One MobiKwik Systems Ltd (NSE: MOBIKWIK) Q3 2026 Earnings Call dated Feb. 03, 2026
Corporate Participants:
Bipin Preet Singh — Chief Executive Officer, Managing Director
Upasana Rupkrishan Taku — Chief Financial Officer, Whole-Time Director
Analysts:
Rahul Jain — Analyst
Deepak Poddar — Analyst
Sanjay Ladha — Analyst
Vineet Gala — Analyst
Atul — Analyst
Smit Shah — Analyst
Sanjay Chawla — Analyst
Patel — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the MOBI Quick Q3FY26 Earnings Call hosted by Daulat Capital Markets Private Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your Touchstone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Rahul Jain from Daulat Capital. Thank you. And over to you sir.
Rahul Jain — Analyst
Thank you, Olavi. Good evening everyone. On behalf of Dalek Capital I would like to thank One Mobile Quick Systems for giving us the opportunity to host this earnings call. I welcome the Senior Management of One Mobile Systems represented by Mr. Singh who is MD and CEO of the company. Ms. Upasna R who is Executive Director and CFO of the company. I would like the management to take us through the Q3 FY26 result and now request management to take it over from here. Over to you Professor.
Bipin Preet Singh — Chief Executive Officer, Managing Director
Hello. Am I audible?
operator
Yes sir. Please go ahead.
Bipin Preet Singh — Chief Executive Officer, Managing Director
Yeah, hi, this is. Hi and good afternoon everyone. This is Bipin Preet Singh. I am the co founder and CEO of OneMobiquick Systems. I welcome you all to the earnings call for Q3FY26. Let me start with the, you know, summary of what we have done this quarter and then we can get into Q and A as per, you know, the questions that are being asked. So 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 you know, two business lines, primary business lines. One is the payments and second is financial services where primarily it is digital lending. So I will cover both of them one by one and then I will talk about consolidated level performance on the payment side. You know gmv, which is basically the total value of payments processed rose to an all time high in this quarter for 81 billion rupees which is a consistent and a record high for 12th quarter in a row. So our payments business growth is intact. It is grown up 63% year on year and 11% quarter on quarter.
This number and 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. So UPI transactions for Mobiquik which are visible also on the NPCI website in terms of the rankings have actually grown 3.2 times. You know, have actually grown 220% to 3.2 times in the last one year. And 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 are growing UPI at the same time we do have certain revenue making categories within payments and the growth 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 dispersals 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 disbursal of personal loans to a high of 9000 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 126% year on year growth.
So this is a, this is a big win for us of course on the disbursal numbers. But as you know lending business, 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 it’s also about the underlying quality of the book. So I’m happy to report that there is significant improvement, consistent improvement on the back of enhanced credit quality and collection efficiency. So that has resulted in 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.
So it’s not just the growth in disbursal 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 INR29.72 million, which is nearly 297 crores. And 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 INR1288 million, which is almost 129 crores.
Both the margins in payments and lending have improved and like we said that, you know, as margins have expanded, our growth has continued and cost has stabilized. We had a ebitda swing of 57.6 crores year on year, thereby landing at 15 crores of EBITDA 150 million, which is a 5% margin. And after the finance depreciation costs, this EBITDA has converted to PAT of INR 40 million, which is again a swing of 59 crores year on year. So both, you know, on the beta 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. So with this, you know, I will like to thank again everyone who’s listening to the call and I’ll hand it over to the operator for any questions.
Questions and Answers:
operator
Thank you. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Deepak Podar from Safaya Capital. Please go ahead.
Deepak Poddar
Yeah, am I audible, sir? Hello?
Upasana Rupkrishan Taku
Yes, we can hear you.
Deepak Poddar
Yeah, thank you very much 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? So how should one look at the trajectory going forward? Because I mean, earlier, I think before this tightening, we used to do 2500 crores of quarterly kind of a disbursement rate and currently it’s about 900 crores. So 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.
We can try to achieve that.
Bipin Preet Singh
So we have no such idea that we have to go back to a previous number because you know, 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. But since the position, regulatory position on this product has not been very clear coming from the market we had wounded down and if you see after Q4 of FY25 we have no contribution coming from, you know, from Zip, which was our BNPL product which was counted in this disbursal and that was contributing at one point or more than 1500 crores of disbursal in a quarter.
So 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. But mostly it is consumer peer which we are trying to do and approaching to do it with a very risk first approach. So 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. So what you will see going forward is also, you know, 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.
Deepak Poddar
Understood, Understood. I got it. And 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. So, so going ahead also we have say same kind of expectation.
