Zaggle Prepaid Ocean Services Limited

Technology — Software - Infrastructure · NSE

₹170.00+₹0.79 (+0.47%)

DalalBaazaar Score

55 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Reasonable but unspectacular business quality, though profits are falling even as sales grow. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

The 60-second version of Zaggle Prepaid Ocean Services Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Zaggle Prepaid Ocean Services Limited builds financial products and solutions to manage the business expenses of corporates, small and medium-sized enterprises, and startups through automated workflows.

IndustrySoftware - Infrastructure

SectorTechnology

Employees312

Annual revenue₹1,908 Cr

How does it make money?

Turns over ₹1,908 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 312 employees supports ₹6.11 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹6.11 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 13.5% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE32.0%

What is the outlook?

2 analysts covering the stock expect revenue to grow about 32.2% and earnings to grow about 62.1% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+32.2%

Est. earnings growth+62.1%

Analysts2

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +245% while net margin moved +75% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+245%

Margin effect+75%

DalalBaazaar Score

55/ 100

Moderate

Weighted across six categories. Every point is explained below.

✓ Beta of 0.60 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

53/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

71/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

17.6x

3Y Median

89.6x

39 monthly readings · mean 85.9x · range 16.5x–188.9x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 80% below its 3y median of 89.6x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟡Against its sector it is priced broadly in line with the peer median of 16.5x.

vs. its own history

Cheap

89.6x median over 39 months · -80%

vs. sector peers

Fair

16.5x median of 4 peers · +6%

vs. generic bands

Fair

15x–35x

EV/EBITDA

9.8x

PEG

0.21

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 8.1% to 11.9% over 3 years.
Debt is being paid down
Total debt is down 61% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 47.0% to 9.8% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 34.0% to 13.5% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 4 high

🔴High leverageFinancial
Debt/Equity of 3.88x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Inventory building faster than salesFinancial
Inventory up 767% against revenue up 245% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 8.1% to 11.9%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 61% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 80% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 3.88x. Interest is payable whether or not the business has a good year.
Returns on shareholder capital are falling
ROE has dropped from 47.0% to 9.8%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
4 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 38% a year✓ 51.1% CAGR
Latest reported year was 27.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 10%✓ 11.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹159 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 10%✓ 13.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

2 good · 6 neutral · 3 weak

Market Cap

₹2,290 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

17.6x

Fair

Fairly valued against the generic band

P/B Ratio

1.75x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹9.67

Profitable

Profitable on a per-share basis

ROE

9.8%

Moderate

Moderate capital efficiency

ROCE

13.5%

Moderate

Moderate return on the capital in the business

Debt/Equity

3.88x

High

High leverage

Revenue Growth (YoY)

27.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-33.0%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹159 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

10.3x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

29.4%

Good

Healthy core-business profitability

Net Margin

6.5%

Average

Average bottom-line conversion

Current Ratio

8.72

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.60

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

173.1 / 182.3

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

33.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹553 Cr	₹776 Cr	₹1,304 Cr	₹1,908 Cr	+51.1%
EBITDA	₹45 Cr	₹80 Cr	₹138 Cr	₹227 Cr	+72.0%
EBITDA Margin	8.1%	10.4%	10.6%	11.9%	—
PAT (Net Profit)	₹23 Cr	₹44 Cr	₹88 Cr	₹138 Cr	+82.0%
EPS	₹1.88	₹4.03	₹6.96	₹10.26	+76.2%
ROE	47.0%	7.7%	7.0%	9.8%	—
ROCE	34.0%	12.0%	10.0%	13.5%	—
Total Debt	₹141 Cr	₹87 Cr	₹20 Cr	₹55 Cr	-27.2%
Free Cash Flow	-₹32 Cr	-₹129 Cr	-₹48 Cr	-₹159 Cr	—

🟢 Revenue has grown at 51.1% a year over 3 years.

🟢 EBITDA has grown at 72.0% a year over 3 years.

🟢 EBITDA Margin has risen from 8.1% to 11.9% over 3 years (+3.9 pts).

🟢 PAT (Net Profit) has grown at 82.0% a year over 3 years.

🟢 EPS has grown at 76.2% a year over 3 years.

🔴 ROE has fallen from 47.0% to 9.8% over 3 years (-37.1 pts).

🔴 ROCE has fallen from 34.0% to 13.5% over 3 years (-20.5 pts).

🟢 Total Debt has shrunk at 27.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,554 Cr

Total Liabilities

₹147 Cr

Cash & Equivalents

₹106 Cr

Operating Cash Flow

-₹51 Cr

Capex

-₹107 Cr

Shareholding (proxy)

Institutional Holding

4.3%

Insider Holding

52.1%

Analyst Consensus

Recommendations

2 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹365

+114.7% vs CMP

Target Range

₹350 – ₹380

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

4 mixed2 general

Zaggle Share Price: Buy or Sell Guide

Univest, 04 Sept

Zaggle Prepaid Ocean Services (NSEI:ZAGGLE) Stock Price

Simply Wall Street, 17 Aug

Zaggle Prepaid shares jump 3% , extend 3-day rally to 16%. What's driving the rally?

The Economic Times, 20 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Zaggle Prepaid Share Price Tanks 20% To Hit 52-Week Low After Q1 Results Spook Investors

NDTV Profit, 17 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Why are Zaggle shares down 20% today

India Today, 17 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Zaggle Prepaid shares hit 20% lower circuit to 52-week low on weak June quarter earnings

Moneycontrol.com, 17 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongGrowth · Valuation

MiddlingFinancial Health

WeakBusiness Quality · Profitability · Risk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 4 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