Thank you, Hilary. Good evening, everyone.

On behalf of Dolat Capital, I would like to thank One MobiKwik Systems for giving us the opportunity to host this earnings call. I welcome the senior management of One MobiKwik Systems represented by Mr.

Bipin Preet Singh, who is MD and CEO of the company, Ms. Upasana R.

Krishna Taku, who is Executive Director and CFO of the company. I would like the management to take us through the Q3 FY26 results and now request management to take it over from here.

Over to you, ma'am.

Hello? Am I audible?

Yes sir, please go ahead.

Hi and good afternoon, everyone. This is Bipin Preet Singh, I am the Co-Founder and CEO of One MobiKwik Systems.

I welcome you all to the earnings call for Q3 FY26. Let me start with the summary of what we have done this quarter, and then we can get into Q&A as per the questions that are being asked.

Firstly, it's important to rewind and remember that we had given a commitment that we will turn profitable in the second half of FY26, and I'm delighted to report that we have delivered both EBITDA and PAT profitability in Q3 FY26. We have, as two primary business lines.

One is the payments and second is financial services, where primarily it is digital lending. I will cover both of them one by one and then I will talk about consolidated level performance.

On the payments side, GMV, which is basically the total value of payments processed, rose to an all-time high in this quarter for ₹481 billion, which is a consistent and a record high for 12th quarter in a row. Our payments business growth is intact.

It is grown up 63% year-on-year and 11% quarter-on-quarter, this number. Primarily it has grown because we have been investing in the growth of UPI, both UPI as well as Pocket UPI, which is our wallet being used on UPI.

UPI transactions for MobiKwik, which are visible also on the NPCI website in terms of the rankings, have actually grown 3.2 times. Have actually grown 220% to 3.2 times in the last one year.

Despite the UPI share growing from 32% in the same quarter last financial year to 41% this financial year, we have expanded both payments revenue, which is in this quarter is ₹223.7 crores, and payments net margin, which is around 17 basis points, demonstrating that while we're growing UPI, at the same time we do have certain revenue making categories within payments and this growth is translating into revenue generation categories as well. Primarily among them are wallet as well as bill payments.

On the other hand, in the financial services, if you remember, we had a fair bit of tightening in Q3 of FY25. We were down on disbursements also in that quarter, and we had change in the way our arrangements with our lending partners accounted for the revenue, leading to most of the revenue coming back-ended.

I'm happy to inform that we have reached a disbursement of personal loans to a high of 9,000 million, which is ₹900 crores for this quarter, which is a consistent growth over previous quarter as well as, I would say it's a fourth or fifth quarter growth, consistent growth, actually a 126% year-on-year growth. This is a big win for us.

Of course, on the disbursement numbers, but as digital lending business, which we do, which is a mix of both FLDG type of business where we do risk sharing and distribution, pure distribution, is not only about the headline numbers, but is also about the underlying quality of the book. I'm happy to report that there is significant improvement, consistent improvement, on the back of enhanced credit quality and collection efficiency.

That has resulted in a gross profit for financial services at INR 372 million, which is ₹37 crores, which is up 405% year-on-year and 45% quarter-on-quarter. It's not just the growth in disbursement and the growth in revenue, actually it is the margin which has expanded in lending, resulting in better profitability.

Lending related expenses came down 57% year-on-year, and this is our approach that we want to obviously continue growing digital lending, but we will be taking risk-first approach and a core profitable approach over just growth at all costs. Combining both of them at a consolidated level, total income has risen 8% year-on-year to INR 2,972 million, which is nearly ₹297 crores.

Contribution profit has jumped 76% year-on-year, which is a significant jump, mainly because of the improvement in margins both in payments as well as in lending, to INR 1,288 million, which is almost ₹129 crores. Both the margins in payments and lending have improved.

Like we said that, as margins have expanded, our growth has continued and cost has stabilized, we had an EBITDA swing of ₹57.6 crores year-on-year, thereby landing at ₹15 crores of EBITDA, 150 million, which is a 5% margin. After the finance depreciation cost, this EBITDA has converted to PAT of INR 40 million, which is again a swing of ₹59 crores year-on-year.

