This article first appeared on GuruFocus .
Release Date: November 11, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Zaggle Prepaid Ocean Services Ltd ( BOM:543985 ) reported a 42% year-on-year revenue growth for Q2 FY26, reaching INR 431 crores.
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The company's adjusted EBITDA increased by 48% year-on-year to INR 44 crores.
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The company has successfully launched new products, including the Zagal Global Pay ForEx card and a prepaid card in partnership with Mastercard and NSDL.
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Zaggle Prepaid Ocean Services Ltd ( BOM:543985 ) has entered into a retail co-branded partnership with AU Bank, expanding its presence in the retail credit card segment.
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The company has onboarded several marquee clients, including Adani Total Gas and Mega Gas, for its fleet management solutions.
Negative Points
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The company's operating cash flow before taxes stands at a 19% growth for H1 FY26, indicating potential cash flow challenges.
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There is a significant increase in intangible assets and working capital, which may stress cash flows.
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The company is facing pressure to execute large acquisitions, which may pose integration and financial risks.
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Despite strong revenue growth, the cross-selling rate has only increased marginally from 16% to 21%.
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The company's fleet management business, while promising, currently contributes minimally to overall revenue.
Q & A Highlights
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Warning! GuruFocus has detected 7 Warning Signs with BOM:543985.
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Q: Can you provide insights into the ramp-up of newer products, especially within the existing customer base, and any cross-sell penetration observed? A: We've seen great momentum in cross-selling, particularly with our Broome product and fleet programs. Cross-sell percentage has increased from 16% at IPO to about 21%, with many customers adopting multiple products, enhancing our penetration. - Avinash Bodhindi, CEO
Q: What is driving the faster growth in program fees, and how do you see it progressing? A: The growth in program fees is driven by the adoption of new customers and broader use cases beyond marketing spends, such as vendor and tax payments. We expect this growth to continue strongly in the coming quarters. - Avinash Bodhindi, CEO
Q: Can you explain the increase in intangible assets and its impact on cash flows? A: The increase is primarily due to manpower and external consultant expenses related to AI and product development. We expect this investment to continue for another year before normalizing. - Aditya Kumar, CFO
Q: What is the expected timeline and size for the upcoming acquisitions? A: We are closing two of the three announced acquisitions soon, with revenue sizes varying. Dice is expected to generate around 20-21 crores, while Iffy Soft is around 28-30 crores. - Avinash Bodhindi, CEO
Q: How do you plan to manage the credit risk associated with retail credit cards from the Rio.money acquisition? A: The credit risk is managed by the partnering banks, not us. We focus on program management, product co-creation, and first-level customer support, ensuring no balance sheet risk for us. - Avinash Bodhindi, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