Bipin Preet Singh
So there is, I mean I wish there was a formula that you could improve 15, 20/4 profitability every quarter. It will become infinite. But unfortunately you know, 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. So however, I don’t think we should expect significant improvement, more improvement in margins per se. It will be more about growth and growth of revenue and maintaining and growing the margin slowly.
Deepak Poddar
Okay, I understood. So our revenue growth led what you are looking at, not margin led growth?
Bipin Preet Singh
Yes, I think margin led growth there is some juice but you know it’s hard to say right now how much more is left.
Deepak Poddar
Fair point. That’s very clear sir, and very helpful. That would be from my side all the way. Best to you. Thank you.
Upasana Rupkrishan Taku
Thank you,
operator
thank you. The next question comes from the line of Sanjay Ladha from Bastion Research. Please go ahead.
Sanjay Ladha
Hi sir, thank you for the opportunity and many congratulations on a great set of numbers. So just a bookkeeping question on in the financial business, can we know the share of DLG versus non dlg?
Upasana Rupkrishan Taku
Yeah, hi, this is Upasana Taku. I’ll take that question sir. So the FLDG or DLG led business is 80% of the current quarter dispersal and 20% is the distribution led risk free business.
Sanjay Ladha
Okay. And so as you already highlighted in your starting commentary that you know the growth is primarily led to UPI business and despite that also we are seeing you know, revenue growth and margin growth. So just wanted to understand the payment side of wallet and bill payment which you talked about. How, what’s the, what’s the strategy for us going forward? How should we look? Is the growth that we are seeing right now in this business has been, you know there for a vc. Do we, do we envisage that growth going forward or any, 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?
Bipin Preet Singh
Thank you, got the question. So let me address that. So look, I mean we all know that UPI is a predominant payment system payment mode in the country today and it’s grown 29% over the last one year. But at the same time Mobiquik UPI numbers have grown 220%. So we are growing faster than the overall UPI ecosystem although we are very, very small. So we have 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.
So 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. So 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 because pure UPI bank upi, it’s easily switchable. But 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 your bank account for all UPI transactions.
And that gives us opportunities to cross sell more services including bill payments. So we can in some cases get convenience fees as well and bill payments. Also you make money from the BBPS ecosystem. So 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.
Sanjay Ladha
So just wanted to have a follow up or follow up. On that side is what we know is Pocket EPI 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? Because what I understand is your UPI and pocket UPI is growing, but in that space your revenue is also growing. 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.
Bipin Preet Singh
Yeah. So see like I said, you know when this UPI numbers are growing as well as Pocket UEI numbers are growing, especially because we have the wallet, we are able to generate higher margins. And 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 is not getting the same option elsewhere, who is not getting the option of a wallet elsewhere. So 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 and 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, but 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, you know, who’s a higher quality customer and that customer is actually taking loans as well. So overall our approach is that we are not looking to compete, you know, 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, for the cohort of customers who wants to use wallet, wants to take a loan, wants to make bill payments using wallet.
Sanjay Ladha
So in the, in our Q2 call we have said that our payment business margin or take rate would be 1415 basis point. Now it has inched up to 17 basis point. Is it sustainable or will be back to 1415? The sustainable will be 1415 odd if you can.
Upasana Rupkrishan Taku
Yeah, hi. So you’re right, you know, we had guided that, you know, 13 to 15 is the right number last quarter and 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 you know, looking at the wallet and the bill payments business, so 17bps is not what we are also seeing is a long term sustainable, you know, margin.
But yes, we do believe that 13, 14, 15, which is what we have been doing for the last four quarters, is a more sustainable net payments margin.
Sanjay Ladha
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 know in the previous comment or in the you have alluded to wealth management mutual fund side, do we see any, or do we see any take rate on that side? The improvement on that side as well?
Upasana Rupkrishan Taku
Yeah, so thanks for asking that question. I think on we are committed that in the mid to long term basis, you know, we will be scaling our wealth offerings just from a completeness of offering to the user and also from the perspective of stronger engagement and monetization. But 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 midterm 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. But 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. So while we are currently very small, we are ramping up our efforts on offline merchant acquiring.
In fact we have improved footprint from 366 cities to 1118 cities because we believe that under penetrated markets which will offer us good upside from a long term potential perspective. And we do want to scale up our merchant business there, the device business, edc, 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 zakpay has an online payment aggregator license from RBI which we also got in this financial year only. And here also we are trying to increase our E commerce merchant base and GMV from those merchants and 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.
