Mobikwik - Are wallets still a thing?

Stock Opportunities
24

MobiKwik Concall Notes Till Q3 FY26

What I like about management is they and friendly and accept their mistakes. And In Lending Business they are focused on the risk first, growth later. [OPINION]

Focus on chasing profit and growth via frugal innovation. Focus on Tier 2 ,3 and beyond cities. People who are income upto 12 lakh or not paying taxes.

Total User : 186.6 Mil and Merchant: 4.79 Mil

Adding 5 million users / quater. 20 million users/ quater.

And 1 to 1.5 lakh merchant per quater.

Merchant Acquisition Strategy: Selective to good quality and catagoreis in Tier 2,3 and beyond

Customer acquisition cost around 35 rs with up and down of 4-5 rs.

Payment Business

Payment Business Focus: Wallet and UPI Credit Card

Instead of looking at payment take rate look at NPM ( Net Payment Margin) , which will be around 12-15 bps. And EBITDA margin in payment business will be 22-25 %.

NPM = Take Rate - PG Cost - User Incentive

EBITDA = Net Revenue - PG Cost - User Incentive

• Zakpay is very small part of revenue. Admited the mistake of not paying attention

• Merchant Credit Acesss ( MCA ) or Merchant Lon is very small.

In Lending Business

Net TR = Take Rate - DLG Cost - Other Credit Cost

Contribution Margin = 40 %

Net TR - 4 to 5%

• Two types of loan : FLDG and Marketplace. In FLDG they take credit risk ( 3- 5% FLDG ) and collection risk. But in marketplace they don’t take any risk.

• FLDG loans are mostly upto 1 Lakh Rs amount or monthly EMI of 10K. Anything above 1 Lakh Loan are on Marketplace model, because they have more risk and they don’t want to take that risk.

• Small mount 10K, 20K loans can also be on marketplace model, whey they are not satisfied with the user risk profile.

• FLDG Take Rate = Processing Fee + NIM

Upto 7-8 % = Upto 4.5 to 5% + 3.5 %

• Non FLDG = Only Processing Fee ( 2.5 - 3.5 % )

• They can’t put number on Loan growth, because it depends on the lending partner.

• Total loans GMV : 80 % is FLDG and 20 % is non - FLDG

• Lending Focus : adding new partner. Total 10 as of Q3. They also have applied for NBFC license, under process

• Lending Business is linked to the lending cycle. They grow as their partner grow.

• NO Significant monetization from wealth and broking business in near term.

25

MobiKwik Concall Notes Till Q3 FY26

What I like about management is they and friendly and accept their mistakes. And In Lending Business they are focused on the risk first, growth later. [OPINION]

Focus on chasing profit and growth via frugal innovation. Focus on Tier 2 ,3 and beyond cities. People who are income upto 12 lakh or not paying taxes.

Total User : 186.6 Mil and Merchant: 4.79 Mil

Adding 5 million users / quater. 20 million users/ quater.

And 1 to 1.5 lakh merchant per quater.

Merchant Acquisition Strategy: Selective to good quality and catagoreis in Tier 2,3 and beyond

Customer acquisition cost around 35 rs with up and down of 4-5 rs.

Payment Business

Payment Business Focus: Wallet and UPI Credit Card

Instead of looking at payment take rate look at NPM ( Net Payment Margin) , which will be around 12-15 bps. And EBITDA margin in payment business will be 22-25 %.

NPM = Take Rate - PG Cost - User Incentive

EBITDA = Net Revenue - PG Cost - User Incentive

• Zakpay is very small part of revenue. Admited the mistake of not paying attention

• Merchant Credit Acesss ( MCA ) or Merchant Lon is very small.

In Lending Business

Net TR = Take Rate - DLG Cost - Other Credit Cost

Contribution Margin = 40 %

Net TR - 4 to 5%

• Two types of loan : FLDG and Marketplace. In FLDG they take credit risk ( 3- 5% FLDG ) and collection risk. But in marketplace they don’t take any risk.

• FLDG loans are mostly upto 1 Lakh Rs amount or monthly EMI of 10K. Anything above 1 Lakh Loan are on Marketplace model, because they have more risk and they don’t want to take that risk.

• Small mount 10K, 20K loans can also be on marketplace model, whey they are not satisfied with the user risk profile.

• FLDG Take Rate = Processing Fee + NIM

Upto 7-8 % = Upto 4.5 to 5% + 3.5 %

• Non FLDG = Only Processing Fee ( 2.5 - 3.5 % )

• They can’t put number on Loan growth, because it depends on the lending partner.

• Total loans GMV : 80 % is FLDG and 20 % is non - FLDG

• Lending Focus : adding new partner. Total 10 as of Q3. They also have applied for NBFC license, under process

• Lending Business is linked to the lending cycle. They grow as their partner grow.

• NO Significant monetization from wealth and broking business in near term.

1 Like
26

Some thoughts on Valuation

PhonePe IPO : 10 - 12 x Sales

Paytm : 8 - 10 x Sales

MobiKwik: 1 - 2 x Sales

This valuation gap exists compared to its peers may be because of the market share.

Phonepay 45.5 %, GPay : 33 % , Paytm : 8 % and MobiKwik : 0.3 % By UPI Volume. Which tells you about the active user.

In my view you should not Valuation like paytm, phonepe.

Disc: Invested

1 Like
27

After reading about the company, promoters & Business, One thing is clear their bottomline can improve by their lending business or any future business such as broking:

My questions are:

  1. Why would people come and lend from these guys when there are already plethora of other players such as banks, NBFC and Microfiance companies. And how will they manage risk of collections. Isn’t that the most difficult part of the business?
  2. Broking MF and Insurance distribution business is commodity and everyone is already is in this business with cutthroat competetion, How would mobikwik crack this.

Now if they are able to do these 2 things properly, we are talking business. Any thoughts anyone?

Disc: Not invested.

1 Like