Digging Deeper: One MobiKwik’s Financial Landscape in Key Numbers
Introduction
In the shifting landscape of finance, One MobiKwik Systems has been grabbing the headlines for all the right reasons as far as financial exercises are concerned. The prospective company is poised to generate ₹700 crore through fresh share issuances, alongside a pre-IPO placement initiative aimed at a consolidation of ₹140 crore. This article attempts to scrutinise One MobiKwik’s financial aspects by highlighting fundamental numbers that pivoted its progress.
Revenue and Growth Trajectory
The revenue of One MobiKwik Systems has displayed a remarkable trajectory, standing at ₹381.09 crore in the first half of the financial year 2024. This figure marks substantial growth from the full-year revenue of ₹539.47 crore in FY23, showcasing an impressive compound annual growth rate (CAGR) of 36.73% from FY21's ₹ 228.57 crore.
EBITDA and Profit Dynamics
Despite the upward trend in revenue, earnings before interest, taxes, depreciation, and amortisation (EBITDA) tell a nuanced story. The EBITDA exhibited a negative CAGR of 25.9% from FY21 to FY23, resulting in a significant negative EBITDA of ₹55.92 crore in FY23. However, a positive shift was evident in the first six months of FY24, with the company generating a positive EBITDA of ₹20.54 crore. This implies a strategic shift in operational efficiency.
The business also suffered a significant loss of ₹83.81 crore in FY23, which came after a greater loss in FY21 of ₹111.3 crore. Reports for the first half of FY24 show a profit of ₹9.48 crore, suggesting that things are starting to turn around. This change implies that One MobiKwik is moving towards sustainable profitability as well as towards a recovery.
Margin Improvement
The EBITDA margin and the net profit margin for the first half of FY24 give an understanding of how healthy the company is financially. The EBITDA margin and net profit margin stood at 5.39% and 2.49%, respectively. Such positive margins in the first half of FY24 are in complete contrast to the negative margins observed in all prior financial years, which is a remarkable transformation. The consistent gains over the last three years. One MobiKwik has enabled the company to make intelligent financial decisions.
Financial Performance - Profit & Loss
| PARTICULARS | MAR 2019 | MAR 2020 | MAR 2021 | MAR 2022 | MAR 2023 |
|---|---|---|---|---|---|
Net Sales | 110.54 | 305.63 | 270.95 | 486.61 | 525.56 |
Total Expenditure | 248.32 | 416.37 | 332.51 | 530 | 494.74 |
Operating Profit | -137.78 | -110.74 | -61.56 | -43.39 | 30.82 |
Other Income | 19.95 | 21.76 | 20.72 | 24.87 | 21.29 |
Interest | 7.42 | 10.48 | 65.51 | 101.26 | 130.44 |
Depreciation | 0.64 | 2.66 | 1.31 | 2.08 | 4.27 |
Exceptional Items | 0 | 0 | 0 | -6.11 | 0 |
Profit Before Tax | -125.89 | -102.12 | -107.67 | -127.97 | -82.60 |
Net Profit | -125.89 | -102.12 | -107.67 | -127.97 | -82.60 |
Adjusted EPS (₹) | -6.26 | -5.08 | -5.36 | -2.24 | -1.44 |
Profit & Loss (FY 2019 to FY 2023)
Source: MobiKwik
One MobiKwik, has over the years become profitable and started yielding positive profits. Interestingly, the net sales of the company grew significantly from ₹110.54 crore in March 2019 to ₹525.56 crore in March 2023. The outstanding improvement in other income as well as the decrease in interest charges led to a positive change in profit before tax, resulting in a directional change towards profitability.
On the other hand, the operating profit was negative until March 20222 and the adjusted EPS did not turn positive until March 2023, signalling a lack of good fortune for investors in that period. This further highlights the need for a closer investigation of the company’s strategy aimed at converting its growing revenues into sustainable profits.
