Despite 63% upside call, Zaggle Prepaid hits lower circuit on Q4 earnings; here's why

Shares of Zaggle Prepaid Ocean Services crashed 20% in the afternoon session on Thursday after the firm reported its Q4 earnings today. The firm received a buy call from Equirus Securities, which gave a 63% upside to the fintech products' stock. Equirus Securities said Zaggle remains well positioned to benefit from the rising adoption of enterprise spend-management solutions, while acquisitions should further strengthen client stickiness across the platform. 

"We largely retain FY27 earnings estimates and  maintain LONG with a Mar’27 target price of Rs 455," said Equirus.

Despite Equirus' bullish stance, the stock hit a lower circuit of 20%. Zaggle Prepaid Ocean shares slipped 20% to Rs 227.65 against the previous close of Rs 284.55. Market cap of the firm slipped to Rs 3060 crore. Total 4.42 lakh shares changed hands amounting to a turnover of Rs 10.64 crore.

In terms of technicals, the relative strength index (RSI) of Zaggle stands at 65.8, signaling it's trading neither in the overbought nor in the oversold zone. The stock is trading lower than the 5 day, 10 day, 20 day, 50 day, 100 day and 150 day moving averages.

The stock has slipped 35 per cent this year and fallen 42% in six months. 

The fall in the stock can be cited to lag on the gross margins front on a quarterly basis. Gross margins slipped 542 bps to 40.8% in Q4 against 46.2% in the Q3 of the previous fiscal. 

EBITDA margins too fell 49bps to 9.4% in Q4 against 9.9% on a quarter on quarter basis. 

Brokerage JM Financial has a buy call on the stock with a price target of Rs 380.  

"With rising cross-sell penetration, new product traction (Zoyer, Zatix, ZIP) and recent acquisitions bolstering the ecosystem, we believe Zaggle has a long growth runway in an under-penetrated market. We reiterate BUY with Mar’27 TP of Rs 380 (~34% upside), assigning 20x FY28 P/E, conservative considering the robust growth trajectory," said the brokerage. 

Zaggle reported a 30% rise in consolidated net profit to Rs 40.6 crore in Q4 against a net profit of Rs 31.13 crore in the year-ago period. 

Revenue from operations rose 49.9% to Rs 617.91 crore in Q4FY26 compared to Rs 412.1 crore in the same quarter of FY25. On a quarter-on-quarter basis, profit and revenue clmbed 11.6% and 17.5%, respectively.

Zaggle’s net profit jumped 57% to Rs 138 crore in FY26. Revenue rose 46.3% to Rs 1,907.64 crore.

“With a third consecutive quarter of record performance, we closed FY26 on a strong footing, delivering our strongest-ever quarterly and annual results. We moved decisively from AI-led vision to full-scale execution with dual AI engines: one driving internal efficiency and another one powering our customer-facing capabilities,” Raj P Narayanam, Founder and Executive Chairman, Zaggle PrepaidOcean Services, said.

Zaggle Prepaid Ocean Services, incorporated in 2011, provides fintech products and services to manage corporate business expenses through automated and innovative workflows. It had seven offices across the country with more than 1,750 customers.