Ladies and gentlemen, good day, and welcome to Zaggle Prepaid Ocean Services Limited Q4 and FY 2026 earnings conference call. This conference call may contain certain forward-looking statements about the company, which are based on beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Raj P Narayanam, Executive Chairman, Zaggle Prepaid Ocean Services Limited. Thank you, and over to you, sir.
Thank you so much. Very good evening to everyone. Thank you for joining the earnings call for Zaggle Prepaid Ocean Services Limited for the fourth quarter of fiscal year 2026. On behalf of the company, I extend a very warm welcome to all of you. On this call, we are joined by Mr. Avinash Godkhindi, Managing Director and CEO, Rajesh Tummalaganti, our Interim CFO, and SGA, our Investor Relations Advisor. The financial results, press release, and the investor presentation are uploaded on the stock exchange and on the company website. I hope everybody has had a chance to look at it. Now ready for the Zaggle business update. You know, FY 2026 marked a historic milestone for Zaggle as we delivered our strongest annual financial performance to date.
Talking about our standalone quarterly performance, comparing Q4 FY 2026 to Q4 FY 2025, the company reported a healthy growth in revenues at about INR 593 crores, growing at around 44%. Our adjusted EBITDA increased to INR 55 crore, growing at about 45%. The PAT surged to around INR 38 crores, growing at 18%. Talking about our consolidated quarterly performance, comparing Q4 FY 2026 to Q4 FY 2025, the company reported a healthy growth in revenues at about INR 618 crores, growing at around 50%. Our adjusted EBITDA increased to around INR 60 crores, growing at around 62%, and the PAT surged to around INR 41 crores, growing at about 30%.
Talking about our standalone annual performance comparing FY 2026 to FY 2025, the company reported a very healthy growth in revenues at INR 1,853 crores, growing at around 42%. Our adjusted EBITDA increased to INR 183 crores, growing at around 47%. The PAT surged to INR 133 crores, growing at about 52%. Talking about our consolidated annual performance comparing FY 2026 to FY 2025, the company reported a healthy growth in revenues at INR 1,908 crores, growing at around 46%. Our adjusted EBITDA increasing to INR 192 crores, growing at around 51%. The PAT surged at around INR 139 crores, growing significantly at around 52%. I want to further give an overview of Zaggle investments and acquisitions as the part of the Zaggle update.
In FY 2026, we completed two strategic acquisitions, GreenEdge Enterprises and more recently Rio.money, which has now been rebranded as Zag.money, which adds to our existing portfolio of 86400 and Tax Spanner, which continue to deliver a strong and consistent performance. On 86400, earlier Mobileware, revenues grew from about INR 34 crores in 2025 to INR 74 crores in FY 2026, represented a remarkable, you know, year-on-year growth of 118%. EBITDA grew from around INR 5.4 crores in FY 2025 to around INR 18 crores in FY 2026. PAT grew around from INR 1.6 crores to INR 11 crores in FY 2026.
This remarkable performance is driven by healthy growing UPI volumes across all partners along with new partnerships like, you know, Thane Janata Sahakari Bank, ftcash, Fino Payments, and some of the other banks. On TaxSpanner , while we are not very stoked about the performance through the last financial year, we have taken a very following calculated steps. We have appointed new members on the board of TaxSpanner , which is Mr. Avinash and Nilesh Dadpe.
We are in the process of rebranding Tax Planner as Z.Tax. We will look to time it somewhere in the quarter two this financial year, along with the launch of our new tax AI co-pilot, backed by our entire unified platform strategy, which will cater not only to individual returns, individual return filers, but also deeply integrated into the TDS and GST filings, which will get embedded into our product suite. We are also looking to leverage cross-sell of our Zag.money retail trade cards on the larger customer base of Tax Planner. The tailwinds from the new tax regulations provides a perfect entry point for AI-driven disruption. While competitors remain tethered to outdated offline workflows, we look to leverage AI automation to capture market share and render, you know, traditional models absolutely obsolete.
