PhonePe – Successfully Scaled Payments; Diversification, Profitability Gaining Focus: ICICI Securities

ICICI Securities Report

PhonePe is one of the market leaders in Indian fintech space, having successfully built the required scale to thrive in India’s payments ecosystem. The standalone payments business recorded adjusted PAT of Rs 7.1 billion in FY24 versus a loss of Rs 1.9 billion in FY23.

Going ahead, PhonePe is significantly focusing on going deeper into the newly launched business verticals (crossborder payments, insurance, lending, broking, wealth) and improving margins by investing in building its own data centres for cost efficiency and focus on automation.

Key trends underlining PhonePe’s business salience include:

1. Growth in users and transaction value (FY19–24: 112% CAGR in transactions and 111% CAGR in transaction value,

2. deep penetration beyond tier-1 cities (85% of merchants are outside top 8 cities in India),

3. sticky customer behaviour (99% customers repeat transaction in a month),

4. strong compliance and

5. profitable payments operations since August 2022.

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