Detailed Narrative
Strong Q2 and H1 FY26 Financial Performance
Zaggle Prepaid reported its best-ever quarterly and half-yearly performance. Q2 FY26 revenue grew 42% YoY to INR 431 crores, with adjusted EBITDA up 48% to INR 44 crores, and PAT surging 79% to INR 33 crores. For H1 FY26, revenue increased 37% YoY to INR 762 crores, adjusted EBITDA grew 39% to INR 77 crores, and PAT rose 68% to INR 59 crores. Cash balances stood at INR 573 crores as of September 30, 2025.
Upped Revenue Guidance and Maintained EBITDA Outlook
The company has upped its revenue growth guidance to 40%-45% for the coming years, reflecting strong performance and momentum. The EBITDA guidance remains consistent in the range of 10%-11%. Management also targets an adjusted EBITDA margin of 14%-15% over the next 4-5 years, indicating confidence in long-term profitability expansion.
Strategic Acquisitions and Global Expansion
Zaggle has made significant progress on acquisitions, completing transaction documents for Greenedge and expecting to close two more (Rio Money, Dice, EffiaSoft) soon. Mobileware (rebranded 86400) generated INR 24 crores in Q2 FY26 revenue with INR 4.8 crores PAT. After current acquisitions, the company expects to have INR 430-440 crores cash remaining and plans 2-3 additional strategic acquisitions. Global expansion is underway with an office in GIFT City and plans for a MENA region office.
New Partnerships and Retail Co-brand Business Potential
Zaggle has entered a retail co-branded partnership with AU Bank and is seeking 2-3 more bank partnerships. This new line of business is projected to generate INR 500-600 crore in revenue and INR 50-60 crore in EBITDA annually within 4-5 years, with cumulative targets of INR 1,200 crore revenue and INR 120 crore EBITDA. Operations for this segment are expected to commence in April 2026. The company clarified it does not bear credit risk for retail credit cards, as this is managed by partner banks.
Operating Cash Flow Challenges and Recovery Plan
Operating cash flow before taxes was negative INR 19 crores for H1 FY26, primarily due to investments in growth and supporting corporate customers during the festive season. Management expects to break even on OCF this fiscal year (FY26) and turn positive from FY27 onwards. Investments in intangible assets, including AI consultants, are also contributing to cash flow stress but are deemed necessary for global product scaling.
Cross-Sell Momentum and Product Diversification
The cross-sell percentage has increased to 21% from 16% at IPO, with customers adopting multiple products like BROME and fleet management solutions. New client wins include Adani Total Gas and Megha Gas for fleet management. The company is broadening its use cases beyond marketing spend to vendor and tax payments, aiming for a more holistic OpEx solution. Zoyer is expected to eventually overtake other businesses due to its wider use case.