The shares of this smallcap company jumped around 3 percent in Wednesday’s trading session after reporting an increase in net profits by 713 percent YoY. The stock has delivered a multi-bagger return of 117 percent to its shareholders in one year.
Price movement:
With a market capitalization of Rs. 4,203 crores, the shares of Zaggle Prepaid Ocean Services Ltd started Wednesday’s trading session on a higher note at Rs. 350.15 compared to its previous close of Rs. 355.95. During the trading session, the shares hit a high of Rs. 353.55, gaining around 3 percent and are currently trading at Rs. 342 apiece.
What Happened:
Such a positive movement in the share price was observed after the company announced Q1FY25 results. Quarterly, 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.
Furthermore, adjusted EBITDA stood at Rs 25.58 crore, registering a growth of 85.36 percent as compared with Rs 13.80 crore posted in the corresponding quarter last year. EBITDA margin was 10.1 percent in Q1 FY25 as against 11.6 percent in Q1 FY24.
As per the company’s statement, the year-on-year topline growth was primarily driven by an increase in credit card volume and consistent performance of its business spend management platform Zoyer, and client addition with a large user base.
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Management Commentary:
Commenting on the performance Raj P Narayanam, Founder and Executive Chairman, Zaggle Prepaid Ocean Services Limited said, “We began the year on a strong footing, achieving a revenue of Rs. 2,522.1 mn, a significant increase of 112.9% on a YoY basis in Q1FY25.
Our Adjusted EBITDA (before ESOP expense) for the said quarter was Rs. 255.8 mn, a growth of 85.3% on a YoY basis. The growth is largely led by strong demand for Zoyer and Credit card bundled solutions.
In line with our growth strategy, we are focused on inorganic growth opportunities in Spend Management space to enhance our leadership position. We are actively exploring complementary inorganic expansion opportunities and will provide updates as positive developments occur.
These potential acquisitions would help Zaggle to scale faster. With that being stated, we expect to continue a similar performance for upcoming quarters driven by increased customer base, newer use cases, deeper penetration into the existing customers and cross selling of our solutions.
For this fiscal year, we project a revenue growth of 45% to 55% over the previous fiscal year. Additionally, we reaffirm our goal of doubling our revenue within the next two years. We expect our Adjusted EBITDA to hold steady around current levels.”
Products:
Zaggle Prepaid Ocean Services Limited offers a diversified range of fintech and SaaS products and services, to manage business expenses, track employee and channel partner rewards, incentives management, merchant gift card management, and many more.
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. 99.3 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.
Written By Vaibhav Patil
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