Fintech startup PhonePe swings to adjusted profit in FY24
- PhonePe's revenues rose 74% during FY24, driven by its ability to cross-sell a diverse product portfolio
Bengaluru: Fintech startup PhonePe clocked a profit after tax of ₹197 crores, excluding ESOP costs, in the financial year 2024, compared to a loss of ₹738 crore a year earlier.
The company’s standalone payments business also reported an adjusted PAT of ₹710 crore for FY24 against a loss of ₹194 crore a year earlier, PhonePe said in a statement on Monday.
If ESOPs are included, PhonePe reported a loss. ESOPs or employee stock options, used as a tool to reward or retain employees, can have a substantial cost and tax burden for the company and employees. PhonePe didn't offer details of its ESOPs costs.
PhonePe's revenues rose 74% to ₹5,064 crore during the year, driven by factors including its ability to cross-sell a diverse product portfolio, the statement said.
“Our financial strategy is anchored on three key pillars: (1) predictable and sustainable growth in revenue, (2) diversification of revenue streams, and (3) continuing improvements to the bottom line,” PhonePe’s chief financial officer Adarsh Nahata said. These factors, he said, have helped the company scale rapidly while maintaining a focus on profitability.
Walmart-backed PhonePe said driving operations by automation and other cost efficiencies helped improve revenue and profit during the year. “We believe a focus on disciplined financial management will help us continue in the progression towards profitability of our Payments business,” the company’s founder and chief executive officer Sameer Nigam said in the statement.
Recently, the fintech firm launched a ‘credit line on UPI’ on its platform where users can get access to the provision from banks to pay merchants through credit. This is a new payment option that allows customers at the time of checkout through PhonePe’s Payment Gateway.
Last year, the company announced its entry into the stock broking business through its Share.Market app, which allows users to trade and invest in stocks, mutual funds, and ETFs (exchange-traded funds). It competes with other giants such as Groww and Zerodha in this category.
PhonePe also has a commerce vertical called Pincode which focuses on several categories within and outside the open network for digital commerce or ONDC platform.
Founded by Nigam, Rahul Chari and Burzin Engineer in 2015, PhonePe has established itself as a leading consumer payments app with 550+ million registered users and a digital payments acceptance network of 40+ million merchants. It processes over 270 million daily transactions with an annualised total payment value (TPV) of over $1.5 trillion.
Backed by General Atlantic and Tencent, among others, it shifted its domicile to India from Singapore in 2022. In the same year, PhonePe, which was acquired by Flipkart, separated its ownership from the e-commerce firm, although Walmart continues to remain the parent company for both.
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First Published:26 Aug 2024, 03:16 PM IST
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