Our partnership with Quess Corp, which has got a 5 lakh plus user base, is shaping up very well. We are hopeful of multiple such contracts in this year to add to our corporate base. Net, net, we see a very, very good year coming for Tax Planner this year. I think, you know, our overall focus on making taxes a integral part of our entire Fintech suite will go a long way. On GreenEdge, which runs the golf privileges program for various banks and networks like ICICI, Amex and others, along with the entire reward program for NPCI, revenues grew significantly from around INR 36.54 crores in FY 2025 to around INR 103.7 crores in FY 2026. Which is like roughly about, you know, 300% jump.
EBITDA grew from around INR 3.4 crores to about INR 11 crores in FY 2026, and the PAT grew from INR 2.1 crores in FY 2025 to around INR 8.1 crores in FY 2026. You know, which is like, you know, a 4x jump in the net profit. In 2027 we project standalone revenue growth from GreenEdge to range anywhere between 40%-50%. Our focus this year will be on adding new clients within the banking sector, as well as cross-selling to existing customers, and we look to continue to engage deeply with NPCI on running their entire benefits program, which is growing in tandem with growing UPI spends. On Zag.money, the traction within the entire credit card on UPI and TPAP ecosystem has surpassed our initial expectations.
Our strategy involved leveraging data-driven insights from the existing about 25,000 cardholder base and the larger UPI base into a targeted pilot framework for our established corporate base. With this, I am happy to announce that we have accelerated to an annualized run rate of new acquisition of about 36,000 to 40,000 cards with just a 8-week window. While this trajectory signals, you know, significant market fit, our execution remains grounded in our broader financial commitments. We are prioritizing these early wins as supplement to rather than a distraction from our 5-year goal, which we have also said multiple times, of INR 500 crore revenue and a INR 65 crore EBITDA milestone.
Regarding EffiaSoft, we have reassessed the strategic need for our proposed acquisition of EffiaSoft, and in this entire world when AI is taking over, we have decided not to proceed ahead with the transaction. Lastly, I am very pleased to announce the signing of definitive documents for the acquisition of Dice. Transitioning to an asset purchase from an erstwhile share purchase, we have secured the complete spend management product suite and intellectual property, along with their entire enterprise contract portfolio for approximately INR 68 crores, excluding GST, a significant optimization from the initial INR 123 crore valuation. This acquisition integrates advanced AI capabilities into our ecosystem, positioning us to lead and dominate the travel and expense and procure-to-pay markets. I would like to take this opportunity to welcome around 100-plus talented AI skilled professionals from the Dice team.
We are super excited about this acquisition, primarily on account of the existing AI-enabled SaaS revenue, which is a high-margin revenue, as all of us know. You know, the margins range about 95 odd%. Gross margin is about 95 odd%, okay? Along with immediate synergy of capturing transaction spends of a larger corporate base. Looking ahead, we remain committed to identifying high-level, high-impact M&A opportunities across domestic and international markets. With a focus on adjacent sectors, we intend to strategically deploy our QIP proceeds over the coming quarters to further accelerate our growth trajectory. I would like to give you a brief update on our product developments. I hope you would have gone through the note on our AI developments.
You know, we will also publish another, you know, note on it in the near future, could be 2 quarters, so that you could also see the results of, you know, some of the innovation which we have done. In FY 2027, we continue to focus on our dual engine strategy designed to accelerate product delivery and deploy autonomous agents across our entire ecosystem. We are leveraging AI to reduce feature launch times by up to 50%, shifting from manual development to an AI-accelerated life cycle that optimizes workforce efficiency. For our enterprise clients, the roadmap emphasizes the transition from traditional software to agentic solutions, where AI autonomously handles complex tasks like invoice mapping, tax optimization, real-time policy enforcement. You know, we will continue to follow our model of human-in-the-loop, you know, till AI develops to a stage where it doesn't require humans.
