Zaggle Prepaid Hits 10% Lower Circuit Despite Strong Q3 FY25 Results

Zaggle Prepaid Ocean Services share price dropped significantly on Monday, February 10, hitting the 10% lower circuit at ₹424.30, despite reporting solid growth in revenue and profit for Q3 FY25. The fall came due to concerns over rising operating costs and employee expenses, which affected investor sentiment.

Revenue and Profit Surge in Q3 FY25

Zaggle Prepaid reported its highest-ever quarterly revenue of ₹336 crore, reflecting a 68.6% year-on-year (YoY) increase. The company’s profit after tax (PAT) also rose by 33% YoY, reaching ₹20 crore. EBITDA for the quarter increased by 45% YoY to ₹29 crore, with an EBITDA margin of 9.4%.

Reasons for Stock Decline

Despite the impressive earnings, operating expenses surged by 72% YoY, reaching ₹308 crore. This increase was mainly driven by higher employee costs due to workforce expansion, and increased incentives, cashback expenses, and operational costs. Additionally, the company projected ESOP expenses to be between ₹95-100 million for FY25.

Business Expansion and Future Outlook

Zaggle’s revenue growth was supported by a 54% rise in program fees and an 87% increase in Propel platform revenue during the festive season. The company expanded its customer base to over 3,300 clients and secured contracts with several major brands, including Blinkit, CanFin Homes, BigBasket, Mumbai Metro One, Mahindra First Choice Wheels, and Hitachi India. Zaggle expects 58-63% revenue growth in FY25 and is actively considering acquisitions for faster expansion.

Stock Performance

Zaggle Prepaid Ocean Services share price has been on a downward trend over the past 3 months, falling 18.3% from ₹519 to ₹424. However, it remains 50% higher over the last 8 months and is currently 158% above its IPO price of ₹164.

Founded in 2011, Zaggle Prepaid is a leading B2B2C fintech company that offers prepaid cards and SaaS financial solutions to businesses across various sectors.

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