Both on the EBITDA level and PAT level, we have big swings. While the journey continues to expand and grow the business, our endeavor will be to continue this growth in a sustainable manner.

We are getting closer and closer to a more stable and sustainable operating model, which we hope to continue in the time to come. With this, I would like to thank again everyone who's listening to the call, and I'll hand it over to the operator for any questions.

Am I audible, sir? Hello?

Yes, we can hear you.

Ma'am. Thank you very much, sir, for this opportunity.

Sir, I have a couple of queries. Now, first up on your financial services.

Now, you did mention that there was fair bit of tightening, right? How should one look at the trajectory going forward?

Because earlier, I think before this tightening, we used to do ₹2,500 crores of quarterly kind of a disbursement, right? Currently it's about ₹900 crores.

How should one look at this trajectory? Are we looking or we aspire to go back to what we used to do earlier, and what's the timeline when we can try to achieve that?

We have no such idea that we have to go back to a previous number because earlier number that we were doing was also based off another product, which was buy-now-pay-later product, which if you remember, if you've seen the performance of the company, was a flagship credit product. Since the regulatory position on this product has not been very clear coming from the market, we had wound it down.

If you see after Q4 of FY25, we have no contribution coming from ZIP, which was our BNPL product, which was counted in this disbursement and that was contributing at one point of more than ₹1,500 crores of disbursement in a quarter. Not apple-to-apple comparison.

In terms of the business that we are doing today, it is mainly consumer personal loan and with some bit of secured products also coming in at a very small scale. Mostly it is consumer PL, which we are trying to do and approaching to do it with a very risk-first approach.

Our focus is not that we have to grow this number to a number next quarter or the quarter after that. We are taking a cautious approach because as you know unsecured business, you have to be cautious.

Plus, also I think overall the ecosystem of digital lending has matured. There is not much appetite for any kind of significant risk-taking when it comes to unsecured risk-taking, both in the parts of NBFC, banks as well as fintechs.

What you will see going forward is also, I wouldn't say slow, but consistent growth, but making sure that credit quality is maintained and making sure that costs are under control and making sure that profitability is there.

Understood. I got it.

My second question, I think we have said in the past as well, we are looking at ₹15 to ₹25 crores of improvement in profitability every quarter, which we achieved this quarter. Going ahead also, we have same kind of expectation?

I wish there was a formula that you could improve 15, 20 crores profitability every quarter, it will become infinite. Unfortunately, that's not the case.

Like I said earlier, we can say that we are reaching a more stable operating model. Is there more juice left in the margins?

Yes, there is. There is definitely, because we do have areas where we are investing, but not yet making enough margins, or in some cases not making revenue.

There are areas like UPI where we don't make much in the way of revenue today, but we are hopeful that we will do. There are areas like merchant side payment business where we are looking at both growth and profitability.

There are areas like merchant lending, where again we are very small, but we clearly see opportunity to expand and add both revenue and margins. However, I don't think we should expect more improvement in margins per se.

It will be more about growth and growth of revenue and maintaining and growing the margins slowly.

Okay. I understood.

A revenue growth-led what you're looking at, not margin-led growth.

Yes, I think margin-led growth, there is some juice, but it's hard to say right now how much more is left.

Fair point. That's very clear, sir, and very helpful.

That would be it from my side. All the very best to you.

Thank you.

Thank you.

Hi sir. Thank you for the opportunity and many congratulations on a great set of numbers.

Sir, just a bookkeeping question in the financial business. Can we know the share of FLDG versus non-FLDG?

Hi. This is Upasana Taku, I'll take that question, sir.

The FLDG or DLG-led business is 80% of the current quarter disbursement, and 20% is the distribution-led risk-free business.

Okay. Sir, as you already highlighted in your starting commentary that the growth is primary led to UPI business and despite that also we are seeing revenue growth and margin growth.

Just wanted to understand the payment side of wallet and bill payment which you talked about, what's the strategy for us going forward? How should we look?

Is the growth that we are seeing right now in this business Do we envisage that growth going forward, or any sort of strategy for a longer term? I'm not asking for a quarter or two quarter specific, but from a two-year point of view, what's the approach what we are taking?

Thank you. Got the question.

