PayU India, a leading digital payments and fintech company and the fintech subsidiary of Dutch-listed Prosus, has reported a robust financial performance for the fiscal year ending March 31, 2025 (FY25). The company's India revenue surged by a commendable 12% year-on-year, reaching $498 million, which translates to approximately ₹4,300 crore. This impressive growth underscores PayU's deepening penetration in the Indian market and its expanding suite of value-added services.

According to Prosus's annual report, the growth in PayU India's top line was primarily driven by an increase in total payment volume (TPV), which saw a 14% rise. This expansion in TPV was fueled by strong performance across several key segments, including financial services, government transactions, the booming airline sector, and the ever-growing food delivery industry. The diversification of its client base and the increasing adoption of digital payment solutions across these sectors have been crucial to PayU's success.

A significant milestone for PayU India in FY25 was its payments business achieving breakeven in the second half of the fiscal year. This marks a pivotal moment for the company, demonstrating a path towards sustainable profitability despite the intense competitive landscape in India's digital payments arena, particularly with the widespread adoption of the Unified Payments Interface (UPI). The report highlighted that despite a higher UPI mix, which typically results in lower take rates, the company managed to improve its Earnings Before Interest and Taxes (EBIT) margin by 1 percentage point to -2% for the full fiscal year. This indicates a positive trajectory towards profitability, reflecting improved operational efficiencies and strategic management.

The company's performance comes on the heels of receiving final approval from the Reserve Bank of India (RBI) to operate as a payment aggregator (PA). This crucial authorization, granted earlier this year, allows PayU India to onboard new merchants, significantly expanding its reach and market potential. For over a year, PayU had been operating under an "in-principle" approval, which had limited its ability to sign on new businesses. With the full PA license, PayU is now well-positioned to capitalize on the burgeoning digital payments market in India, serving a wider array of merchants across various industries.

PayU's strategy of expanding its value-added services, alongside its core payment gateway offerings, has also played a critical role in its revenue growth. These services often include solutions that help merchants manage their finances, optimize payment flows, and enhance customer experience. By offering a comprehensive ecosystem of financial tools, PayU strengthens its relationship with existing merchants and attracts new ones.

While the credit business within PayU India saw its actual consolidated earnings before taxes (aEBIT) loss grow from $20 million in FY24 to $32 million in FY25, this segment also witnessed a substantial revenue increase of nearly 60% to $171 million. Loan disbursements also rose significantly to $1.1 billion, with a notable 23% directed towards small and medium-sized businesses. The company's annual report indicated that this segment is actively taking steps to strengthen its risk practices and has shown early traction in improving recent loan cohorts, which is crucial for long-term sustainability in the lending space.

Overall, PayU India's FY25 results reflect a company that is navigating a complex yet high-growth market with strategic agility. The strong revenue growth, coupled with the payments business reaching breakeven, positions PayU India as a significant player in the country's rapidly evolving fintech landscape. As India continues its digital transformation journey, PayU's expanded capabilities and focus on profitability are likely to solidify its market position and contribute further to the nation's digital economy.