Mobikwik's payment business remains robust, and user as well as merchant additions remain strong. Financial services, under BNPL, will remain under pressure, but the segment is showing signs of recovery.
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One Mobikwik Systems Ltd. reported revenue of Rs 2,714 million, a mild growth of 1.3% QoQ (our estimate:14.5%), due to soft payment services revenue performance (+0.7 QoQ) as gross merchandise value growth (+16% QoQ / 53% YoY basis) was offset by lower take rate (56 bps down 8bps QoQ).
Financial services revenue showed signs of recovery, growing 3.7% QoQ.
Management projects continued strength in its Payments segment, as user base and engagement enhanced, adding 3.8 million users/49,000 merchants during Q1.
While for financial services, the previous quarter likely marked the bottom (exited Zip business), with recovery underway and a potential upside in revenue and profitability.
The payment business continues to perform well, while financial services show early signs of recovery; but following the Q1 miss, we sharply cut our FY26/FY27E EPS estimates by 15%/18% and lower revenue estimates by 9%/7%.
We retain our ‘Buy' with a reduced target price of Rs 400 (implies enterprise value/sales of ~1.6x or EV/Ebitda of ~65 times on FY27E estimate).
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