Mobile payments firm PhonePe will likely achieve near profitability at the consolidated level in FY24, the company CEO Sameer Nigam said at the Moneycontrol Startup Conclave on August 9 in Bengaluru.
PhonePe’s various businesses like Pincode, Indus, lending, and insurance are now structured as subsidiaries and the group will see near profitability at the group level for the last financial year, Nigam said.
“Our results are audited and approved by the board and will be released soon. At a consolidated level, we are close to profitability. We are not far,” Nigam said adding that all the various business verticals are different companies now and have separate CEOs. “We call ourselves PhonePe group of companies,” he added.
According to the company, each of the companies presents its financials to the board.
The private firms publish their annual financial results with the Registrar of Companies during the last quarter of the next fiscal.
Nigam said that each business has its own gestation period and needs branding, marketing, cashbacks at the beginning of growth, except for the lending business, which generates cash from the beginning.
He added that merchant business and payment gateway are also generating profitability. PhonePe has deployed around seven million merchant devices.
“There are a lot of value add services, including point of sale (PoS) machines, sound boxes, advertisements merchant loans, where we are able to charge and monetise,” he said
The lack of monetisation opportunities in UPI and the lack of merchant discount rate (MDR) has hurt some of the payment companies’ quest for profitability. But the government subsidies have helped many of them.
“NPCI has managed to convince the government to increase the UPI subsidy substantially last year to around Rs 4,000 crore, which has lifted a lot of the payment companies close to profitability,” Nigam said.
However, Nigam added that the company will go for a public listing only if the company can do that sustainably over some time.
Watch the full edition of the Moneycontrol Startup Conclave 2024 here.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
