IPO-Bound PhonePe Posts ₹2,792 Cr Loss In FY26, Revenue Up 11.5% YoY

Fintech major PhonePe’s net loss widened by 62% in the financial year ended March 2026 (FY26) to ₹2,792 Cr from ₹1,727.4 Cr reported in the previous fiscal year, as higher employee costs, elevated marketing spends, ESOP expenses, and one-time write-offs offset double-digit revenue growth.  

Operating revenue rose 11.5% to ₹7,920.5 Cr in FY26 from ₹7,105 Cr in the previous fiscal. Including other income of ₹467.4 Cr, PhonePe’s total revenue increased 10% YoY to ₹8,387.9 Cr. 

The bulk of its operating revenue came from the sale of services, which contributed ₹7,618.6 Cr during the year. The company also earned ₹286 Cr as incentives from the National Payments Corporation of India (NPCI) for deploying credit cards on UPI and payment acceptance devices. 

However, its bottom line was hit by multiple one-off charges during the fiscal. PhonePe recognised a goodwill impairment of ₹684.7 Cr related to Indus Appstore, which it acquired in 2023. 

“Following the strategic shift in business model, go-to-market approach, evolving business environment and the cash generating unit (CGU) remaining pre-revenue, the Group has determined that the future economic benefits from investments in the legacy business are no longer expected to be realised. Accordingly, in line with the requirements of IndAS, the group recorded an impairment loss on goodwill amounting to ₹684.7 Cr,” PhonePe noted in its audited financial statements. 

The company also booked an exceptional gain of ₹434.5 Cr from divesting a 5% stake in geotech company MapmyIndia, partially offsetting the impairment charge. 

In addition, the shutdown of its hyperlocal ecommerce platform Pincode resulted in a loss of ₹364.7 Cr from discontinued operations during FY26. 

Breaking Down PhonePe’s Expenses

PhonePe’s total expenses surged over 16% to ₹10,588.5 Cr in FY26 from ₹9,116.5 Cr reported in the previous year. 

The following were the key expense heads:

Employee Benefit Expenses: PhonePe’s employee benefit expenses rose 11.6% to ₹4,386.1 Cr from ₹3,931.7 Cr in FY25. Notably, the company recognised ₹2,390.5 Cr in ESOP expenses, which are non-cash accounting charges, during FY26, compared to ₹2,283 Cr in the previous year.

 Payment Processing Charges: PhonePe’s primary business lies in the processing of peer-to-peer and merchant UPI payments. The charges related to these activities stood at ₹1,907.1 Cr during the year, up 13% from ₹1,688.2 Cr in FY25. 

Marketing & Sale Promotion: Marketing expenditure nearly doubled to ₹956 Cr during the year from ₹496 Cr in FY25 as PhonePe stepped up customer acquisition and brand-building efforts. 

Subcontracting & Customer Support: The company spent ₹782.4 Cr under this head during FY26, up 36% from ₹571.9 Cr in the previous fiscal. 

PhonePe IPO On Hold 

PhonePe filed its updated DRHP in January for an IPO comprising only an offer for sale (OFS) by existing shareholders, including Walmart, Tiger Global and Microsoft. 

The company was said to be eyeing a valuation of $9 Bn-$10.5 Bn and was expected to raise between $900 Mn and $1.5 Bn through the public issue. However, it subsequently deferred its listing plans amid heightened geopolitical tensions and volatile market conditions. 

The company has provided no further updates on its IPO timeline.

Founded in 2015, PhonePe has raised over $2.3 Bn to date. It remains India’s largest UPI player by transaction volume. 

Despite its scale, PhonePe is yet to achieve profitability. Analysts previously pointed out that merchant payments, which contributed 21.8% of the company’s operating revenue in the first half of FY26, offer significantly stronger monetisation opportunities than consumer payments through platform fees, lending partnerships, EMI offerings and payment devices.

The company has also been expanding its financial services business across lending and insurance distribution. However, these businesses contributed only 6.3% of its total revenue in H1 FY26, underscoring the long road ahead in diversifying its revenue streams beyond payments.

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