Leveraging the timely asset purchase of Dice, we are planning to invest in deep vertical AI and small language models specifically trained on compliance frameworks. This technical foundation is expected to act as a launchpad for our global expansion into global markets, allowing for highly accurate localized financial intelligence. I would like to give an update on our international expansion plans. We remain committed to our global expansion plans for the UAE as our primary growth pillar, recognizing the massive demand for sophisticated spend management solutions within the region's public and private sectors. You know, While we are, we remain mindful of the regional volatility which is there and this war which is, you know, which is taking a little bit more time, you know, to subside.
We are continuously engaging with the government, banking, and commercial partners in the region while maintaining go-live readiness once peace restores. Our expansion into U.S. market is moving at a rapid pace. Fueled by our vision to redefine global spend management, we are on track to kick-start our U.S. operations by financial year-end. Earlier, we had thought that we'll do it by June 2026, but looking at the war, and there's a lot of uncertainty around, we have just pushed it by 2 quarters. We want to leverage the significant momentum which we have gained from the Dice acquisition. With this, the deployment of our next-generation AI-powered suite, a comprehensive solution designed to handle the multi-currency, high compliance demands of the American enterprise landscape.
We are excited to bring this level of automated intelligence to one of the world's most dynamic financial markets. As guided in our earlier filings, we are currently projecting our, you know, this is on guidance. We are projecting our standalone FY 2027 growth to be around 25%-30%, with our consolidated growth for FY 2027 to be around 40%. On EBITDA guidance, due to the change in structure of the Dice acquisition from a 100% share acquisition to an asset purchase agreement, along with the onboarding of employees, which will effectively sit on the standalone P&L, we would like to give guidance on EBITDA over the next few months once the entire integration effort completes.
On cash flows, we have significantly improved our performance on the operating cash flow metric as compared to what it was back in Q2 FY 2026. You know, we are minutely focused on, you know, improving the cash flow and bringing it to a high positive level. You know, currently, if you look at it, we are just about minus INR 6 crores on negative cash flow, and we will look forward to improving it to a positive cash flow in the coming quarters. As highlighted, you know, this remains the metric which we continuously track extremely closely, and we would want to prioritize along with driving enhanced revenue growth and expanding our margin profile.
Lastly, I want to take this opportunity to thank Venkata Aditya Kumar Grandhi for his valuable contribution to Zaggle's journey as CFO. The board has approved the appointment of Mr. Rajesh as interim CFO till the time a new Chief Financial Officer is appointed by the board, which should happen very, very soon. I now hand over to our CEO, Avinash Godkhindi, to carry on.
Thank you, Dr. Raj. A very warm welcome to everyone joining us on the call today. Before I begin with the company details, I would like to congratulate Dr. Raj on receiving the Star of the Year award, Fintech Industry, at the Hurun India Stars of AP & Telangana 2026. Under his re-leadership, Zaggle has scaled new milestones year after year. Thank you so much, Dr. Raj. I would like to give an overview of a few key metrics. I'm happy to share today that we have around 3.9 million active users who use Zaggle Power Cards and software, a strong testament to the scalability and adoption of our platform. We now serve more than 3,900 corporate customers across a wide spectrum of industries and sectors.
Talking about our standalone revenue mix for the quarter, SaaS platform fees contributed to around INR 13.1 crore. Program fees contributed about INR 222 crore. Propel Points contributed to around INR 358 crore. As you can see, our SaaS platform contributes to around 2.2% of our overall revenue. When you think about the impact of AI on our business, it is important to note that our core monetization is driven majorly by transaction-based revenues, which is program fees and Propel Points. In fact, the integration of AI has helped improve our efficiency tremendously. For instance, product customization timelines have reduced. As highlighted by Dr. Raj earlier, our inward AI approach has enabled meaningful time savings for our employees. Now to talk of a few business highlights.
