SUMMARY
- PhonePe has reported a notable increase in revenue, achieving a 73% growth to a total of Rs 5,064 crore for FY24 from Rs 2,914 crore in FY23.
- PhonePe Group’s Adjusted Profit After Tax (PAT) also turned positive with a figure of Rs 197 crore.
- The focus on enhancing operational leverage through automation and cost efficiencies has been a key driver of this growth.
PhonePe has reported a notable increase in revenue, achieving a 73% growth to a total of Rs 5,064 crore for FY24 from Rs 2,914 crore in FY23. This achievement is attributed to a combination of cost efficiency measures and the diversification of product offerings.
Furthermore, PhonePe Group’s Adjusted Profit After Tax (PAT) also turned positive with a figure of Rs 197 crore. This represents a significant improvement from the deficit of Rs 738 crore reported in the previous fiscal year.
The fintech major’s financial turnaround is largely due to the strong performance of its Payments division, which saw an Adjusted PAT of Rs 710 crore, marking a reversal from Rs 194 crore loss in FY23.
The strategic focus on enhancing operational leverage through automation and cost efficiencies has been identified as a key driver of this growth.
Since the previous year, PhonePe has intensified its investment in subsidiaries, which has led to expansion across various sectors including insurance, wealth management, and hyperlocal e-commerce. Each business operates in a different subsidiary.
Founder and CEO Sameer Nigam said, “We believe a focus on disciplined financial management will help us continue in the progression towards profitability of our Payments business, which by itself is a unique feat in the Indian context. Optimization of investments and capital allocation, along with building a diversified revenue model and remaining customer-focused, will provide a solid foundation for sustained future success.”
In an interview at the Moneycontrol Startup Conclave on August 9, 2024, in Bengaluru, Nigam discussed the company’s progress towards achieving near-profitability at the consolidated level for FY24. He elaborated that each subsidiary within the PhonePe Group, including e-commerce (Pincode), stock broking (Share Market), merchant and consumer loans, soundboxes, advertisement, etc., alongside the standalone payments business, has its own growth trajectory and specific branding, marketing, and cashback requirements. The lending business, however, is noted for generating cash from inception.
Nigam also highlighted that the merchant business and the payment gateway have been instrumental in contributing to profitability, supported by the deployment of approximately seven million merchant devices.
Nigam added, “There are a lot of value-added services, including point of sale (PoS) machines, sound boxes, advertisements, and merchant loans, where we are able to charge and monetise.”
Adarsh Nahata, the Chief Financial Officer of PhonePe, further emphasized that the company’s financial strategy is built on three foundational pillars: ensuring predictable and sustainable revenue growth, diversifying revenue streams, and continuously improving the bottom line.
