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Stock Falls as Sequential Growth Slows
MobiKwik's shares fell more than 3% to Rs 219.70 on Tuesday, May 12, 2026, after the fintech company released its fourth-quarter fiscal year 2026 (Q4FY26) results. Investors reacted to the company reporting a net profit of ₹4.11 crore, a slight drop from ₹4.25 crore in the December 2025 quarter. Revenue also edged down to ₹282.15 crore from ₹286.26 crore in the previous period. This quarter-over-quarter slowdown overshadowed the significant yearly gains.
Yearly Profit Rebounds, Investment Planned
The results showed a significant turnaround from the previous year, with MobiKwik posting a ₹4.11 crore profit in the March 2026 quarter compared to a ₹55.71 crore loss a year earlier. Operating performance improved year-over-year, with EBITDA turning positive at ₹19.52 crore against a loss of ₹43.71 crore in Q4FY25. EBITDA margins also improved to 6.7% from a negative figure last year, and slightly up from 6.2% in Q3FY26. The company also announced a strategic investment of ₹55 crore to build its merchant payments business, which management expects to grow tenfold by FY28.
Market View, Sector Pressures
MobiKwik has a market capitalization of approximately $1.5 billion. However, standard valuation measures like the price-to-earnings (P/E) ratio are not yet available, which is common for companies moving towards consistent profits. Rivals like Paytm and other Indian fintechs often trade at higher P/E multiples, indicating greater growth expectations. This suggests investors are valuing MobiKwik differently, considering its current growth pace and spending on new projects. The company's results come as the wider fintech sector faces pressures. Analyst coverage is limited, with some initiating 'Hold' ratings and price targets around ₹230-₹240, reflecting a cautious market view that balances MobiKwik's recovery potential against challenges in executing its plans.
Risks in Merchant Payments Expansion
The ₹55 crore planned for the merchant payments business is a key risk. While management aims for tenfold growth by FY28, this goal requires heavy spending and intense competition in India's fast-changing digital payments market. PhonePe and Google Pay are leading the UPI transaction space. For MobiKwik to gain a strong position in merchant payments, it needs to capture significant market share and offer distinct technology. Unlike some financial service companies with established models, MobiKwik's strategy must show a clear return on its large investment without hurting current profits. The fintech sector also faces evolving regulations, which could bring unexpected costs or operational hurdles, potentially slowing growth and affecting profit targets. The market's reaction to the results suggests investors are closely watching how effectively MobiKwik can make this expansion profitable long-term.
Management's Future View
Management is optimistic about the merchant payments division's long-term potential, expecting it to drive revenue and market presence by FY28 by diversifying income and tapping into India's growing digital commerce. However, investors will closely watch MobiKwik's near-term performance to see if it can build on its yearly improvement to achieve steady sequential profit and revenue growth while managing competition and its new investments.