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MobiKwik's Shocking Q2: 694% Loss Surge Amid Platform Fraud Scandal

MobiKwik's financial performance took a severe hit in the second quarter with losses widening dramatically. The company faced a significant fraud incident where merchants exploited technical bugs for unauthorized settlements. Despite the challenges, there was some positive news with sequential improvement in EBITDA performance. The company has taken legal action and recovery measures to address the fraud situation.

Key Points: MobiKwik Q2 Loss Widens 694% After Fraud Charge

  • Net loss surged to Rs 28.6 crore from Rs 3.6 crore year-on-year
  • Revenue declined 7% to Rs 270.2 crore amid operational challenges
  • Company uncovered Rs 40.4 crore fraud exploiting technical platform bug
  • EBITDA loss improved 79% sequentially through cost-cutting measures
2 min read

MobiKwik's Q2 loss widens massive 694 pc, revenue falls 7 pc

MobiKwik reports 694% YoY loss increase to Rs 28.6 crore in Q2 FY26 due to Rs 11.8 crore fraud provision, while revenue declines 7% to Rs 270.2 crore.

"The company booked an exceptional loss of Rs 11.8 crore during the quarter after uncovering a fraud involving some registered merchants and users. - MobiKwik Regulatory Filing"

Mumbai, Nov 4

Fintech company MobiKwik on Tuesday reported a 694 per cent year-on-year (YoY) increase in its consolidated net loss for the second quarter (Q2) of FY26, mainly due to a one-time fraud-related charge.

The company’s net loss surged to Rs 28.6 crore, compared to Rs 3.6 crore in the same quarter last financial year (Q2 FY25), according to its stock exchange filing.

However, the loss narrowed 31.7 per cent sequentially from Rs 41.9 crore in the June quarter (Q1 FY26).

The company booked an exceptional loss of Rs 11.8 crore during the quarter after uncovering a fraud involving some registered merchants and users.

These individuals allegedly exploited a technical bug in MobiKwik’s platform to make unauthorised settlements amounting to Rs 40.4 crore.

MobiKwik said it has already recovered Rs 21.9 crore, while Rs 6.6 crore is secured through court orders and merchant affidavits.

The remaining Rs 11.8 crore has been fully provided for as an exceptional item in this quarter.

The company also filed an FIR in September and appointed a reputed advisory firm to conduct an independent investigation into the incident.

The company clarified that the provision for the fraud impacted profitability but did not affect revenue, as it was recorded below the operating level.

MobiKwik’s revenue from operations fell 7 per cent YoY to Rs 270.2 crore in Q2, compared to Rs 290.6 crore a year ago.

Revenue also dipped slightly from Rs 271.3 crore in the previous quarter, as per its regulatory filing.

At the operating level, the company reported an EBITDA loss of Rs 6.4 crore, compared to an EBITDA profit of Rs 6.8 crore in the same quarter last financial year.

However, this was a 79 per cent improvement over the Rs 31.2 crore EBITDA loss reported in the previous quarter, helped by cost-cutting measures and lower payment processing expenses.

MobiKwik’s total expenditure for the quarter stood at Rs 285.7 crore, almost unchanged from Rs 286.9 crore in the year-ago period.

The company earns revenue mainly from two business verticals -- payments (through merchant and convenience fees) and financial services (through collection fees, late payment charges, and penal fees).

- IANS

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Reader Comments

A
Arjun K
The silver lining is that they've recovered more than half the amount and are taking legal action. Also good to see the sequential improvement in EBITDA loss. Indian fintech companies need to learn from such incidents and strengthen their systems.
R
Rohit P
694% increase in loss is massive! But the fraud provision explains a lot. Revenue falling while expenses remain almost the same is worrying though. Cost cutting can only help so much - they need to grow their user base and transactions.
S
Sarah B
As someone who works in tech, I appreciate their transparency about the fraud and the steps they're taking. Many companies would try to hide such incidents. The independent investigation is a good move for rebuilding trust.
V
Vikram M
With Paytm and PhonePe dominating the market, MobiKwik was already struggling. This fraud incident makes it even tougher for them. Hope they can bounce back - competition is good for consumers like us. 🤞
K
Karthik V
While the fraud is unfortunate, I'm concerned about the 7% revenue decline. That's the real story here. Technical issues can be fixed, but if they're losing customers and transactions, that's a bigger problem for long-term survival.

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