Zaggle Prepaid Ocean Services Limited

Zaggle Prepaid reported its best-ever quarterly and nine-month performance. For Q3 FY26, revenue reached INR 498 crores, marking a 48% YoY growth. Adjusted EBITDA surged by 63% YoY to INR 51 crores, and PAT grew significantly by 78% YoY to INR 36 crores, with PAT margins improving to 7.2%. For the nine-month period of FY26, revenues from operations grew 41.4% YoY to INR 1,260 crores, with adjusted EBITDA increasing 47.5% YoY to INR 128 crores and Cash PAT reaching INR 121 crores, up 68.3% YoY.

The acquisition of Rio.money has been completed and rebranded as ZAGG.money, establishing it as the company's fourth monetization pillar, leveraging a base of 3.7 million salaried users. Management has earmarked a primary capital infusion of over INR 100 crores for ZAGG.money, targeting INR 500 crores in revenue from this segment within 4-5 years. Existing acquisitions like Greenedge and Mobileware (86400) continue to perform strongly, with Greenedge's 9-month FY26 revenue at INR 65 crores and Mobileware's YTD FY26 revenue surpassing INR 50 crores, projected to reach INR 65 crores for the full year.

Zaggle is transitioning from discussing AI's potential to validating its power in real-world scenarios through Agentic AI workflows. This integration has significantly reduced the development and deployment time for new product features from typically 75+ days to less than 30 days. The company anticipates further acceleration in this efficiency, leading to faster market responsiveness and lower production costs, particularly in complex tasks like vendor reconciliation and tax compliance.

The company is expanding its global footprint with the approval for a wholly-owned subsidiary in GIFT City, named Zaggle Payments IFSC Limited, to leverage the GIFT City ecosystem for cross-border payments and financial services. Plans are also underway to establish an entity in UAE to expand into the MENA region. Domestically, Zaggle has deepened partnerships with Visa and Mastercard, signing a 7-year agreement with Visa for co-branded prepaid cards and a 5-year contract with Mastercard for credit cards, enhancing spend-linked incentives.

Zaggle has seen strong traction in its Fleet Program, signing with IRM Energy, and in its Smart Employee Purchase Program (Smart EPP), securing multiple new contracts. The launch of a credit line on UPI products with Suryoday Small Finance Bank has already facilitated over 30 lakh transactions and INR 50 crores in lending. Furthermore, proposed draft income tax rules for 2026, extending employee tax benefits to the new tax regime and increasing permissible values for meal benefits and gifts, are expected to significantly boost the Save business and TaxSpanner.

Management guided for adjusted EBITDA margins to reach 14-15% within 5-7 years, alongside a target of $1 billion in revenue. While incentive costs currently stand at 66-67% of program fees, they are expected to stabilize at around 50% in approximately 5 years. The company is on track to achieve operating cash flow breakeven by FY26 and expects OCF to turn positive in FY27, with ESOP charges for the next year projected to be in the range of INR 3-4 crores.