📌 At a Glance
Zaggle’s sales jumped from ₹68 Cr in FY20 to ₹1303 Cr in FY25 — nearly 20x in five years. But somewhere along the way, EPS did a somersault: from ₹2300+ to just ₹6.52. 🤯
Welcome to the fintech meets startup unicorn meets ‘why is ROCE falling’ universe.
🧠 About the Company
- Founded: Hyderabad-based SaaS + Fintech firm
- Products: Business spend automation, rewards, prepaid cards
- Target Clients: Corporates, SMEs, Startups (basically all TDS payers)
- Tagline Vibe: “Spend smart, not spreadsheet.”
Zaggle automates expense management — or as Indian startups call it, “office chai billing software.”
💼 Key Management Moves
- Promoter holding has risen to 44.21% – good sign.
- Recent acquisitions:
- Dice Enterprises for ₹123 Cr
- Greenedge Enterprises for ₹27 Cr
- Tax penalties of ₹2.59 Cr + ₹84.61 lakh received — appeals filed.
Classic fintech life: raise money, acquire stuff, fight with taxmen. 🧾⚖️
📊 Financial Performance: FY20–FY25
| Year | Sales (₹ Cr) | Net Profit (₹ Cr) | OPM % | EPS (₹) | ROCE % | Working Cap Days |
|---|---|---|---|---|---|---|
| FY20 | 68 | 4 | 16% | 206.67 | – | -118 |
| FY21 | 240 | 19 | 12% | 1073.89 | 154% | -2 |
| FY22 | 371 | 42 | 16% | 2328.89 | 124% | 32 |
| FY23 | 553 | 23 | 9% | 2.48 | 33% | 72 |
| FY24 | 776 | 44 | 9% | 3.59 | 17% | 129 |
| FY25 | 1303 | 87 | 9% | 6.52 | 13% | 100 |
🚨 Red Flags That Deserve a Tax Notice
- EPS crash from ₹2328 → ₹6.52 despite rising profit
- ROCE plummeted from 154% → 13% in 4 years
- Cash flow from investing is -₹486 Cr in FY25
- Acquisitions burning cash fast — where’s the synergy, bro?
- Zero dividends — still behaving like a seed-stage startup
🔋 The Good, The Bad & The Zaggle
✅ The Good
- 88% Profit CAGR over 5 years
- Debt reduced drastically — now just ₹16 Cr in FY25
- Massive increase in reserves (₹-65 Cr in FY20 → ₹1,234 Cr in FY25)
- Public shareholding down — more institutional interest
❌ The Bad
- Stock P/E at 70+ — priced like it’s AWS
- Working capital days remain high at 100+
- Secretarial compliance deviation in FY25 (minor PAN error – but… pattern?)
- ₹2.59 Cr GST penalty — could be the tip of the compliance iceberg 🧊
🧾 Fair Value (EduEstimate FY26)
Assumptions:
- FY26E Net Profit: ₹120–135 Cr
- Fair P/E Range: 30–35x (conservative for midcap SaaS/Fintech)
👉 FV Range: ₹3600 – ₹4725 Cr market cap
With 13 Cr shares: ₹277 – ₹363/share
👉 CMP is ₹460. Looks overheated unless growth continues at 50% CAGR.
🧠 EduInvesting Verdict
Zaggle has zagged its way to ₹1300 Cr revenue — but the profitability puzzle remains.
Its EPS went from god-tier to grocery-level.
It now stands at a strange intersection of:
- Fintech ambition
- SaaS-like valuation
- NBFC-style compliance slips
If India has 100 unicorns, Zaggle is that one centaur: half startup, half spreadsheet.
You either ride it… or get trampled by quarterly volatility.
📉 Risks to Watch
- Accounting clarity: Was the earlier EPS inflated by small equity base pre-IPO?
- Tax litigation
- Low margins (9%) despite fintech SaaS tag
- Working capital squeeze
- Thin moat vs corporate expense players like Happay, EnKash, Zeta
Author: Prashant Marathe
Date: June 10, 2025
Tags: Zaggle Prepaid, SaaS Fintech Stocks, FY25 Results, IPO Stocks, Expense Management, EPS Crash
