Prosus reported a 13% rise in Indian revenue to $781 million for FY26, led by PayU’s first full-year adjusted EBITDA profit of $18 million. While the fintech arm improved margins through higher-value services, the group’s overall profitability was tempered by heavy investments in Swiggy's quick commerce expansion.
What Happened
Prosus, the global technology investor, released its fiscal 2026 performance report for its Indian ecosystem, showing a revenue increase of 13% to $781 million. The standout performer was its fintech subsidiary, PayU India, which recorded its first full year of adjusted EBITDA profit. The fintech arm posted $18 million in adjusted EBITDA for the year, a significant turnaround from the $25 million loss reported in the previous fiscal year.
The PayU Profitability Pivot
PayU’s journey to profitability was driven by a fundamental shift in its business strategy. The company deliberately moved away from low-margin merchant portfolios, focusing instead on higher-value software and financial services. This strategy allowed the payments vertical to grow while keeping operational costs disciplined.
By prioritizing value-added services (VAS)—such as fraud risk, authentication, and security software—the company successfully diversified its revenue streams. These high-margin services now form a substantial part of PayU’s payment business. Additionally, the company’s credit division, which uses an embedded lending model, also turned profitable during the year, contributing $6 million to the adjusted EBITDA total. PayU processed a total payment volume (TPV) of $90 billion throughout the year, reflecting a 15% increase compared to the previous period.
The Swiggy Quick Commerce Trade-Off
While PayU showcased improved financial health, the broader Indian ecosystem—which includes investments in companies like Swiggy, Meesho, Rapido, and ixigo—faced mixed pressure. Swiggy’s food delivery business showed robust growth, with a doubling of adjusted EBITDA and a 19% rise in gross order value (GOV).
However, the company’s aggressive push into quick commerce, through its Instamart service, required significant capital. Instamart saw a 105% year-on-year increase in GOV, supported by a network of 1,136 dark stores. While this rapid scaling helped capture market share, the heavy upfront spending on expansion acted as a drag on Prosus’s overall profitability. Although Instamart improved its contribution margin slightly to negative 2.5% from negative 4.6% as promotional intensity eased, the segment remains in an investment phase that weighs on the group's bottom line.
Business Context and Strategy
Prosus continues to integrate its Indian portfolio companies more deeply. PayU is increasingly powering the payment and credit infrastructure for its group investments, including Swiggy, Meesho, and ixigo. This cross-platform synergy is designed to lower customer acquisition costs and drive higher transaction volumes across the ecosystem.
For investors, the contrast between PayU's maturing profitability and the ongoing capital requirements of quick commerce highlights a common trend in the Indian consumer internet sector. Companies are moving from an era of growth-at-all-costs to a model where specific segments must prove they can generate cash, while others are still being funded for massive scale.
What Investors Should Track
Moving forward, the primary focus will be on the sustainability of PayU’s margins. Investors may watch whether the shift toward higher-margin software services can withstand competition from other major fintech players in the market. Additionally, for the broader portfolio, the key monitorable will be the path to profitability for the quick commerce segment. The company's ability to balance market share growth with unit economics will be the ultimate test of its ecosystem strategy.