The shares of this smallcap company surged upto 6 percent in Thursday’s trading session after announcing the acquisition of a controlling stake in an information technology services company. The stock has delivered more than 60 percent in just six months.
Price Movement:
With a market capitalization of Rs. 5,504 crores, the shares of Zaggle Prepaid Ocean Services Ltd started Thursday’s trading session on a higher note at Rs. 436 compared to its previous close of Rs. 431.85.
During the trading session, the shares hit a high of Rs. 462, gaining around 6 percent and are currently trading at Rs. 446 apiece.
What Happened:
Such a bullish movement in the share price was observed after the company in an exchange filing announced that its Board of Directors had approved the acquisition of 1,066,314 equity shares at a price of Rs. 300.80 each, which represents a 98.32 percent stake in Span Across IT Solutions Private Limited.
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The total cost for this acquisition is Rs. 32.07 crores. Consequently, Span Across will become a subsidiary of the company once all necessary procedural steps are completed.
Further, the proposed acquisition gives the opportunity for Zaggle Prepaid Ocean Services to enter a new segment of employee-related business.
Additionally, the Board of Directors of Zaggle Prepaid Ocean Services also approved an investment of Rs. 15.6 crores for 26 percent ownership capital of Mobileware Technologies Private on a post-issue and fully diluted basis.
Mobileware is at the forefront of digital payments innovation in India and they offer an integrated product suite of NPCI-certified switch solutions across UPI, IMPS, AEPS & BBPS, along with an API & Agency banking platform called Transxt.
The collaboration between Zaggle and Mobileware is expected to create multiple use cases that enhance customer experiences while keeping payments at the forefront. As both companies work together, they aim to deliver best-in-class solutions that cater to the evolving needs of their clientele in an increasingly digital economy.
Financials:
Looking at the company’s financial statements, the revenue decreased by around 8 percent from Rs. 273.37 crores during the March quarter to Rs. 252.21 crores in the June quarter. On the other hand, the net profits declined by 13 percent from Rs. 19.16 crores to Rs. 16.73 crores during the same period.
However, comparing the same metrics on a YoY basis, the revenue zoomed by 113 percent from Rs. 118.48 crores during Q1FY24 to Rs. 252.21 crores in Q1FY25. In addition, the net profits magnified by 713 percent from Rs. 2.06 crores to Rs. 16.73 crores during the same timeframe.
Recent Development:
Recently, the company announced that it had entered into an agreement with HDFC Ergo General Insurance company.
According to the agreement details, Zaggle would provide the Zaggle Propel reward platform (Channel rewards & recognition) to HDFC Ergo. This agreement will remain in effect until August 31, 2025, unless terminated according to the terms specified within it.
Future Outlook:
Zaggle Prepaid Ocean Services is targeting over 40 percent revenue growth in the next financial year (FY25) based on its strong performance in Q1 FY25 and recent partnerships. Furthermore, the company is actively planning to enter the US market, exploring both organic and inorganic opportunities.
Customer Base:
The company holds the leading position for the issuance of prepaid cards in India, with 50+ million cards issued.
Further, it has a 16 percent market share by transaction value and has a strong business network with some notable key players such as Kotak Mahindra Bank, Visa, ICICI Bank, Yes Bank, and DBS Bank.
Prominent Investors:
According to the BSE data, Ace Investor Mr Ashish Kacholia, entering the stock in September 2022, currently holds around 27.03 lakh equity shares equivalent to a 2.37 percent stake in this company. The current holding value of his investment amounts to Rs. 132.2 crores.
Company Profile:
Headquartered in Mumbai, Zaggle Prepaid Ocean Services was incorporated in 2011. The company specializes in providing solutions for expense management, employee tax benefits, rewards and recognition programs, corporate gifting, and incentives.
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Written By Vaibhav Patil
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