India’s fintech major grapples with a pause in its flagship ZIP product, witnessing a steep revenue decline and spiraling losses despite expanding user base and payment volumes.
Fintech heavyweight MobiKwik delivered a sobering set of numbers for the first quarter of FY26, reporting a 20% year-on-year drop in revenue and a staggering sixfold surge in net loss to Rs 41.9 crore. The company’s financials for the quarter sharply contrast its previous growth narrative, as core products stalled and operational challenges mounted. According to filings and management commentary, intensified competition, regulatory factors, and a temporary pause in MobiKwik’s marquee ZIP product played pivotal roles in the recent downturn. Investors and analysts are now keenly watching whether this setback is a blip or signals deeper concerns for India’s digital payments pioneer
Market Overview MobiKwik’s Q1FY26 results reflected significant headwinds for the company within the fast-evolving fintech ecosystem. The firm’s consolidated net loss ballooned to Rs 41.9 crore, up from Rs 6.6 crore in the year-ago period, even as the loss narrowed sequentially from Rs 56 crore in the previous quarter. Total income for the quarter clocked in at Rs 281.6 crore, representing an 18.6% year-on-year fall, while revenue from operations slumped by 20.7% to Rs 271.4 crore.
The primary factor behind this revenue contraction was the pause in MobiKwik’s original ZIP product, a popular short-tenure credit line offering. The company’s filings note that while its ZIP EMI disbursals remained steady at Rs 693.1 crore, the switch in focus to longer-tenure products coincided with the revenue dip. Expenses surged as well, with financial guarantee charges jumping to Rs 21.4 crore from just Rs 2.5 crore a year ago. Other major costs for the quarter included payment gateway expenses of Rs 143 crore and Rs 42 crore in employee benefits
Despite the financial setbacks, MobiKwik’s operational scale continued to grow. Registered user count stood at 180.2 million, while the merchant network expanded to 4.64 million. Gross merchandise volume (GMV) on payments climbed sharply by 53% year-on-year, hitting Rs 384 billion, reflecting sustained traction in digital payments usage. However, these operational gains failed to offset margin compression and increased risk costs, as the business mix shifted heavily towards payments, offering limited operating leverage.
On the capital markets front, MobiKwik’s stock was trading near Rs 246.80, with a market capitalization of Rs 1,929 crore ($227 million) at quarter-end. The listing had initially seen the stock touch a market cap of $472 million in December 2024, but subsequent operational underperformance led to a retracement
Expert Opinions: According to analysts, MobiKwik’s Q1FY26 numbers underscore both the scale of its franchise and the growing pains of operating in a crowded, low-margin space. “The complete pause in the core ZIP product has meaningfully impacted revenue streams even as GMV and user numbers have expanded. Operating leverage remains elusive, and the financial services pivot hasn’t yielded the margin improvement investors hoped for,” said Sudeep Shah, Head of technical and derivatives research at SBI Securities. Shah pointed to persistent EBITDA losses as a drag, noting, “While there has been a positive short-term momentum in the stock, the underlying fundamentals remain challenged.”
Kalp Jain, another market observer, warned that the current rebound in MobiKwik’s share price should be seen as a technical bounce rather than a sustained uptrend. “The absence of meaningful traction in high-margin financial services keeps pressure on the company’s profit trajectory. Unless ZIP resumes or new growth engines contribute materially, the operating matrix may remain weak,” Jain commented
Sector analysts noted that MobiKwik’s increased financial guarantee expenses and higher operating costs have squeezed profitability despite growth in GMV and margins in select verticals. According to analysts polled by Moneycontrol, “Investors must track MobiKwik’s ability to diversify revenues away from payment processing fees toward higher-yield products such as digital credit, wealth distribution, and its newly approved stockbroking vertical”. The company recently received regulatory nod to run a stockbroking business, which could boost its wealth management ambitions, but immediate financial relief remains unlikely.On the technical side, while MobiKwik’s share is rebounding off multi-quarter lows, resistance persists near the Rs 300–305 range. Analysts argue that only a decisive breakout above these levels, supported by improved quarterly performance and fundamental traction, could signal a real change in sentiment.
Impact on Investors
For equity investors, MobiKwik’s Q1FY26 results have been a bruising affair. The sharp swing in losses, coupled with a double-digit revenue slide, casts a shadow over the company’s near-term earnings visibility and overall operating model.Shareholding data reveals that promoters own around 25.2% of the company, with institutional investors and the public accounting for 8.5% and 66.4% stakes, respectively. Corporate actions have also contributed to volatility, with South Africa-based Net1 Applied Technologies recently exiting its 8% stake via a block deal, a move seen as a signal of diminished foreign investor confidence.
Market participants who bought into the high-growth digital credit story have been left disappointed by the revenue impact of the ZIP product pause. Furthermore, while GMV and user bases continue to scale, the underlying business is facing pressure from low contribution margins and persistently high operating costs. For retail investors, this raises questions about MobiKwik’s ability to engineer a sustainable turnaround and justifies a more cautious approach.Technically, while there’s been short-term relief as the stock rebounded from 61% below its peak, technical analysts remain wary. Key resistance levels lie between Rs 300 and Rs 310, with experts suggesting a “wait and watch” approach until fundamental and technical metrics align positively.
However, analysts also note that repositioning toward wealth management and stockbroking — as evidenced by the recent regulatory approval — could eventually provide new revenue streams, assuming steady execution. Until then, the heavy near-term losses and continued margin woes could keep a lid on the stock’s re-rating prospects.
