Zaggle Prepaid Ocean Services Limited — Q1 FY26 earnings call

Call held 14 Aug 2025

Management summary

Zaggle Prepaid reported a strong Q1 FY26, achieving its best-ever Q1 revenue of INR 331 crores, a 31% year-over-year increase. Profitability metrics also saw significant growth, with PAT up 55% to INR 26 crores and adjusted EBITDA rising 28% to INR 33 crores. The company is actively pursuing strategic acquisitions and investments, with a focus on integrating new capabilities and expanding its global footprint, while also leveraging AI to drive operational efficiencies and maintain its 35-40% full-year growth guidance.

Highlights

  • Revenue of INR 331 crores, up 31% YoY, marking the best-ever Q1.

  • Adjusted EBITDA increased to INR 33 crores, growing 28% YoY.

  • PAT surged to INR 26 crores, growing significantly at 55% YoY.

  • Cash PAT, including depreciation and ESOP expenses, totaled INR 35 crores, a 57.6% YoY increase.

  • Propel platform revenue surged 50.6% YoY, while SaaS fee increased 19.8% YoY.

  • Mobileware, an investment, generated INR 17 crores revenue in Q1 FY26, surpassing its entire FY25 PBT.

  • The company maintains a churn rate below 1.5% and serves over 3,500 customers with 3.4 million users.

  • Strategic M&A focus on US and MENA regions, with 6 companies under investment/acquisition, 2 completed, and 4 progressing.

Key financials

  1. Revenue ₹331 Cr +31%YoY
  2. Adjusted EBITDA ₹33 Cr +27.9%YoY
  3. PAT ₹26 Cr +54.8%YoY
  4. Cash PAT ₹35 Cr +57.6%YoY
  5. Depreciation and Amortization ₹7 Cr

What they filed

Q1 FY27: revenue up 27.4%, net profit down 30.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue303 337 412 332 432 +43%526 +56%618 +50%423 +27%
EBITDA27 29 36 30 44 +63%52 +79%58 +61%31 +3%
Net profit20 20 31 26 35 +75%37 +85%41 +32%18 −31%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Propel Platform
    50.6% Revenue Growth₹176 Cr Propel Points Contribution
  • SaaS Fee
    19.8% Revenue Growth
  • Zaggle Platform Fee
    ₹10 Cr Contribution
  • Program Fees
    ₹145 Cr Contribution

Guidance & targets

Revenue

  • Overall Growth Revenue · FY26 · Medium confidence 35% to 40%
    fairly, fairly confident that we should be able to up our guidance from here, which was about 35% to 40%.

    — Raj Narayanam

  • Program Fees Growth Revenue · FY26 · Medium confidence 35% to 40%
    overall, for the year, the program fees guidance would also be in the range of 35% to 40% prediction.

    — Avinash Godkhindi

  • Dice Acquisition Revenue Revenue · FY26 · High confidence INR20 crores to INR22 crores
    This year, revenue should be in the range of INR20 crores to INR22 crores, right?

    — Avinash Godkhindi

Profitability

  • Savings from Integration Profitability · over the next 1 year · High confidence INR25 crores
    With these changes, we envisage savings of around INR25 crores over the next 1 year.

    — Raj Narayanam

Margin

  • EBITDA Margin Increase Margin · every year for the next 3 years · High confidence 100 basis points
    Yes, we are working towards that. That's what the guidance is.

    — Avinash Godkhindi

Cost

  • Incentive Cost as % of Program Fees Cost · At steady-state · Medium confidence 50% to 60%
    At steady-state, we will be somewhere in the range of 50% to 60% depending on the nature of business, right?

    — Avinash Godkhindi

Other

  • Number of large acquisitions Other · this year · Medium confidence one more
    There could be one more large acquisition that we'll do this year, which we'll announce in due course.

    — Avinash Godkhindi

Market context

  • Operational Cash Flow Cash Flow · FY26 · High confidence positive

    Previously negative → positive

    Optimistically, we will turn positive. We'll continue the momentum and we'll be in the positive in the current year as well.

    — Aditya Kumar

Risks & concerns

  • Geopolitical uncertainties and macroeconomic volatility

    medium

    Mentioned as a reason for waiting until Q2 to potentially raise guidance, indicating caution despite a bullish outlook.

    Management acknowledged

  • Integration challenges with multiple acquisitions

    medium

    Management stated that 'acquisitions are easy, but integrations are tough' and require significant management bandwidth.