Balance Sheet Analysis
| PARTICULARS | MAR 2019 | MAR 2020 | MAR 2021 | MAR 2022 | MAR 2023 |
|---|---|---|---|---|---|
Share Capital | 13.73 | 14.33 | 15.43 | 11.44 | 11.44 |
Total Reserves | 19.94 | -28.70 | -15.33 | 225.32 | 152.55 |
Borrowings | 13 | 1.26 | 0 | 0 | 22.50 |
Other N/C Liabilities | 2.32 | 4.94 | 2.34 | 8.01 | 13.61 |
Current Liabilities | 271.45 | 340.44 | 413.70 | 574.55 | 539.49 |
Total Liabilities | 320.45 | 332.28 | 416.14 | 819.31 | 739.59 |
Net Block | 1.17 | 5.14 | 0.92 | 9.27 | 14.52 |
Investments | 11.48 | 5.01 | 41.72 | 53.49 | 63.07 |
Loans & Advances | 6.72 | 10.48 | 52.46 | 152.99 | 143.12 |
Current Assets | 300.94 | 311.51 | 314.86 | 603.17 | 518.77 |
Total Assets | 320.45 | 332.28 | 416.14 | 819.31 | 739.59 |
Balance Sheet (FY 2019 to FY 2023)
Source: MobiKwik
Examining the balance sheet reveals One MobiKwik's debt and financial setup. Total reserves showed a notable movement from negative ₹28.70 crore in March 2020 to positive ₹152.55 crore in March 2023. At the same time, share capital also remained reasonably consistent. Borrowings raised the company's debt profile, suggesting potential leverage for strategic objectives.
As a result of investments in infrastructure and financial instruments, net block and non-current asset investments increased. Perhaps, as a result of expanding operations, there was an increase in current and non-current obligations on the liabilities side. As seen from the balance sheet snapshot, the business is carefully managing its financial obligations and strategically positioning itself for future growth.
Cash flow insights
| PARTICULARS | MAR 2019 | MAR 2020 | MAR 2021 | MAR 2022 | MAR 2023 |
|---|---|---|---|---|---|
Profit from Operations | -125.89 | -102.12 | -107.67 | -127.97 | -82.60 |
Adjustment | -2.45 | 78.93 | 62.55 | 139.93 | 138.49 |
Changes in A&L | 27.10 | 5.57 | 7.44 | -327.30 | -44.96 |
Tax Paid | 0 | -3.96 | 0.22 | -5.74 | 6.53 |
Operating Cash Flow | -101.24 | -21.59 | -37.45 | -321.09 | 17.46 |
Investing Cash Flow | 11.70 | 19.92 | 7.71 | -83.05 | -26.19 |
Financing Cash Flow | 74.29 | -22.97 | 72.56 | 329.84 | 36.38 |
Net Cash Flow | -15.25 | -24.63 | 42.82 | -74.30 | 27.64 |
Cash Flow (FY 2019 to FY 2023)
Source: MobiKwik
Analysing the Cash Flow statement provides insight into One MobiKwik's operating liquidity. The negative operating cash flow amount allowed the company to absorb losses until March 2023. In addition to these trends, changes in assets and liabilities had a direct influence on the cash flow. However, financing activities, particularly in March 2022 and 2023, were largely critical for initiatives to ensure positive net cash flow.
The insights into cash flow show that for an understanding of One MobiKwik’s financial situation, it is not just important to assess profitability but also how it can be funded by short-term financing.
Conclusion
To conclude, the financial journey of One MobiKwik Systems is marked by resilience, adaptability, and a strategic turnaround. In spite of incurring losses during previous fiscal periods, the company has recovered, having registered a positive net profit during the first half of FY24. Hence, a strong financial strategy is seen in the positive turn in EBITDA as well as improved margins.
As the company embarks on raising funds and positioning itself for an IPO, the numbers suggest a promising trajectory. The growth in revenue, coupled with prudent financial management, positions One MobiKwik as a contender in the ever-evolving fintech landscape. Investors and stakeholders should keep a close eye on the company's future financial moves as it continues to navigate the complexities of the financial market.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their own research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.
Investments in securities market are subject to market risks, read all the related documents carefully before investing. Brokerage will not exceed SEBI prescribed limit. The securities are quoted as an example and not as a recommendation. SEBI Registration No-INZ000200137 Member Id NSE-08081; BSE-673; MSE-1024, MCX-56285, NCDEX-1262.