Let me address that. Look, we all know that UPI is the predominant payment mode in the country today, and it's grown 29% over the last one year.

At the same time, MobiKwik UPI numbers have grown 220%. We are growing faster than the overall UPI ecosystem, although we are very, very small.

We have a lot of headroom of growth in users, transactions and the overall GMV in the UPI. Where we specialize and how we are doing it is by investing more fundamentals like product experience, and coming up with differentiators like wallet and especially wallet over UPI, which is Pocket UPI.

That actually is a big reason why we are seeing growth in UPI numbers. Because we are the largest wallet and as per industry data, we have 18% share by value.

The wallet business is also growing overall for the industry. I think there is more focus by other industry players as well.

I do believe that wallet actually contributes more in terms of revenue, either by MDR because there is some MDR and also in terms of convenience charges. It is also more sticky, cuz bank UPI is easily switchable.

When you use wallet and you do full KYC of the customer, you get a more sticky customer who wants to use your wallet instead of using their bank account for all UPI transactions. That gives us opportunities to cross-sell more services, including bill payments, we can in some cases get convenience fees as well.

Bill payments also you make money from the BBPS ecosystem. The whole idea is to grow the top-line headline number of UPI transactions and benefit from the trickle-down of this growth into revenue-generating categories like bill payments, wallet, and other kind of transactions.

Sir, just wanted to have a follow-up on that side is what we know is Pocket UPI and UPI is not fetching any revenue and you are saying that the cross-sell has been improving on that side. Can you share the numbers on that side on quarter-on-quarter, that cross-selling how much?

Because what I understand is your UPI and Pocket UPI is growing, but in that space So you are doing cross-selling pretty much, but wanted to have your more color on that side how things are happening on that side?

See, like I said, when this UPI numbers are growing as well as Pocket UPI numbers are growing, especially because we have the wallet, we are able to generate higher margins. If you compare it to the industry peers, we have 17 basis points margin on our payments business, which is considerably higher than what the industry is able to achieve.

The reason for that is that it's a sticky customer who's not getting the option of a wallet elsewhere. Therefore, the frequency of transactions, the average ticket size of the transactions, the propensity of the transactions on bill payments, generating convenience fees via different mechanisms in the wallet, even the amount of money that they keep in the wallet, all of this results in higher revenue.

That is what is actually causing the revenue to grow. In fact, the second order effect is that when you see the growth in consumer personal loans, our investment in marketing has actually either been stagnant or declined.

It has not grown significantly. At the same time, our digital lending business has grown quarter-on-quarter simply because of the fact that we have a more sticky customer who's a higher quality customer and that customer is actually taking loans as well.

Overall our approach is that we are not looking to compete directly with the very top players just in terms of headline numbers. Our focus is to differentiate using the specific products that we have and make that work for the cohort of customers who wants to use wallet, wants to take a loan, wants to make bill payments using wallet.

Sir, in our Q2 call we have said that our payment business take rate would be 14, 15 basis points. Now it has inched up to 17 basis points.

Is it sustainable or will be back to 14, 15? The sustainable will be 14, 15 or if you can

Hi. You're right.

We had guided that 13 to 15 is the right number last quarter. Even now if you see the earnings presentation, we have already guided that while we have clocked 17 basis points this quarter, we believe that on a long-term basis, a more sustainable margin in payments is between 12 to 15 basis points for us, given the contribution of UPI is going up and looking at the wallet and the bill payments business.

So 17 bps is not what we are also saying is a long-term sustainable margin. Yes, we do believe that 13, 14, 15, which is what we've been doing for the last four quarters, is a more sustainable net payments margin.

Ma'am, just a last question on my side is that since we are focusing on credit business, do we internally see any other business coming forward as you have alluded to wealth management, mutual fund side. Do we see any take rate on that side, the improvement on that side as well?

Thanks for asking that question. I think we are committed that in the mid to long basis, we will be scaling up our wealth offerings just from a completeness of offering to the user and also from the perspective of stronger engagement and monetization.

In the short to mid-term, we don't expect any significant monetization from our wealth or broking offerings. We are building those products, but in the short to mid-term, we expect that our existing business of consumer payments, our existing business of financial services that are now demonstrating strong margins, will continue their scaling and growth and add to the bottom line.

