PhonePe Group, backed by Walmart, has announced impressive financial results for the fiscal year 2023-24. The company reported a consolidated net profit of ₹197 crore, excluding employee stock option plan (ESOP) costs. This is a remarkable turnaround from the previous fiscal year, where PhonePe incurred a significant loss of ₹738 crore.
Revenue Growth Soars
PhonePe’s revenue for FY24 surged to ₹5,064 crore, marking a substantial 73.7% increase compared to ₹2,914 crore in FY23. This impressive growth highlights the company’s strong performance and successful strategies over the past year.
Standalone Profit in Payments Business
In its payment business, PhonePe achieved a standalone net profit of ₹710 crore, excluding ESOP costs. This is a significant improvement from the ₹194 crore loss recorded in the previous fiscal year. The payment business has evidently become a major contributor to PhonePe’s overall profitability.
Expanding Horizons
Beyond its core payment services, PhonePe has expanded into various new sectors. The company is now involved in financial services, including insurance, lending, and wealth management. It has also ventured into new consumer tech areas, such as hyperlocal e-commerce through Pincode and the Indus App Store. Although the company hasn’t disclosed specific results for these new ventures, they represent significant growth opportunities.
Recently, PhonePe introduced a credit line feature on UPI, which allows customers to access short-term credit seamlessly. This addition aims to enhance user experience and provide more financial flexibility.
Strategic Growth and Financial Management
PhonePe’s growth can be attributed to its leadership in the market, reliable platform, and a diverse product portfolio. The company’s strategy focuses on leveraging automation and cost efficiency to improve profitability.
Adarsh Nahata, PhonePe’s CFO, outlined three key pillars guiding their financial strategy:
- Predictable and Sustainable Revenue Growth
- Diversification of Revenue Streams
- Continuous Improvement to the Bottom Line
These pillars have driven PhonePe’s strategic decisions and enabled rapid scaling. The company’s disciplined financial management is expected to continue driving profitability in its payments business.
Sameer Nigam, Founder and CEO, emphasized the importance of optimizing investments, capital allocation, and maintaining a customer-focused approach. He believes that these efforts will lay a strong foundation for sustained success in the future.
User Base and Transaction Volume
PhonePe boasts a user base of over 550 million registered users and is accepted by more than 40 million merchants. The company processes over 270 million transactions daily, with an annualized total payment value (TPV) of approximately $1.5 trillion.
Overall, PhonePe’s robust financial performance and strategic expansion illustrate its strong market position and potential for future growth.
