# Decoding PhonePe FY26: The Rs 364 Cr loss behind the Rs 2,792 Cr headline — retained record

> Retained news record from news:india-entrackr.

Canonical: https://highsignal.app/data/records/96ec8d5ed4b06966

[← sources](https://highsignal.app/data)


source: [news](https://highsignal.app/data/news) (news:india-entrackr)  published 2026-07-26 10:31 ingested 2026-07-27 09:38

[original source ↗](https://entrackr.com/fintrackr/decoding-phonepe-fy26-the-rs-364-cr-loss-behind-the-rs-2792-cr-headline-12199210)

## retained text



```
Walmart-backed fintech PhonePe reported modest growth in FY26, but its reported loss of Rs 2,792 crore doesn't tell the complete story. A closer look at the company's financial statements shows that a significant part of the loss came from non-cash accounting adjustments instead of its core ops.
Let's first look at where PhonePe's revenue came from.
The company reported operating revenue of Rs 7,920 crore in FY26. The bulk of this came from payment services, including transaction processing fees from bill payments, digital gold, and travel bookings. It also earned from platform fees, subscription fees for payment devices and smart speakers, advertising income, and its financial services businesses such as insurance, lending, stock broking, and mutual fund distribution. Together, these businesses contributed Rs 7,619 crore during the year.
In addition, PhonePe received Rs 286 crore as incentives from the Reserve Bank of India (RBI). Interest income and other non-operating gains pushed its total income to Rs 8,388 crore in FY26.
On the expense side, employee benefits remained the largest cost at Rs 4,386 crore. However, only Rs 1,994 crore, or around 45%, was paid as salaries. The remaining Rs 2,390 crore was booked as ESOP (employee stock option) expense.
Notably, around Rs 2,197 crore, or 91% of the ESOP expense, was a non-cash accounting charge. Since this does not involve an actual cash outflow, we have excluded it to understand the company's underlying operating performance.
Payment processing charges stood at Rs 1,907 crore during the year. Meanwhile, advertising and sales promotion expenses nearly doubled to Rs 956 crore. Including technology infrastructure, licensing fees, customer support, legal, logistics, and other administrative expenses, the company's total expenditure reached Rs 10,589 crore in FY26.
PhonePe also reported an exceptional loss of Rs 231 crore, largely due to goodwill impairment. Since this is another non-cash accounting adjustment and not related to regular operations, it has also been excluded from our adjusted loss calculation.
As a result, while PhonePe reported a net loss of Rs 2,792 crore in FY26, excluding the non-cash ESOP expense of Rs 2,197 crore and the exceptional goodwill impairment of Rs 231 crore brings the adjusted loss down to around Rs 364 crore.
The company also reported a loss of Rs 364 crore from its discontinued operations, mainly related to the closure of its hyperlocal commerce business, Pincode. Since the business generated limited revenue and has now been shut down, this move could help improve PhonePe's profitability going forward by eliminating a loss-making vertical.
Operationally, PhonePe continued to dominate India's UPI ecosystem. In June, it processed 10.48 billion UPI transactions, marking the fourth consecutive month in which it handled more than 10 billion transactions. The company accounted for 46.15% of total UPI transaction volume and 49.07% of transaction value, processing payments worth Rs 14.19 lakh crore during the month.
Earlier this year, PhonePe filed updated draft papers with SEBI for its proposed IPO, which is expected to raise around Rs 12,000 crore (approximately $1.5 billion). However, the Walmart-backed company has temporarily paused its listing plans amid geopolitical uncertainty and volatility in global financial markets.
```



document fetched 2026-07-27 09:38