Sanjay Ladha
I’m sorry just a follow up on that side in the merchant payment category so you know the larger players has been already gained the market share. So what are we you know offered differently compared to because the base has been quite large for the larger player and we are very small on that side. So just have your view, what are we doing differently on that side to acquire more customers in the merchant category side.
Upasana Rupkrishan Taku
So sir, you’re right we are still very small but this market is extremely large from a total addressable market perspective. And despite the fact that there are two three large players, you know 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, you know 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 you know 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 mobiquik Wallet and Nobiquik UPI on their app checkouts. So doing a cross sell off 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 and those merchants are not already having, you know, one or two sound boxes or EDC machines.
So that is there is a lot of room for growth there. So while there are players who have scale, they have not reached all of India. And 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.
Sanjay Ladha
Thank you so much ma’ am for answering and all the very best. Thank you.
Upasana Rupkrishan Taku
Thank you.
operator
Thank you. Participants, please restrict yourselves to two questions. For any more questions you may rejoin the queue because of paucity of time. Thank you. The next question comes from the line of Vineet Gala from Xylem pms. Please go ahead.
Vineet Gala
Hi, congrats on a good set. So in continuation of the previous discussion on the multiple businesses we are incubating, can you let me know that X of payment and lending business, what would be the incubation cost that is hitting our P and L? And how are we budgeting this for the next year? Hello.
Upasana Rupkrishan Taku
Yeah, hi, sorry. Yeah, just to repeat your question is that how much are we burning on incubating new businesses?
Vineet Gala
That’s right. So X of payments and lending business, what would be the cost that is in our fixed cost element in the pnl?
Upasana Rupkrishan Taku
Yeah, so you know the merchant business that I just described, which we are trying to build merchant offline devices and also online merchant I think put together, you know, would be around 13 to 15 crores of burn every quarter.
Vineet Gala
Okay, so all the. Okay, so how are we budgeting this for the next year? Next year are we expecting a break even on these particular businesses?
Bipin Preet Singh
So multiple sub segments within these businesses are already approaching breakeven. 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. And 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 and then basis that, you know, that benefit will start coming up both in our bottom line as well as in our top line.
Vineet Gala
Fair enough, fair enough. Also on the payments business, we’ve optimized a lot on the payment gateway cost. So if you can help me understand what percentage of our own internal transactions are we processing internally via ZackPay and is there any further room of reduction from the gateway cost of say like 27bps?
Bipin Preet Singh
So we at Mobiquick use multiple payment gateways, which include SacPay. And currently, you know, over the last many quarters, you know, the share of ZackPay for Mobiquick 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 ZakPay 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 mobiquit business.
Vineet Gala
So is there any further room of.
operator
I’m sorry to interrupt. Vineet, I would request you to rejoin the queue for any further questions. Thank you.
Bipin Preet Singh
That’s okay. Last. So I think there is not much more room available. I think we are operating there from, especially from card transactions point of view. However, like I said, you know, for the UPI transactions we’re still not making money. So we do expect that for UPI transactions also we will start getting the benefit over the over the next few quarters, but that will necessarily not come via the online payment gateway.
operator
Thank you sir. As the participant has dropped, we will move to the next participant who is Atul Godse from GM Financial. Please go ahead.
Atul
Hello team. Thanks for the opportunity. I had two sets of questions. One is on the recent that we were talking about offline penetration that you are doing on the merchant side in terms of devices, could you shed some light on like 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? And the second one is on basically a clarification on the BBPS transaction value that we have.
So does that also include the rent payments considering RBI has banned the rent through credit card. Thank you.
Upasana Rupkrishan Taku
Right, so we’ll take your first question first. So we’ve already informed, you know, as a first step that we have scaled up from about 300 cities to 1100 cities. And you know, you said that PIDF is not coming, so does that make sense? So 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. So these incentives are very small compared to our overall revenue and are therefore not material to us. So 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 little too early to give that information. And the second question that you had on rent pay. Yes, rent pay as a category has been shut down across all the players and so yes, it has been shut down on our platform as well. And 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.
Atul
All right, thank you.
operator
Thank you. The next question comes from the line of Smith Shah from JHP Securities. Please go ahead.
Smit Shah
Yeah, hi, am I audible?
operator
Yes.
Smit Shah
Yeah. Firstly, congratulations on a good set of numbers. My question would be that lending related cost has gone down to 3% of the digital credit GMV in this quarter. So what would be a sustainable range for FY25? And this quarter we have clogged 57% gross margins in the financial services vertical. So if you can provide a guidance for FY25 in terms of gross margins and lending related cost.