We also want to highlight that our current focus in terms of growth is on building the merchant payments category. Because if you see our entire last year, we are doing very well on consumer payments growth.

While this is accelerating, we also want to build new moats, and merchant acquiring business is a very good opportunity for us because firstly, this market is substantially large and fast growing. Secondly, we already have the right foundation in terms of our products and our people in this business.

While we are currently very small, we are ramping up our efforts on offline merchant acquiring. In fact, we have improved our footprint from 366 cities to 1,000 1,118 cities because we believe that underpenetrated markets which will offer us good upside from a long-term potential perspective.

We do want to scale up our merchant business there, the device business, EDCs, Soundboxes, and then on the back of deepening merchant engagement, we would want to build a merchant lending business also. Similarly, on the online merchant acquiring side, you would know that our wholly owned subsidiary Zaakpay has a online payment aggregator license from RBI, which we also got in this financial year only.

Here also, we are trying to increase our e-commerce merchant base and GMV from those merchants. In the short term, we expect that existing business and merchant business, which I just described, are the growth opportunities in terms of scaling up our overall business.

Ma'am, sorry, just a follow-up on that side. In the merchant payment category, the larger players has been already gained the market share.

What are we offered differently because the base has been quite large for the larger players and we are very small on that side. Just have your view key what are we doing differently on that side to acquire more customers in the merchant category side?

Sir, you're right. We are still very small, but this market is extremely large from a total addressable market perspective.

Despite the fact that there are two, three large players, the market is not fully penetrated, and also as per various industry reports, the market itself is going to double in the next five years. Given our strong base in the payments sector for the last 16 years, we do believe that we have an opportunity to capture a piece of this market.

We have been doing the payment gateway business in terms of online before also, and it is only post-COVID that we had scaled down that business, so that's a no-brainer for us. We already have strong partnerships with more than 1.5 lakh e-commerce merchants with whom we have a partnership for them to accept MobiKwik Wallet and MobiKwik UPI on their app checkouts.

Doing a cross-sell of transaction processing for credit card, debit card, etc., is not very difficult for us. Of course, we have to give them value-added products and services, which will make it sticky for them.

On the offline merchant side, I think you missed the point which I said that our focus is not so much in the large cities, but we are focusing on more Tier 2, Tier 3 markets where we see that there is a lot of room for growth. Those merchants are not already having one or two Soundboxes or EDC machine, there is a lot of room for growth there.

While there are players who have scaled, they've not reached all of India. Further, the market itself is expected to double in the next few years with seamless transaction processing and seamless transaction settlement to these merchants, and the additional advantage of doing value-added products or services for them, whether it is in terms of merchant loans or whether it is in terms of giving them advertising or other revenue streams, we have a lot of opportunity to create our own space in this sector.

Thank you so much, ma'am, for answering and all the very best. Thank you.

Thank you.

Hi. Congrats on a good set.

In continuation of the previous discussion on the multiple businesses we are incubating, can you let me know that ex of payment and lending business, what would be the incubation cost that is hitting our P&L? How are we budgeting this for the next year?

Hello?

Hi. Sorry.

Just to repeat, your question is that how much are we burning on incubating new businesses?

That's right. Ex of payments and lending business, what would be the cost that is hitting our fixed cost element in the P&L?

Yeah. The merchant business that I just described, which we are trying to build, merchant offline devices and also online merchant, I think put together would be around ₹13 to ₹15 crores of burn every quarter.

Okay. How are we budgeting this for the next year?

Next year are we expecting a break-even on these particular businesses?

Multiple sub-segments within this businesses are also already approaching break-even. We have been investing in these businesses, building up the tech stack, the product, sales muscle over the last couple of years, trying to perfect it.

I think we are getting close to a place where both of these businesses will break even eventually. It may take a couple of quarters, two or three quarters, but our hope is that they will break even.

Then basis that, that benefit will start coming up both in our bottom line as well as in our top line.

Fair enough. Fair enough.

Also on the payments business, we've optimized a lot on the payment gateway cost. If you can help me understand what percentage of our own internal transactions are we processing internally via Zaakpay, and is there any further room of reduction from the gateway cost of say 27 bps?

