Even as revenues increased considerably, the firm remained in the red
While rivals Amazon Pay India and Paytm posted losses of Rs 1,868.5 crore and 2,833.18 crore in FY20, respectively, Google Pay India reported an over sixfold increase in net profits y-o-y to Rs 32.86 crore during the year.
PhonePe’s revenue from operations increased to Rs 371.76 crore in the year to March 31, 2020, from Rs 184.22 crore in FY19. Even as revenues increased considerably, the company remained in the red. Net losses reduced by a mere 7% year-on-year to Rs 1,771.48 crore in FY20, filings sourced from business intelligence platform Tofler showed.
Total expenses stood at Rs 2,202.69 crore in FY20, slightly higher than Rs 2,153.22 crore the firm spent in the previous year.
Earlier this month, Walmart-backed Flipkart undertook a corporate restructuring, spinning off PhonePe as a separate entity. The move, analysts reckon, will give the digital payments firm a bigger play within the financial services space. PhonePe that raised a fresh $700 million in primary equity capital led by Walmart aims to broaden its reach in rural India, across states.
The firm has set a stiff target of doubling the registered users to 500 million by December 2022 from over 250 million today in a market where it competes with deep-pocketed players like Paytm, Amazon Pay, Google Pay and latest entrant WhatApp Pay.
While rivals Amazon Pay India and Paytm posted losses of Rs 1,868.5 crore and 2,833.18 crore in FY20, respectively, Google Pay India reported an over six-fold increase in net profits y-o-y to Rs 32.86 crore during the year.
Analysts at consulting firm RedSeer estimate India’s digital payments industry to grow at a CAGR of 27%, touching Rs 7,092 trillion by FY25 from the current Rs 2,153 trillion. Mobile payments will drive around 3.5% of the total digital payments by FY25 from the current 1%. The user base of the segment is expected to increase by nearly five times to 800 million during the period.