Bipin Preet Singh
So 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, you know, we can continue to maintain the credit quality and collection efficiency, which we do believe we can. This is 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.
So 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 zones.
Smit Shah
Okay, got it. Fair enough. And out of the 21 sequential growth in the UPI GMV, how much growth was driven by pocket UPI?
Bipin Preet Singh
So currently we are not disclosing the, you know, split between your PI and Pocket UPI given that, you know, look, we are still a small player in this. We will do that in, you know, in coming time. But what we do believe is that people who choose UPI Bank UPI on MobiQuik app, part of the reason why they choose that is also because Pocket UPI is available to them. So when they want to do a small transaction, they end up using a Pocket upi but if it’s a large transaction, they end up using bank upi.
So that combination works for people who understand that and therefore we are seeing the kind of growth that we are seeing.
Smit Shah
Okay, got it. But just qualitatively, was it like more than half of the growth was driven by Pocket upi? Any.
Bipin Preet Singh
No, it’s not the case. We have, you know, 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 has actually is giving us very good results.
Smit Shah
Got it, Got it. Thank you so much and all the best.
operator
Thank you. The next question comes from the line of Ankush Agrawal from Search Capital. Please go ahead.
Smit Shah
Yeah, hi. Thank you for taking my question. Firstly, just a clarification. The Pocket UPI and UPI credit card still not being monetized. Right. I’m assuming the total money that we are making on the payment side is largely the wallets and the building.
Bipin Preet Singh
True.
Sanjay Chawla
Okay. The second thing I want to understand is on your presentation you’ve stated that the Zakpay GMV has grown about 236%. Yes. Whereas if I look at a KPI book, that number is around thousand crores for the quarter. And the Same number was 943 crores. Q3FY25. So I’m not able to understand why that’s different.
Upasana Rupkrishan Taku
Yeah, thanks for that question. On the same slide that you are looking at, which is the building new mode slide, there’s a star marked with the gmv. So the GMV here excludes Mobiquick 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. So for example, what are my.
Smit Shah
Yeah, I understand that. But I think the KPI book number is net of these pass through only thousand crores that payment.
Upasana Rupkrishan Taku
No, no. The loan repayment Pass through is still there in the KPI but we for business purposes, we are business growth purposes, we are netting that off. So this number excludes both mobi quick as well as loan repayment related.
Smit Shah
Okay, so the KPI book number is including loan is what you’re saying?
Upasana Rupkrishan Taku
Yes, that’s right.
Smit Shah
Okay, so would it be possible for you to start sharing that net of that like the core Zakpay outside business?
Upasana Rupkrishan Taku
We will, we will eventually start sharing it. But you should know that right now, you know, the net contribution of ZackPay or the devices offline business is still very small to the overall, you know, it’s not even, you know, a decent number. That’s why we are not giving it. But point taken.
Upasana Rupkrishan Taku
Thank you.
operator
Thank you. The next question comes from the line of Rahul Jain from Dolat Capital Markets. Please go ahead.
Rahul Jain
Yeah, hi.
operator
Please go ahead.
Rahul Jain
Yeah, thanks for the opportunity and congratulations. Strong performance. So firstly in our shareholder letter you have expressed your focus on merchant acquisition, both online and fast paced. So in that light, can you share what are your top priorities here in terms of spend capex or just merchant count addition and how do you think it fees into our merchant advances business on the credit side?
Bipin Preet Singh
So Rahul, thank you for the question. So we are trying to, you know, build the business in a slightly more sharper fashion compared to how it has been built by the very big players in the merchant offline merchant space where, you know, 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.
And so the way we are going about it is more scientifically identifying those merchants and 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. And with that we can achieve breakeven at a much smaller scale compared to what the incumbents have achieved over the past many years. And we have taken the same approach as you know, 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, intelligence and data analytics. So we are taking a very clear but sustainable approach towards this business.
Rahul Jain
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 margin we are looking in the lending business.
Bipin Preet Singh
So we, I think partner already answered this. We are in a fairly stable zone when it comes to the lending margin, the financial services margin that we are seeing. We are operating with a stable credit quality, stable credit cost, a stable take rate. So we are not charging too high to the customer. We don’t have a, you know, we don’t have very high margins as well. We are not operating with high credit cost. So it is a very careful balance that we are maintaining and that is the hopefully that will continue to give us similar kind of margins in the coming quarter.
Will this improve significantly? You know, 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. But because the margins are so good in the financial services that will obviously impact the profitability and bottom line of the business. And in terms of older loans that 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.
