Ace Investor Ashish Kacholia’s stock specializing in providing automated solutions for business expense management hit a 10 percent lower circuit despite the positive Q3 results with a 30 percent rise in profit Year on Year.
Price action
With a market capitalization of Rs. 5,694 crores on Monday, the shares of Zaggle Prepaid Ocean Services Limited hit a 10 percent lower circuit making a low of Rs. 424.30 per share compared to its previous closing price of Rs. 471.40 per share.
Q3 Result Preview
Zaggle Prepaid Ocean Services Limited engaged in providing automated solutions for business expense management has announced its Q3FY25 results.
Its Revenue from operations grew by 69 percent YoY from Rs. 200 Crores in Q3FY24 to Rs. 336 Crores in Q3FY25 and it grew by 11 percent QoQ from Rs. 303 Crores in Q2FY25 to Rs. 336 Crores in Q3FY25.
Its Net Profit grew by 30 percent YoY Rs. 15.2 Crores in Q3FY24 to Rs. 19.7 Crores in Q3FY25 and it declined by 2.4 percent QoQ from Rs. 20.2 Crores in Q2FY25 to Rs. 19.7 Crores in Q3FY25.
The earnings per share (EPS) for the quarter stood at Rs. 1.61, compared to Rs. 1.66 in the previous quarter and Rs. 1.47 in the same quarter last year.
Reasons for the Fall
Zaggle Prepaid has posted a good result YoY despite a fall in Net profit by 2.4 percentQoQ. Markets allot premium valuation to stocks that they expect high future growth and when the stock fails to deliver the expected results the stock might witness a market correction. Zaggle is currently trading at a PE of 76.2 against an industry PE of 36.2 which is currently believed to be overvalued against its peers.
Broader market sentiments look volatile and may have contributed to the slump in Zaggle’s shares. Furthermore, In December 2024, Zaggle’s shares slumped following the opening of its qualified institutional placement (QIP) offer to raise Rs. 950 Cr, leading to investors’ dilution concerns.
The floor price for the QIP was declared at Rs. 550.73 per equity share, a discount of 1.8% from the previous closing price. The anticipated equity dilution was estimated to be around 10.5% to 16%.
About the company
Zaggle Prepaid Ocean Services Limited is one of the leading IT stocks and prominent players in the field of digital financial services, focusing on offering prepaid card solutions and other payment-related services. The company aims to simplify financial processes for its users while supporting a wide range of sectors, including corporate businesses, government institutions, and retail customers. Ace investor Ashish Kacholia holds 29,03,356 shares, representing a 2.16 percent stake in the company.
Prominent Partners and Clients
The key customers of Zaggle Prepaid Ocean Services Ltd include Hiranandani, Tata Steel, and Greenply. The company collaborates with prominent partners such as DBS, Kotak, IndusInd Bank, Visa, and Mastercard.
Written by Sridhar J
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