ZAGGLE - Zaggle Prepaid

📊 NSE: ZAGGLE 🏢 Computers - Software - Medium / Small 📅 Last Updated: 12/14/2025 15:21

💰 Financial Performance

Revenue Growth by Segment

Total Operating Income grew 67.9% YoY to INR 1,302.65 Cr in FY25. Q2 FY26 revenue reached INR 431 Cr, up 42.4% YoY. Growth is driven by three segments: Program Fee Revenue (PFR) which saw 38% organic growth in recent quarters, Propel Platform Revenue (PPR) from reward redemptions, and SaaS Fee Revenue (SFR) from software subscriptions. H1 FY26 revenue surged 37.4% YoY to INR 762 Cr.

Geographic Revenue Split

Not disclosed in available documents, though the company is expanding into new geographies and investing in AI to scale products to a global level.

Profitability Margins

PAT margin improved to 6.72% in FY25 from 5.68% in FY24. Q2 FY26 PAT stood at INR 33 Cr compared to INR 19 Cr in the previous year. Cash PAT surged 70% YoY to INR 40 Cr in Q2 FY26. Profitability is constrained by the high contribution of reward point redemptions which are pass-through in nature.

EBITDA Margin

Adjusted EBITDA for Q2 FY26 was INR 44 Cr, up 48.1% YoY. FY25 PBILDT margin marginally declined to 8.85% from 9.11% in FY24 due to higher operational costs. The company maintains a guidance of 10-11% EBITDA for FY26, with a long-term target of 14-15% within 4-5 years.

Capital Expenditure

The company is investing heavily in AI and intangible assets to make products globally competitive, with these investments expected to continue through the end of FY26. Specific INR values for total planned CAPEX were not disclosed, but H1 FY26 saw negative Operating Cash Flow of INR 19 Cr due to business growth investments.

Credit Rating & Borrowing

Assigned a 'CARE A-; Stable' rating for INR 100 Cr long-term bank facilities. Interest coverage ratio improved markedly to 15.09x in FY25 from 5.27x in FY24. Total debt to gross cash accruals (TD/GCA) improved to 0.16x in FY25 from 1.67x in FY24.

⚙️ Operational Drivers

Raw Materials

Not applicable as Zaggle is an IT/SaaS company. Key 'inputs' are technology infrastructure, banking partnerships, and payment network access (Visa, Mastercard, RuPay).

Import Sources

Not applicable for this service-based business model.

Key Suppliers

Critical service providers include banking partners (e.g., AU Small Finance Bank, Suryoday Vega Pay) and third-party payment networks (Visa, Mastercard, RuPay) for transaction processing.

Capacity Expansion

User base expanded from 0.9 million in FY21 to over 3.2 million in FY25. Corporate customers grew from 1,092 in FY21 to over 3,400 by FY25. The company recently acquired 100% of Greenedge Enterprises and 81,429 shares in other entities to expand its service suite.

Raw Material Costs

Not applicable. Operational costs are driven by employee expenses, ESOP costs, and incentives/cashbacks which increase in line with business growth.

Manufacturing Efficiency

Platform efficiency is reflected in a low churn rate of less than 1.5% and the ability to handle over 50 million prepaid cards issued to date.

Logistics & Distribution

Distribution is primarily digital via a mobile application and unified dashboard for corporate administrators.

📈 Strategic Growth

Expected Growth Rate

40-50%

Growth Strategy

Growth will be achieved through organic expansion of the product suite, cross-selling to 3,400+ existing corporate clients, and aggressive M&A. Recent acquisitions include TaxSpanner, Mobileware (86400), Dice, and Greenedge. The company is also entering the retail segment via a tie-up with AU Small Finance Bank, targeting INR 500 Cr revenue from this segment by year 5.

Products & Services

SaaS-based spend management solutions, employee benefits platforms, expense management tools, accounts payable automation, and prepaid cards for rewards and incentives.

Brand Portfolio

Zaggle, Propel, ZUGS (Zaggle Unified Gig Worker Savings Platform), 86400 (formerly Mobileware), TaxSpanner, Dice, Rio.Money.

New Products/Services

Launched 'Credit Line on UPI' in partnership with Suryoday Vega Pay. New retail card segment expected to contribute INR 500 Cr revenue at the end of 5 years.

Market Expansion

Expanding into the B2C retail card space and gig worker tax filing segments. Targeting global markets through AI-enhanced product scaling.

Market Share & Ranking

Not disclosed, but established as a leading player in the digital expense management space with 50 million+ cards issued.

Strategic Alliances

Partnerships with AU Small Finance Bank for retail cards and a brand equity transaction with Bennett Coleman and Company Limited (Times of India) to access marquee media brands.

🌍 External Factors

Industry Trends

The industry is shifting toward unified spend management and SaaS-based fintech solutions. Current growth is driven by digital adoption and automated reconciliation. Zaggle is positioning itself by integrating AI and broadening use cases to include vendor and tax payments.

Competitive Landscape

Operates in a competitive fintech landscape with other spend management and SaaS providers; faces competition from traditional banks and emerging fintechs.

Competitive Moat

Moat is built on high switching costs (churn < 1.5%), a large network of 3,400+ corporates, and deep integration with banking partners. The 'omni-channel' offering combining hardware (cards) and software (SaaS) creates a sticky ecosystem.

Macro Economic Sensitivity

Sensitive to corporate OpEx spending and festive season cycles, which drive higher transaction volumes in H2.

Consumer Behavior

Increasing corporate preference for automated, transparent spend tracking and employee benefit digitization.

Geopolitical Risks

Not disclosed; primarily focused on the Indian regulatory environment (RBI).

⚖️ Regulatory & Governance

Industry Regulations

Strictly governed by RBI regulations regarding prepaid instruments and banking partnerships. Potential future caps on prepaid card interchange fees (similar to debit cards) represent a significant regulatory risk.

Taxation Policy Impact

The company operates TaxSpanner to assist clients with TDS and GST modules, indicating high sensitivity to Indian tax compliance frameworks.

⚠️ Risk Analysis

Key Uncertainties

Regulatory risk from RBI directives could impact cash flows by up to 30-40% if interchange fees are capped. Integration risk from multiple rapid acquisitions (Dice, Rio.Money, EffiaSoft) could impact margins if not accretive.