Posted on March 19, 2025, by Niftynews
Mobikwik stock has experienced an impressive recovery in recent days, rebounding 54% from its record low of ₹231.05 reached on March 17, 2025. The stock has surged by as much as 20% on consecutive days, peaking at ₹355 in Wednesday’s intra-day trade. This rebound has been accompanied by heavy volumes, with shares worth ₹1,398 crore changing hands on the BSE and NSE by 11:51 AM on March 19, 2025. Let’s explore the key factors driving this dramatic turnaround and what investors can expect moving forward.
Mobikwik’s Recent Stock Surge: A Quick Overview
- Heavy Trading Volumes: A significant part of the stock’s recent rally can be attributed to a substantial increase in trading volumes. By 11:51 AM on March 19, a total of 42.08 million shares—representing 54% of the company’s total equity—were traded, marking an increase of over 5-fold in volume compared to the previous sessions. This surge in trading activity indicates strong investor interest and a potential shift in market sentiment.
- Recovery from Record Low: Mobikwik stock touched a record low of ₹231.05 on March 17, 2025, following the expiry of the final lock-in period for institutional investors. However, the stock has since made a strong comeback, recovering 54% of its value. This sharp rebound is fueling optimism among investors, signaling potential upside in the near term.
- Market Capitalization Growth: Following the surge, Mobikwik’s market capitalization has risen to ₹2,634 crore, up from its previous level during the stock’s low period. This increase reflects the growing confidence in the company’s ability to overcome recent challenges and return to growth.
Why Did Mobikwik Stock Decline in the First Place?
The stock’s steep decline earlier in the week was driven by several factors:
- Expiry of Lock-in Period: The expiry of the final lock-in period led to an increase in the sell-off pressure, particularly from institutional investors who were previously restricted from selling their shares. This caused the stock price to plummet below its issue price of ₹279, causing a loss of investor confidence.
- Leadership Changes: The resignation of Chandan Joshi, Mobikwik’s CEO, added to leadership uncertainty, further weighing on investor sentiment.
- Weak Financial Performance: Mobikwik’s financial results for Q3 FY25 showed a consolidated loss of ₹55.2 crore, a significant decline from the net profit of ₹5.27 crore reported during the same period in FY24. The sequential loss of ₹3.59 crore in Q2 FY25 also raised concerns about the company’s profitability.
- Regulatory Challenges: The RBI guidelines on credit and lending further constricted the company’s ability to scale its credit business. This, combined with a sharp decline in financial services revenue and increasing lending costs, significantly impacted the stock’s performance.
What Is Fueling Mobikwik’s Recent Stock Rebound?
- Optimism for Future Growth: Mobikwik’s management remains optimistic about the future, particularly in its efforts to bounce back in the distribution of financial products. The company is also planning to launch new insurance and savings businesses, which could help drive growth and offset the challenges in the lending business.
- Strong Recovery Potential in the UPI Ecosystem: Despite the challenges, Mobikwik remains a key player in India’s UPI ecosystem, which continues to grow rapidly. With Gross Merchandise Value (GMV) projected to reach ₹30,000 crore for FY25, Mobikwik’s revenue potential from Merchant Discount Rates (MDRs) could increase, provided the company can navigate its current hurdles.
- Strategic Focus on Financial Product Diversification: The company is focusing on diversifying its revenue streams by venturing into other segments like insurance and savings. These initiatives are expected to help Mobikwik improve its margins and increase its overall market share in the coming years.
Analysts’ Perspective: What’s Next for Mobikwik?
Analysts are still cautious about the stock’s future due to the underlying structural challenges, such as regulatory constraints and leadership uncertainties. However, some experts believe that the recent rebound could signal a potential turning point. As the company optimizes its fixed costs and focuses on improving profitability, Mobikwik stock may stabilize and resume its growth trajectory.
Conclusion: Should You Invest in Mobikwik Stock Now?
While Mobikwik stock has seen a 54% recovery in just three days, the company faces significant financial and regulatory challenges. The recent surge could be seen as a rebound or a short-term correction, but long-term investors should closely monitor the company’s performance, especially its ability to scale its diversified businesses and address leadership issues.
For now, investors should weigh the risks and opportunities before making any decisions. Mobikwik may continue to experience volatility, but its recovery signals potential for future gains if it can successfully execute its business strategies.
