MobiKwik’s payments business recorded a 53% year-on-year rise in gross merchandise value to ₹3,83,882 million in Q1 FY26, and management says margins moved into the high 20s while operating losses narrowed. The company reported further volume growth into Q2 FY26, and management has outlined a path to EBITDA breakeven for the fiscal year driven by higher payments margins and tighter cost control. Lending disbursals via ZIP EMI also recovered, while Q4 FY26 produced a small net profit of ₹4.38 crore that relied heavily on non-operating income. The next quarterly results will be the clearest test of whether those operating improvements hold up without one-off items.

MobiKwik’s headline number for Q1 FY26 was a 53% year-on-year increase in payments gross merchandise value to ₹3,83,882 million, with sequential growth of 16.1% on the quarter, the company reported. Volumes continued to rise in Q2 FY26, when the payments GMV was reported at ₹432,167 million in the company’s Q2 release. The surge in GMV came with growth in the platform’s user and merchant footprint. The registered user base was cited at about 180 million, while merchant counts were near 4.6-4.7 million across the Q1 and Q2 disclosures.

Rising volumes and thinner but improving margins

Payments revenue rose only modestly, but margins have been the key story. The company said payments gross margin expanded from the mid-teens a year earlier to roughly 28-29% in the FY26 quarters, helped by lower gateway and incentive costs. Management also reported a steady net payments processing margin near 14-15 basis points. Those improvements are what MobiKwik points to when it sketches a route to EBITDA breakeven by the second half of FY26.

The profitability trend was visible in the headline EBITDA numbers. On a standalone basis, the company narrowed its EBITDA loss from ₹(457.6) million in Q4 FY25 to ₹(312.0) million in Q1 FY26. Management described a further quarter-on-quarter improvement into Q2 FY26, framing it as an 80% QoQ EBITDA upswing equivalent to an INR 24.8 crore improvement. That sequence of quarterly results culminated with Q4 FY26 showing a small net profit of ₹4.38 crore and an operating margin of 3.49%, which the company noted was only the second consecutive profitable quarter in the recent run.

Lending recovery, but questions on quality

The lending arm, ZIP EMI, showed a clear sequential recovery after earlier disruption. ZIP EMI disbursals were reported at ₹6,931 million in Q1 FY26 and rose to about ₹8,071 million in Q2 FY26, according to the company’s results. The lending business’s gross margin moved sharply higher, from single digits to low double digits in Q1 and into the 40% range reported for Q2 in one of the company’s commentaries. That swing was driven by higher take rates and lower lending-related expenses as a share of GMV.

Mastheads

Take rates in the lending business were reported at roughly 8.3-8.4%, and lending-related expenses were described as falling materially quarter on quarter. Management presented this as evidence that the lending franchise could return to healthy economics once origination and collection costs stabilise, and that it would contribute meaningfully to company-level profitability as volumes recovered.

Despite those gains, analysts and some post-quarter commentary flagged structural risks. A company filing for Q4 FY26 showed that other income accounted for 88.73% of profit before tax in that quarter, indicating heavy reliance on non-operating items to convert operating improvements into headline profits.

Institutional ownership and return ratios were described as weak in post-quarter analysis, and market commentary warned that the improvement may be fragile given negative return-on-capital metrics and dependence on one-off items.

The company’s own disclosures include some contradictions. One company filing lists payments GMV as ₹3,83,882 million for Q1 FY26, while another article cited the figure as ₹384,000 crore, creating a scale discrepancy between the two accounts.

Forecasts for future lending margins also vary across the material. A management statement that lending margins would reach 40% by H2 FY26 appears only in a single piece of commentary and isn't corroborated across all of the company’s financial summaries.

For investors, the combination of sharply rising volumes, improving unit economics and still-questionable profit quality will be a mix to parse. The payments business is evidently scaling, and the cost levers cited by management have started to show up in margins. But the dependence on other income in Q4 FY26 and the mixed signals on return metrics mean the market will want clearer proof that operating profits, rather than one-off items, are driving headline results.

Management has framed the path to EBITDA breakeven for the fiscal year around continued margin expansion and cost discipline. Whether that pathway translates into durable earnings will be visible in the company’s next set of quarterly results and the accompanying earnings commentary.

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The company’s next quarterly results and earnings commentary will be the clearest test of whether the operating-margin gains can sustain net profitability without heavy reliance on other income.

This article was created with AI assistance.