Zaggle Prepaid set to shine: JM Financial eyes 44% upside growth; details

Domestic brokerage JM Financial has initiated coverage on home-grown SaaS-fintech firm Zaggle Prepaid Ocean Services (Zaggle) with a ‘Buy’ rating and a target price of ₹520, reflecting an upside of 44.2 per cent. 

 

Analysts at the brokerage highlighted that the valuation at 30x September 2027E earnings per share (EPS) is ‘slightly conservative compared to other business-to-business (B2B) internet peers considering the recent margin dip and the rise in working capital requirement for Propel.’ The initiation, they said, is backed by Zaggle’s strong growth potential, scalable business model, and expanding product portfolio.

 

Founded in 2011, Zaggle has evolved from a corporate gifting player into a full-stack enterprise spend management platform. Its key products, Save, Propel, and Zoyer, allow corporations to automate and track expenses, while newer offerings are adding analytics and international payment capabilities. The platform is designed to help businesses digitise spending across employee reimbursements, vendor payments, channel partner rewards, incentives, fleet expenses, and other emerging use-cases.

 

 

The company’s scale and network give it a strong competitive edge. Zaggle has issued over 50 million prepaid cards, serving more than 3,550 corporates and over 3.3 million active users across multiple industry verticals. Its partnerships with 19 banks and all major card networks enable a wide reach while maintaining an asset-light model. Newer offerings such as fleet management and international payments (ZIP) are also opening up additional use-cases within the existing client base.  ALSO READ | LG Electronics India lists at 50% premium, Mcap at ₹1 trn; analysts bullish 

Zaggle benefits from major network effects and a growing moat. “Clients once onboarded see higher friction for platform switching, resulting in low customer churn (<1.5 per cent),” the brokerage noted. Cross-selling multiple products within the same client base further enhances monetisation. 

 

Strategic acquisitions, including Mobileware, Effiasoft, TaxSpanner, and GreenEdge, have strengthened Zaggle’s capabilities, positioning it as a full-stack “Spend-as-a-Service” platform rather than just a card issuer. These acquisitions, coupled with an acquisition pipeline, support the company’s value-enhancement strategy with minimal customer acquisition costs, analysts opined.

 

JM Financial analysts expect Zaggle to deliver a revenue / profit after tax (PAT) compound annual growth rate (CAGR) of approximately 34 per cent / 52 per cent over FY25-27E, driven by steady SaaS adoption, operating leverage, and incremental contributions from new products and adjacencies. Profitability is projected to improve as the revenue mix shifts toward subscription income and incentive costs normalise. Return ratios are expected to strengthen, with return on equity (RoE) / return on capital employed (RoCE) estimated at 14 per cent / 12 per cent by FY27E, reflecting a robust asset-light model and long-term growth potential in an underpenetrated market.

 

Key risks, according to JM Financial analysts, include slower adoption of newer products, potential competition from large banks launching prepaid or corporate cards, and margin volatility from investments in adjacencies, acquisitions, or international expansion.   ALSO READ | RBL Bank up 3%, hits 52-wk high amid Emirates NBD 51% stake purchase buzz 

Despite these risks, analysts believe Zaggle is well-positioned to benefit from the ongoing formalisation of business spends in India, offering investors strong compounding visibility and a long growth runway.

 

With a proven technology platform, strong network effects, and an expanding client base, analysts believe, Zaggle emerges as a compelling play in the B2B SaaS-fintech space. 

 

On the bourses around 10:20 AM, Zaggle share price was trading 1.84 per cent lower at ₹345.90 per share. In comparison, BSE Sensex was trading 0.26 per cent lower at 82,112.30 levels.