We at MobiKwik use multiple payment gateways, which include Zaakpay. Currently, over the last many quarters, the share of Zaakpay for MobiKwik has been anywhere between 30% all the way up to 50% depending on the commercials that are available.

There are obviously good payment gateways available outside of Zaakpay as well, which we also use at scale, and we use that to make sure we get the best benefit of performance and commercials for the MobiKwik business.

Is there any further room of

It's okay. I think there is not much more room available.

I think we are operating there especially from card transactions point of view. However, like I said, for the UPI transactions, we're still not making money.

We do expect that for UPI transactions also, we will start getting the benefit over the next few quarters, but that will necessarily not come via the online payment gateway.

Hello team, thanks for the opportunity. I had two sets of questions.

One is on the recent that you were talking about offline penetration that you're doing on the merchant side in terms of devices. Do you shed some light on how many devices we have deployed so far, active devices, or the geographies we are targeting?

As you said, you are mostly expanding into lower tier cities considering there is uncertainty regarding the PIDF incentives. Do you think this move is right?

The second one is basically a clarification on the BBPS transaction value that we have. Does that also include the rent payments considering RBI has banned the rent through credit card?

Thank you.

Right. We'll take your first question first.

We've already informed as a first step that we have scaled up from about 300 cities to 1,100 cities. You said that PIDF is not coming, does that make sense?

I would like to firstly clarify that PIDF as well as consumer side UPI incentives put together are only 0.4% of our revenue this quarter and also for other quarters. These incentives are very small compared to our overall revenue, and are therefore not material to us.

Our offline merchant growth strategy is also not linked to these incentives. Rather, we are building the business for core business fundamentals only.

That's the first piece. We would not like to give any more numbers in terms of scale of devices or geographies where we are strong.

It's a little too

early

to give that information. The second question that you had on rent pay, yes, rent pay as a category has been shut down across all the players in the market.

Yes, it has been shut down on our platform as well. Yes, the revenue coming from rent pay would have been there in the bill payments category in the previous quarters, but in this quarter, it is negligible, if not zero.

All right. Thank you.

Hi. Am I audible?

Firstly, congratulations on a good set of numbers. My question would be that lending related cost is gone down to 3% of the digital credit GMV in this quarter.

What would be a sustainable range for FY25? This quarter, we have clocked 57% gross margin in the financial services vertical.

If you can provide a guidance for FY25 in terms of gross margins and lending related cost?

Thank you for that question. We can't provide a specific guidance, but like I said in my summary, where we are today in terms of margins in the digital lending and financial services is kind of in a stable zone.

We assuming that we can continue to maintain the credit quality and collection efficiency, which we do believe we can, basis the kind of decisions and investments we have made both at a risk policy level as well as setting up the collection infrastructure. We have seen the cohorts of static pool risk performance continue to improve and maintain over the past many quarters.

Therefore, we do believe that we can continue to maintain this margin. Whether it will improve significantly from what we have just reported, that remains to be seen.

I cannot comment on that, but it will definitely be in the same zone.

Got it. Fair enough.

Out of the 21% sequential growth in the UPI GMV, how much growth was driven by Pocket UPI?

Currently, we are not disclosing the split between UPI and Pocket UPI given that, look, we are still a small player in this. We will do that in coming time.

What we do believe is that people who choose UPI, bank UPI on MobiKwik app, part of the reason why they choose that is also because Pocket UPI is available to them. When they want to do a small transaction, they end up using a Pocket UPI.

If it's a large transaction, they end up using bank UPI. That combination works for people who understand that, and therefore we are seeing the kind of growth that we are seeing.

Got it. Just qualitatively, was it more than half of the growth was driven by Pocket UPI, anything?

No, it's not the case. We have consistent growth in bank UPI as well as Pocket UPI.

In fact, in bank UPI, our investment in the product and tech stack, which we have built, is giving us very good results.

Got it. Got it.

Thank you so much and all the best.

Hi. Thank you for taking my question.

Firstly, just a clarification. The Pocket UPI and UPI credit card still not being monetized, right?

The total money that we're making on the payments side is largely the wallets and the bill payments?

