Shares of Zaggle Prepaid Ocean Services dropped 10% to ₹424.30 on Q3FY25 earnings, which revealed robust revenue growth but increasing operating costs. Despite a 72% YoY expenditure rise, the business reported record revenue of ₹336 crores, driven by increasing program fees and customer spending.
Following the reporting of the business’s December quarter performance, shares of the SaaS fintech startup Zaggle Prepaid Ocean Services experienced heavy selling pressure in trade on Monday, February 10, reaching the 10% lower circuit limit at ₹424.30.
Following market hours on Friday, the business released its Q3FY25 results, which showed increases in both sales and profitability. The stock price fell significantly due to a dramatic increase in operational expenses brought on by growing staff and other expenses, negatively affecting investor confidence.
Spend management products and solutions provider Zaggle Prepaid had its highest-ever quarterly revenue of ₹336 crore in Q3FY25, representing a 68.6% YoY increase. On the other hand, operational costs increased 72% year over year to ₹308 crore.
Compared to Q3FY24, its EBITDA increased by 45% to ₹29 crore, and its EBITDA margin was 9.4%. The quarter’s profit after tax rose 33% yearly to ₹20 crore.
A 54% increase in program fees, fueled by an enlarged portfolio of credit and prepaid cards and more customer spending, is responsible for the YoY improvement in Q3 income. Higher redemptions throughout the holiday season also contributed to a robust 87% increase in Propel platform income.
According to the corporation, hiring more people to support business development is the main reason for increased labor expenditures. “The rise in cashback costs, incentives, and operating expenses is consistent with the business’s overall growth. The company stated in its Q3 earnings report that the overall ESOP expenditures for FY25 are anticipated to be between ₹95 and ₹100 million.
According to the company’s results report, it has grown its clientele to over 3,300 and signed agreements with several well-known companies, such as Blinkit, CanFin Homes, BigBasket, Mumbai Metro One, Mahindra First Choice Wheels, and Hitachi India.
The firm is optimistic that its top line will expand by 58–63% in FY25. To speed up expansion, it also assesses inorganic growth prospects; talks are presently in advanced stages.
Stock Down Over 18% in 3 Months:
Over the last three months, the stock has decreased, falling 18.3% from ₹519 to its current trading price of ₹424 per share. However, it has increased by 50% during the previous eight months. The stock is trading 158% higher than its IPO price of ₹164 per share.
One of the major players in the business-to-business-to-customer (B2B2C) market is Zaggle, which was founded in 2011. The business focuses on fintech solutions and provides corporate clients in a ravarioustors with software-as-a-service (SaaS) products and prepaid cards.