    Management acknowledged

  • Pricing pressure in the tax filing segment from competitors like Jio

    low

    Management clarified that TaxSpanner focuses on sophisticated services for corporates and complex income, not the mass market, differentiating its offering.

    Analyst downplayed

Areas of evasion (3)

  • ESOP cost for FY27
  • specific revenue contribution timeline from international expansion
  • exact adjacencies for future acquisitions

Q&A highlights

1 direct
Program fees growth vs. overall guidance and Q1 seasonality Direct
Q1 traditionally has been a slow quarter for us because of the seasonality in the business. ... overall, for the year, the program fees guidance would also be in the range of 35% to 40% prediction.

Clarifies that while Q1 program fees growth was lower, the full-year guidance remains consistent due to seasonality, providing context for investors.

Asked by Parikshit Kabra

Incremental growth from inorganic acquisitions and Mobileware's performance Partial
It's a little early for us because some of these acquisitions are still getting closed. ... Mobileware is not an acquisition, but an investment. But there, we have seen fabulous results, already INR17 crores of revenue against in the just first quarter against the full year INR33 crores for the last full year.

Provides early insight into the success of one investment (Mobileware) and explains the delay in quantifying the full impact of other acquisitions, managing investor expectations.

Asked by Maitri Shah

Global footprint strategy, Dice acquisition, and international revenue contribution Partial
So the market that we are looking at is MENA. So that's the Middle East region largely. And the U.S., U.S. at the right time. ... A little early for us to talk of revenue contributions there.

Outlines key international expansion targets (MENA, US) and acknowledges that revenue contribution from these new ventures is still nascent, setting realistic expectations.

Asked by Aadipta Ghosh

2 min read 6 chapters

Detailed narrative

Strong Q1 FY26 Performance Driven by Core Business and Investments

Zaggle Prepaid reported a robust Q1 FY26, achieving its highest-ever Q1 revenue of INR 331 crores, marking a 31% year-over-year growth. Profitability also saw significant improvement, with adjusted EBITDA increasing by 28% to INR 33 crores and PAT surging 55% to INR 26 crores. The Propel platform was a key growth driver, with its revenue surging 50.6% YoY, while SaaS fees grew 19.8% YoY. An investment in Mobileware generated INR 17 crores in Q1 FY26 revenue, already surpassing its entire FY25 PBT.

Strategic Acquisitions and Integration for Future Growth

The company is actively pursuing an inorganic growth strategy, with 6 companies under investment or acquisition, 2 of which are already completed and 4 progressing. These initiatives are expected to add 600-700 people to the workforce and generate approximately INR 25 crores in savings over the next year through consolidated functions like technology, finance, and HR. Key proposed acquisitions include EffiaSoft for merchant services, Dice for spend management (expected to contribute INR 20-22 crores revenue in FY26), Greenedge for loyalty, and Rio.money for consumer credit cards.

Leveraging AI for Operational Efficiency and Product Innovation

Zaggle is deeply integrating AI across its operations to enhance efficiency and customer value. Initiatives include a flagship conversational AI platform for Zintel, a multilingual conversational AI tool expected to be ready in 3-4 months, and an AI-powered bill processing automation tool that has reduced overall TAT by over 80%. The company is also piloting an AI-driven claim validation and approval workflow, aiming to deliver tangible benefits to customers rather than chasing fashionable trends.

Expanding Market Reach and Ecosystem Partnerships

The company continues to expand its market presence through strategic alliances and ecosystem partnerships. A channel partnership with Grant Thornton will broaden access to corporate clients, while a 7-year agreement with Mastercard strengthens its prepaid card offerings. Zaggle has also onboarded Tata Capital as a leasing partner and OneAssist as an insurance partner, further enhancing its Smart Employee Purchase Program and overall ecosystem.

Positive Cash Flow Outlook and Continued Investment in Tech

After experiencing negative operational cash flows in previous years up to FY25, Zaggle has turned positive in FY25 and expects to maintain this positive momentum in the current fiscal year (FY26). This turnaround is attributed to the company's growth phase and focus on operational efficiency. In FY25, the company invested approximately INR 40 crores solely in developing in-house technology, underscoring its commitment to product innovation and building proprietary capabilities.

Global Expansion Focus on MENA and US Markets

Zaggle is strategically targeting international expansion, with the Middle East and North Africa (MENA) region and the U.S. identified as key priority markets. While it's still early to quantify specific revenue contributions from these regions, the company is making small-ticket investments through VC funds in early-stage SaaS companies in the U.S. to gain market insights and identify potential acquisition opportunities, aligning with its calibrated global footprint strategy.

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