True.

Okay. The second thing I want to understand is on your presentation, you've stated that the Zaakpay GMV has grown about 236% YoY, whereas if I look at a KPI book, that number is around ₹1,000 crores for the quarter and the same number was ₹943 crores Q3 FY25.

I'm not able to understand why is that

236%. Thanks for that question.

On the same slide that you are looking at, which is the Building New Moats slide, there's a star mark with the GMV. The GMV here excludes MobiKwik related GMV and also it excludes loan repayment related GMV, which we think of both of these as pass-through transactions, and so we are looking at growing the net new business in GMV.

For example, what are my

I understand that, but I think the KPI book number is net of these pass-through only. ₹1,000 crores Zaakpay payment

No, No, the loan repayment pass-through is still there in the KPI, but for business growth purposes we are netting that off. This number excludes both MobiKwik as well as loan repayment related.

Okay. The KPI book number is including loan, is what you're saying?

Yes, that's right.

Okay. Would it be possible for you to start sharing that net of that, the core Zaakpay outside business GMV?

We will. We will eventually start sharing it, but you should know that right now, the net contribution of Zaakpay or the devices offline business is still very small, it's not even a decent number.

That's why we're not giving it. Point taken.

Got it. Thank you.

That would be it.

Hi. Hope my line is audible.

Yeah. Thanks for the opportunity and congrats on strong performance.

Firstly, in our shareholder letter, you have expressed your focus on merchant acquisition, both online and offline. In that light, can you share what are your top priorities here in terms of spends, CapEx, or the merchant count addition, and how do you think it feeds into our merchant advances business on the credit side?

Rahul, thank you for that question. We are trying to build the business in a slightly more sharper fashion how it has been built by the very big players in the offline merchant space, where their focus is primarily to acquire as many merchants as possible, then identify those merchants where they can monetize either through Soundbox or through merchant loans or devices, etc.

Because we are not in a position to invest that much capital into the expansion of the merchant business, we have to take a more profitable and sustainable approach. The way we are going about it is more scientifically, identifying those merchants, those categories of use cases where we have a much higher propensity for the merchant to be monetized, primarily through merchant loans, but also through devices.

With that, we can achieve break-even at a much smaller scale compared to what the incumbents have achieved over the past many years. We have taken the same approach as on the consumer side, where we said that we don't need to be the largest UPI app in order for us to have enough customer stickiness as well as enough monetization to be a profitable business, and we have demonstrated that.

We are taking on the same learnings to be very cautious and very sharp about how we build the business on the merchant side. Our strength is primarily on the technology side.

Our strength is on the intelligence and data analytics. We are taking a very clear, but sustainable approach towards this business.

One

more question from my side on the lending business. How we see this lending operational cost to trend out on a more sustainable basis, or what kind of margins we are looking in the lending business?

I think Upasana already answered this. We are in a fairly stable zone when it comes to the lending margins, the financial services margin that we are seeing.

We are operating with a stable credit quality, stable credit cost, a stable take rate. We are not charging too high to the customer.

We don't have very high margins as well. We are not operating with high credit cost.

It is a very careful balance that we are maintaining, and hopefully that will continue to give us a similar kind of margins in the coming quarter. Will this improve significantly from where it is, it's very hard to say.

I don't think there is that much juice left. I think the growth in the financial services business now will come from the growth of the top-line numbers, growth of revenue, with margins being in the similar zone.

Because the margins are so good in the financial services, that will obviously impact the profitability and bottom line of the business. In terms of the loans that we have already disbursed, we do believe that pre-approved as well as repeat loans will be helpful in further reduction of credit cost, beyond what we have seen already.

Thank you. That's it from my side and best wishes for the time ahead.

[speaks in background]

I want to ask what the realization in bond?

I'm sorry, can you repeat the question? Hamare bond kitne revenue generate kar rahe hain aur usme

realization kitna kitna hai? Bond ka jo naya product launch hua hai, uske bare mein puchh rahe hain.

Okay. The bond product that we have put on our website, abhi it's an experiment.

It's too early to say ki uska kitna revenue realization hai, but we expect ki 0.5% to 1% ke beech mein usme revenue realization hoga.