Rahul Jain
Thank you. That’s it from my side and best wishes for the time.
operator
Thank you. A reminder to all participants, you may press star and one to ask a question. The next question comes from the line of Ram Sinha, an individual investor. Please go ahead. Ram, please go ahead with your question.
Smit Shah
I want to ask what is realization in bond.
Upasana Rupkrishan Taku
I’m sorry, can you repeat the question?
Bipin Preet Singh
Okay, so the, you know the bond product that we have put on our website. It’s me. It’s an extra experiment. It’s too early to say revenue realization but we expect half a percent to 1%.
Smit Shah
Thank you. Thank you very much.
operator
Thank you. The next question comes from the line of Sanjay Chawla from Renaissance Finances. Please go ahead.
Sanjay Chawla
Thank you for the opportunity. On the lending side your, you know the blended take rate still continues to decline. So where should we assume the steady state would be given? Your mix is 80, 20 in terms of FLDG and non FLDG.
Bipin Preet Singh
So currently it is 80% FLDG and 20%, you know, distribution. We Think this will continue or will slide 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. So we end up, you know, working with certain lenders like you know, LNT or Punawala and some of these guys to do higher ticket loans for higher tenures. We do it in distribution model. So there again take rates are 2.53%, 3.5%. Those are the take rates that we have is same as the margin that we are making overall in our lending business.
Because there are no cost, direct costs there for collections or any responsibility for credit quality. So in terms of total take rate, we think that it’s stable like the 7% number, even if in the ballpark. It may also reduce a little bit. But it will, 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.
Sanjay Chawla
Okay. And you know, you indicated the normalized margin like contribution margin in lending business would be in 3 to 4% range. Now this quarter you’ve done 4.13. So is there any one off anything on the collection side? You had one off, which is, you know, which will probably not continue. And then you get into the 3 to 4% zone.
Bipin Preet Singh
Like see, these are broad numbers, 3 to 4%. You know, 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, you know, the lenders that we have in place. So it’s mostly a function of that other than any change in the underlying credit quality or underlying, any, any assumptions.
Upasana Rupkrishan Taku
Just to clarify, there is no one off in the current quarter.
Sanjay Chawla
Okay. Okay. My second and last question is, you know, have you started, you know, doing merchant loans also or you are waiting for a certain minimum scale of whitelisted, you know, figure to start offering it?
Bipin Preet Singh
We are operating merchant loans, but it’s at a very small scale.
Sanjay Chawla
Okay. Okay.
Bipin Preet Singh
We have been testing the grounds for past many quarters, collecting data, perfecting the model. We do hope to scale it up in the coming quarters.
Sanjay Chawla
Is there a minimum period of, you know, data that you look at in terms of, look back data before you put it in the white list and start Offering it.
Bipin Preet Singh
So hard to say that. I mean, but you are right. There has to be minimum a few months of merchant being active before he can be given a loan. 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, can be either reduced or, or can be increased also.
Sanjay Chawla
Okay, my last question is, you know, when do you see an inflection point on the merchant loan side in terms of the, you know, the loan amounts and the number of merchants who can.
Bipin Preet Singh
Borrow it will, it will some. It will start having some numbers in the next financial year for sure. But you know, it’s not possible to give any particular prediction right now.
Upasana Rupkrishan Taku
Currently it’s too small. So we should treat it as experimental right now.
Sanjay Chawla
Okay, great. Thank you. And all the best.
Upasana Rupkrishan Taku
Thank you.
operator
Thank you. We take our last question from among Patel with Nuama Wealth Management. Please go ahead.
Patel
Yes, I’m audible.
operator
Yes.
Patel
Yeah. Evening ma’. Am. Happy on. On. Good results for Mobiquik. I had taken you from the last question. Just one question from my side. How do you decide, I mean to do fldg and how, how do you decide which one to pass to the distribution model in your lending business?
Bipin Preet Singh
So 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, 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 have seen the risk cohorts and we have 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 lease to our partners who are better equipped to assess the customer, we are happy to make just a pure distribution margin on such products.
Patel
Thank you sir. Thank you. Thank you.
Upasana Rupkrishan Taku
Thank you.
operator
Thank you. Ladies and gentlemen. That concludes the question and answer session. I would now like to hand the conference over to the management for the closing remarks.
Upasana Rupkrishan Taku
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. And 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.
operator
Thank you, ma’. Am. Ladies and gentlemen, on behalf of Daulat Capital Markets Private Limited, that concludes this conference call. Thank you for joining us and you may now disconnect your lines.