the risk in the portfolio.

Okay. But like 15%, 20%...

Yes. So I think that's a reasonable assumption.

Okay. Okay. Got it. And just one last question. How many new lending partners have we added this quarter?

So we have about 2 new partners that have been added. Total number of partners is around 10 and out of which roughly half would be the major ones.

I'll ask Mr. Pratik to unmute himself. All right, I think there's a challenge with Pratik joining us. I will come back to Mr. Rahul Jain.

My question is related to the fixed cost side of it. We have seen significant saving, including the employee cost. So if you could attribute what are the 1 or 2 reasons of a major saving happening in the other expenses as well as what could have led to the employee cost also going down sequentially?

So Rahul, there is not much change. There is some change. It's a little bit -- it's a little reduction, about 5.5% reduction. We do expect this cost to stay stable also. I wanted to say actually [indiscernible] will end up saving cost and wish it will especially on the operation side going forward. But currently, we don't have any savings like that to talk about. But we do expect that going forward, maybe in a few quarters, we'll be able to demonstrate savings in fixed cost due to automation of tasks, especially operational tasks which are manual in nature.

Right. And just last bit from my side. There was this page on the future opportunities that you have highlighted. So if you could talk about what are the time lines and revenue potential we are expecting from that and especially on the collection side of the offering that we have, will it be pertaining to the lending that we will distribute or it could be offered as a SaaS to even other bank or nonbank partners?

So on collection side, what we are envisioning is we have built our own in-house collection system, which we are using, and we are adding a lot of intelligence and AI on top of it. So we believe that once we have good confidence in this particular product, which we completely use. So we don't use any external software for managing the collections that we do. This is completely homegrown product. So we do expect that we will be able to make it very good and very attractive and then bring it to the market and offer it to the industry, especially banks, NBFCs and even other regional lenders who can use it as a SaaS or a hosted model in order to leverage the same features and functionality that we are building for our own use case.

And in terms of your other question, Rahul, in terms of the value unlocking of these future opportunities, I think you listed them in the order in which we expect them to pan out. So Zaakpay can be the first one that can start delivering in terms of numbers. followed by the wealth or the broking side, where, as you know, we do have a wealth tech offering on our app, but we have not yet launched the broking platform and it is under development. So Zaakpay followed by broking followed by FX-Retail. And like Bipin mentioned, we are using the Quick Collect AI first to bring efficiencies in terms of collection on our own business, and then we will look to see if we can monetize it externally.

Upasana and Bipin, there are a couple of questions on the Q&A chat box. I'll take them one by one. This is from Shlok Akolia who couldn't unmute himself. He's from Xylem PMS. He's written, congratulations on a solid quarter. His first question is, could you elaborate on the long-term vision for Zaakpay? And how much capital do we deploy here annually? And what's the road map towards its profitability and any monetization? That's question one. The second question is, as the highest cost in payment MDR is towards payment gateway, so how are we trying to integrate Zaakpay as a payment gateway to reduce overall costs.

So I think the first question I'll take first in terms of Zaakpay and how much are we willing to invest in this business. So I would say that we have just gotten started. In fact, I would urge all of you to check out our new website, zaakpay.com, where we are making the experience of onboarding super easy and convenient, especially for first-time Internet founders. So we are just getting started on that. We don't expect that it will give us very solid outcomes in terms of the MobiKwik top line and bottom line. But I do expect that where it is because it's coming off a low base, it's a small business right now. We do expect that it will grow nicely. And in the next year, it should start giving us some meaningful numbers in terms of consolidation to the top line and the bottom line. Zaakpay by itself is operationally just slightly negative, a couple of crores plus or minus. So it's not really a big drain on the overall financials of the company. But as the business is scaling up, we do expect that it will break even also in the next few quarters. Your second question on the payment gateway cost that is for MobiKwik and whether we are using -- how do we use Zaakpay to bring efficiencies. I want to tell you that we are already using Zaakpay as one of our main payment gateways that we use for all of MobiKwik's business. Of course, because MobiKwik's business is at significant scale, we also have 3, 4 other payment gateway partners, but Zaakpay continues to be in the top 2 or top 3 partners at all times. And we do exert effort in terms of the integrations with banks and the alliances with banks to continuously bring down the payment gateway costs. And you can see this quarter also, we have delivered strong improvement in the payment gateway cost as a percentage of the total payment GMV that has been processed.

I'll take the next question again in the chat. Could you elaborate any of the insurance? Or do you have an insurance cover for digital fraud?