Thank you. Thank you very much.

Thank you for the opportunity. On the lending side, the blended take rate still continues to decline.

Where should we assume the steady state would be given your mix is 80-20 in terms of FLDG and non-FLDG?

Currently it is 80% FLDG and 20% distribution. We think this will continue or continue to move more towards distribution, but FLDG is where our sweet spot is.

We do make a good amount of money there, but also certain kind of loans like higher ticket loans, we don't want to do in FLDG, we end up working with certain lenders like L&T or Poonawalla and some of these guys to do higher ticket loans for higher tenures. We do it in distribution models.

There again take rates are 2.5%, 3%, 3.5%. Those are the take rates that we have.

It's same as the margin that we are making overall in our lending business because there are no costs, direct costs there for collections or any responsibility for credit quality. In terms of total take rate, we think that it's stable, like the 7% number is in the ballpark.

It may also reduce a little bit, but if it reduces, it means we are giving loans at a let's say lower price. Our partners are giving loans at a lower price, but that also will mean that the credit cost will be lower, and therefore the margin will be similar.

The margin will not get impacted even if the revenue gets impacted slightly.

Okay. Okay.

You indicated the normalized margin contribution margin in lending business would be in 3% to 4% range. This quarter you've done 4.13.

Is there any one-off anything on the collection side? You had one-off which will probably not continue and then you get into the 3% to 4% zone?

See, these are broad numbers, 3% to 4%, it can be 3.5%, it can be 3.25, it can be 4, and some of that can be a function of slightly different commercial model we may have with different lenders that we have in place. It's mostly a function of that rather than any change in the underlying credit quality or underlying any assumptions.

Just to clarify, there is no one-off in the current quarter.

Okay. Okay.

My second and last question is, have you started doing merchant loans also, or you're waiting for a certain minimum scale of whitelisted figures to start operating?

We are operating merchant loans, but it's at a very small scale.

Okay. Are you testing the ground?

We have been testing the ground for past many quarters, collecting data, perfecting the model. We do hope to scale it up in the coming quarters.

Is there a minimum period of data that you look at in terms of look-back data before you put it in the whitelist and start offering it?

Hard to say that, but you are right. There has to be minimum a few months of merchant being active before he or she can be given a loan.

However, this is with the assumption that the credit quality or the credit score of that merchant is same, but for better quality merchants, these periods can be either reduced or can be increased also.

Okay. My last question is, when do you see an inflection point in the merchant loan side in terms of the loan amounts and the number of merchants who can be borrowers?

Hard to say. It will start having some numbers in the next financial year for sure, but it's not possible to give any particular prediction right now.

Currently, it's too small, you should treat it as experimental right now.

Okay. Great.

Thank you and all the best.

Thank you.

Yes, am I audible?

Evening ma'am. Happy on good results for MobiKwik.

Taking cue from the last question, just one question from my side. How do you decide to do FLDG, and how do you decide which one to pass to the distribution model in your lending business?

We have a sweet spot of ticket size and tenure. Typically, if it is a customer who wants a loan of up to a lakh rupees, give and take ₹10,000, ₹20,000 up and down, if that is the requirement of the customer, and if it fits in the credit profile, and if the customer can pay back with an EMI of roughly ₹10,000, then it falls in the FLDG category for us because that's the business that we have done, we've seen the risk cohorts, and we've improved the risk cohorts and we are confident about collections.

If it is too small, let's say 10, 20, 30,000, or if it is much higher than 1 lakh, let's say if it goes above 2 lakh, 3 lakh rupees, in both cases, for the reasons that we are not comfortable with the risk profile of that customer or the tenure of the loan, we don't take any credit risk and we end up passing the leads to our partners who are better equipped to assess the customer. We are happy to make just a pure distribution margin on such products.

All right. Thank you, sir.

Congrats on good results. Thank you.

Thank you.

Thank you.

It's been a great pleasure updating all of you on our results this quarter. I do believe that with a lot of heads-down work, the company has delivered on its commitment and has come back into the black after a few quarters of struggle.

We hope to continue growing from here in a very thoughtful and responsible manner across payments and financial services. Thank you so much, and we'll see you again next quarter.