Did MobiKwik's Q2 Loss Soar by 694% Due to Fraud Charges?
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Synopsis
MobiKwik faces a challenging financial landscape as it reports a staggering 694% increase in its Q2 losses due to fraud charges. The company is taking measures to recover losses while navigating a dip in operational revenue. Can MobiKwik recover from this setback and regain its footing in the fintech sector?
Key Takeaways
- MobiKwik's net loss surged by 694% YoY in Q2 FY26 due to a fraud-related charge.
- Exceptional loss of Rs 11.8 crore recorded during this quarter.
- Revenue from operations decreased by 7% YoY.
- EBITDA loss improved by 79% from the previous quarter.
- Total expenditure remained nearly unchanged at Rs 285.7 crore.
Mumbai, Nov 4 (NationPress) The fintech firm MobiKwik disclosed on Tuesday that its consolidated net loss for the second quarter (Q2) of FY26 has escalated by a staggering 694% year-on-year (YoY), primarily attributed to a one-time charge related to fraud.
The reported net loss increased to Rs 28.6 crore, a significant rise from Rs 3.6 crore during the same quarter of the previous financial year (Q2 FY25), as indicated in its stock exchange disclosure.
In contrast, the loss moderated by 31.7% sequentially, down from Rs 41.9 crore in the June quarter (Q1 FY26).
The company recorded an extraordinary loss of Rs 11.8 crore after revealing a fraud scheme involving several registered merchants and users.
These parties allegedly took advantage of a technical glitch in MobiKwik’s platform, resulting in unauthorized settlements totaling Rs 40.4 crore.
MobiKwik reported that it has successfully recovered Rs 21.9 crore, while an additional Rs 6.6 crore is secured through court orders and affidavits from merchants.
The remaining Rs 11.8 crore has been entirely accounted for as an exceptional item in this quarter.
The company also lodged a complaint in September and hired a reputable advisory firm to perform an independent probe into the matter.
MobiKwik clarified that the provisions made for the fraud impacted profitability but did not influence revenue, as it was recorded below the operating level.
In Q2, MobiKwik’s operational revenue fell by 7% YoY to Rs 270.2 crore, down from Rs 290.6 crore a year earlier.
Revenue saw a slight decrease from Rs 271.3 crore in the preceding quarter, as per its regulatory filing.
At the operating level, the company reported an EBITDA loss of Rs 6.4 crore, contrasting with an EBITDA profit of Rs 6.8 crore in the same quarter last year.
However, this reflects a remarkable 79% improvement from the Rs 31.2 crore EBITDA loss recorded in the last quarter, aided by cost-cutting strategies and reduced payment processing fees.
MobiKwik’s total costs for the quarter amounted to Rs 285.7 crore, nearly unchanged from Rs 286.9 crore during the same period last year.
The firm primarily generates revenue from two business segments: payments (via merchant and convenience fees) and financial services (from collection fees, late payment charges, and penalties).
Point of View
I believe that MobiKwik's current situation is a stark reminder of the vulnerabilities in the fintech sector. The reported losses due to fraud highlight the necessity for robust security measures and transparency. While the recovery process may be challenging, it is crucial for MobiKwik to act decisively to restore stakeholder confidence and safeguard user interests. The industry must learn from such incidents to enhance trust and stability in the digital economy.
NationPress
04/11/2025
Frequently Asked Questions
What caused MobiKwik's significant loss in Q2?
MobiKwik's substantial net loss in Q2 was primarily due to a one-time charge related to fraud, involving unauthorized settlements by registered merchants and users.
How much did MobiKwik lose in Q2 FY26?
MobiKwik reported a net loss of Rs 28.6 crore in Q2 FY26, which represents a 694% increase compared to the same period last year.
What measures is MobiKwik taking to recover from the fraud?
MobiKwik has recovered a portion of the lost funds and has engaged a reputable advisory firm for an independent investigation into the fraud.
How did the fraud impact MobiKwik's revenue?
The provisions for fraud impacted profitability but did not affect the revenue, which saw a 7% decline to Rs 270.2 crore in Q2 FY26.
What are MobiKwik's main revenue sources?
MobiKwik generates revenue primarily from payments via merchant and convenience fees, and from financial services through collection fees, late payment charges, and penalties.
