PhonePe shifts focus to monetisation, margins improve

Digital payments major PhonePe has reported strong revenue growth and a marked improvement in profitability metrics over the last three financial years, reflecting a strategic shift towards deeper monetisation and operational efficiency.

According to its Draft Red Herring Prospectus (DRHP), revenue from operations rose from Rs 2,914.28 crore in FY23 to Rs 7,114.85 crore in FY25, clocking a compound annual growth rate of 56.25 per cent. The growth was driven by higher monetisation across merchant payments, lending and insurance distribution.

Merchant payments significantly increased their contribution to total revenue, rising from 14.75 per cent in FY23 to 27.99 per cent in FY25, and further to 30.78 per cent in the six months ended September 30, 2025. Lending and insurance distribution also expanded, growing from 0.96 per cent in FY23 to 7.84 per cent in FY25 and 11.55 per cent in the latest half-year period, signalling diversification beyond core payment services.