We do have insurance for digital fraud. And so we will be utilizing all of these opportunities, whether it is a legal recovery process or the insurance process to bring back the exceptional item of INR 11 crores that we have taken this time.

The next is from [ Saeed Jaffrey ]. The next question he's asked is the annualized GMV per user for non-UPI has been flat at INR 5,500 per user for the last 5 quarters. How should we think about this? While we have large user base, what is our MTU and your thoughts on activation rates?

So in terms of MTUs, firstly, we don't disclose that as a KPI. We hear you in terms of the metric that you have revealed the INR 5,000 per user. I would like to say that we have registered a lot of customers over the years. But in the recent past, we are now working harder to acquire higher quality users so that they would do a minimum of 3, 4, 5 payment transactions on the platform and sort of first increase their sort of GMV or transacting value per user and then look at their revenue per user. And then from payments, take them into the other verticals in terms of cross-sell for a UPI user, take them into bill payments or wallet payments and lending and wealth so that we can improve our lifetime value from the customer. But all of this is from the recent time. So it will take some time to translate into the derived KPIs that you're talking about.

From Smith, there's another question in the chat box. He's asked, what's the status of the NBFC license.

So the NBFC license work is in process. I think it was reported publicly that we had infused the required network capital -- we had infused the capital required for the network to make an application. So the work is ongoing. And as and when we have a firm update to provide, we will.

There are a couple of hands in the queue. I'll just check if they have any questions. My first person is Mr. Harshit Shah.

Am I audible?

Yes, you are.

I have one question. We are doing 2 kind of a lending business. One is through FLDG and one is through distribution. Just want to understand what margins do we make if we make only distribution business and what margins if we make after deducting the operating expenses and risk-related charges. So is it not profitable to make our distribution business more? This is my question, sir.

So it's hard to give you exact numbers, but what we can tell you is that as a take rate, you end up making more in the FLDG business, which is why your top line can go as high as 7%, 7.5%, which we have reported. In distribution, you typically make less, maybe 2.5%, maybe 3%. If it's secured product, it's even under 2%. So what we are reporting currently is consolidated over to with 80% being in the FLDG business. So it reflects more the reality of the FLDG business. But in distribution, you typically don't make more than 3%, 3.5% even for unsecured loans.

But sir, just to -- on that point, but we are not getting any risk in the distribution part. In this business, if the portfolio goes on a toss due to market condition, then it will have an impact on the profitability, sir.

So there are 2 different things. One is there are certain kinds of business that can only be done in distribution and there is certain kind of business which is better done in FLDG. I think that is what I think I would like you to understand. So it's not that the choice is always there. For example, a lender may want to do -- we work with a lender today who does average ticket size of INR 5 lakh. Now that INR 5 lakh, we are not willing to underwrite in FLDG. So there, we do a distribution, but there -- this is, let's say, an income lender. But there, my distribution income is only 2%. But I'm happy to do it because I don't want to take the risk of owning a loan of INR 5 lakh. But then there are other customers where you can give loans to INR 70,000, INR 80,000 or INR 50,000 even that business is better done in the FLDG mode because nobody will want to do a distribution because ultimately, there you will make money by building the relationship with the customer. Absolute margin will be lower, but you will grow and you will do repeat loans over a period of time with that customer. So there is more to it than what you just said. There is also -- there is about what kind of customer it is, what kind of lender wants to do that business, how do we look at certain customers, what is the profile and distribution of those customers on our portfolio?

So it will be a mix of both...

Yes...

Sorry, Mr. Harshit, would that be your last question?

Yes, yes, ma'am. That's my last question.

All right. Upasana and Bipin in the interest of time, there are a few questions, but I think we can take them offline if you permit me.

Yes, that's fine.

Yes. All right. I think there are no further questions, otherwise, if there is anything to write into me, and I can pass it on to the management. So on behalf of Investec, thanks, everybody. Upasana, I would request you to make your closing remarks before we end this call. Thank you, everyone.

Thank you, Swapna. Thank you, Investec team, and thank you to all the interested analysts and investors who joined the call. Like I mentioned at the beginning of the call, we had a very strong wicket in terms of EBITDA profitability and growth performance before our listing. Last 2, 3 quarters, we have been struggling with the sentiment in the market on the unsecured lending side. This quarter is the first quarter where we are truly happy with the kind of operational performance we have delivered. It has brought us closer to the EBITDA breakeven mark, and we are working hard to make that happen sometime soon. Thank you so much.

Thank you, everyone, and you may now end this call.