Freecharge’s Financial Performance in FY25: A Shift from Profit to Loss

Freecharge, the digital payments and financial services provider owned by Axis Bank, reported a loss for the fiscal year ending March 2025, after achieving a profit of Rs 79 crore in FY24. This reversal is attributed to falling revenues and increased operational costs.

Revenue Decline and Sources

Freecharge’s operational revenue declined by 35%, dropping to Rs 297 crore in FY25 from Rs 454 crore in FY24, according to its financial statements obtained from the Registrar of Companies. The company earns from technology service providers (TSP) and commission fees, with revenue from TSP fees, making up nearly 49% of operating income, dipping by 16% to Rs 145.5 crore.

Significant Revenue Drops

The most substantial decrease in revenue was in the business support fees charged for financial and customer acquisition services to Axis Bank, which plummeted by 96% to Rs 6 crore in FY25, down from Rs 163 crore in FY24. Conversely, commission fees demonstrated substantial growth, rising 2.8 times to Rs 111 crore. Additionally, Freecharge generated Rs 15 crore from non-operational sources, bringing the total income to Rs 312 crore for the fiscal year.

Operating Costs Rising

Employee benefit expenses accounted for more than 55% of total costs, which surged by 19% to Rs 203 crore in FY25, compared to Rs 171 crore in FY24. Service charges saw an increase of 18%, reaching Rs 115.5 crore, while advertising expenses dramatically dropped by 87%, landing at Rs 6 crore during the same period. Other costs, including legal and professional fees, added Rs 32.5 crore to the overall expenditure.

Total Expenditure Overview

In total, Freecharge’s expenses rose by 2.2% to Rs 367 crore in FY25 from Rs 359 crore in FY24. The firm’s profitability waned due to falling revenues combined with slight increases in costs, resulting in a loss of Rs 42 crore in FY25 in contrast to the previous year’s profit of Rs 79 crore. Its return on capital employed (ROCE) registered at -17.96%, with the EBITDA margin slipping to -19.2% from 22.7% the year prior. On a per-unit basis, Freecharge spent Rs 1.24 to generate a rupee of operational revenue in FY25, compared to 79 paise in FY24.

Asset Changes and Financial Summary

The company’s total assets decreased to Rs 445 crore in FY25 from Rs 500 crore, whilst its cash and bank balances rose to Rs 139 crore. As of March 2025, Freecharge reported current assets of Rs 390 crore. Axis Bank purchased Freecharge from Snapdeal for Rs 385 crore ($60 million) in July 2017. Previously, the original founders Kunal Shah and Sandeep Tandon sold the wallet platform to Snapdeal for approximately Rs 3,000 crore ($400 million) in April 2015.