Nagad expected to achieve profitability by 2025
Nagad, the fastest-growing mobile financial services (MFS) carrier of the Bangladesh Post Office, is on track to become a profitable venture by 2025. With ongoing investments, the adoption of state-of-the-art technologies, an expanding customer and merchant base, and efforts to enhance financial outreach, Nagad is poised for success.
According to financial projections submitted to the Bangladesh Securities and Exchange Commission (BSEC), Nagad’s annual losses are expected to decrease to Taka 5 crore in 2024, and the company is projected to achieve a net profit of Taka 28 crore in 2025. The following year, in 2026, Nagad’s net profit is forecasted to more than double to Taka 64 crore. From 2027 onward, Nagad’s profits are estimated to surpass Taka 100 crore annually, as indicated by the company’s financial projections.
Nagad also anticipates a profit of Taka 171 crore in 2028, as stated in the documents submitted to the BSEC for approval of zero-coupon bonds worth Taka 510 crore. The BSEC has granted bond issuance approval to Nagad, considering its sufficient liquidity and demonstrated profitability forecasts.
Nagad’s financial projections indicate that the company expects to generate net revenues of Taka 1,144 crore in 2024, Taka 1,324 crore in 2025, Taka 1,532 crore in 2026, Taka 1,773 crore in 2027, and Taka 2,053 crore in 2028.
To enhance its services and provide a comprehensive financial solution, Nagad has made substantial investments in infrastructure development and technological upgrades. The company has already amassed a large customer base of over 75 million and processes an average of Taka 1,200 crore in daily transactions, thanks to its continuous innovations.
Read more: Asia Marketing Day 2023 in Bangladesh
While Nagad’s investments have temporarily delayed its profitability, the authorities involved believe that these endeavors will yield long-term dividends and establish a sustainable revenue stream. They remain confident that Nagad will soon become profitable.
Muhammad Zahidul Islam, head of public communication at Nagad, emphasized the company’s focus on improving people’s lives by facilitating seamless digital transactions, rather than solely prioritizing profitability. He expressed confidence that profitability would naturally follow as they bring about transformative changes and accelerate the country’s transition to a cashless society.
Industry experts acknowledge that while losing money is not ideal, startups focused on rapid growth often consume financial resources before achieving profitability. Fintech startups, including Nagad, are no exception to this trend. Rashad Kabir, managing director of Dream71 Bangladesh and director of the Bangladesh Association of Software and Information Services (BASIS), cited examples of global companies like Amazon, Facebook, Walmart, and Uber that prioritized growth before profitability.
Read more: DBL Ceramics-Prothom Alo ‘Abashon Mela 2023’
Nagad has already gained a strong position in revenue generation through successful government disbursements and various campaigns, such as the ongoing BMW campaign. These achievements demonstrate Nagad’s increasing strength and provide evidence of its trajectory toward becoming a profitable company.
Source: The Business Standard