During the quarter, we have signed multiple marquee clients, including Rebel Foods, Saurashtra Cements, Blue Star, CNH Industrial, Phonak, Centrum General Insurance, Trust Wealth, Impresario Entertainment, and Federal Bank, among others. To further illustrate this with a specific use case, one of our clients in the real estate industry was struggling with significant operational friction caused by high usage of cash and manual treatment of more than 2,500 expense vouchers per month. The lack of a versatile digital payment instrument and central control system led to persistent spend leakage and frequent delays in in-site operations. To resolve these inefficiencies, we deployed the BROME module of the Zaggle ROAR platform. BROME stands for Branch Recurring Operating Monthly expenses.
To implement the established QR UPI-based central payment hub that entirely eliminated the need for cash, related reconciliation and manual handling of the vouchers, along with a mobile-first workflow and real-time visibility into property level spending, effectively plugged the leakages. I also want to highlight one of our existing client who operates in the retail sector, managing expenses across 200+ branches, largely led to delays, manual follow-ups and complex reconciliations. To resolve this, we implemented the BROM module of our Zaggle Zoyer solution. The on-ground measurable impact seen was absolutely phenomenal. Almost 200+ are saved every month across the branches, along with 90% better visibility and control over branch utility spends.
An added benefit which the client saw was around INR 3 lakhs saving per month in avoiding late payment penalty fees that major billing payments, major billers levy on these payments when you do it timely when you delay the payments. Our platform-first strategy remains a primary growth driver with a healthy pipeline of new wins and deepening account penetration set to accelerate our momentum. In Q4, we were able to cross-sell to large number of clients, including Hexalog, GMR Goa, CNH International, amongst others. With that, I would now like to hand over the call to our Interim CFO, Rajesh, who will take you through the financial update in more detail. Thank you.
Thank you, Anuj. Good evening, everyone. I would like to take this opportunity by giving the quarterly update first as our reported EBITDA at a standalone basis stood at around INR 55 crore with a year-on-year growth of around 50%. This was mainly driven by improved operating leverage and the process improvements. On the similar lines, reported EBITDA margin expanded to 9.3%. Quarterly PAT recorded around INR 38 crore with a margin of 6.4%. Reported EBITDA at a consolidated basis stood at around INR 60 crore with Y-O-Y growth of 68% with reported EBITDA margin expanding to 9.7%. Quarterly PAT recorded is around INR 41 crore with a margin of 6.6%. Coming to FY 2026 update.
Reported EBITDA at a standalone basis stood at around INR 181 crore with a year-on-year growth of around 57% with reported EBITDA margin expanding to 9.7%. Annual PAT recorded is around INR 133 crore with a margin of 7.2%. EBITDA at a consolidated basis stood at around INR 189 crore with year-on-year growth of around 61% with reported EBITDA margin expanding to 9.9%. Annual PAT recorded is around INR 138 crore with a margin of 7.3%. I also wanted to give you an update on some of the other points. Employee costs have reduced mostly on account of adoption of AI initiatives in the business. Increase in depreciation and amortization driven by capitalization of new technology and product developments reflecting our continued investment in innovation.
On segmental performance, our Propel platform revenue surpassed a mark of INR 1,000 crore for the first time. This was mainly driven by demand across the products. Program fee contributed 41% to the revenue, with a SaaS fee contributing around 2% to the revenue. We have observed significant increase in interchange fees, largely driven by performance of our Zoyer and BROME solutions, along with organic growth in the Save and Propel businesses. Also, I'll take this opportunity to reiterate our focus on the three key metrics, which we will look forward at the upcoming year: operating cash flow, revenue growth, and margin expansion. With that, I would like to conclude my update; we are happy to open the floor for questions. Thank you.
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Ladies and gentlemen, please limit your questions to two per participant. Should have a follow-up question, we request you to rejoin the question queue. First question is from the line of Aastha Jain from Pkeday Advisors. Please go ahead.
Hello. Thank you for the opportunity, sir. I wanted to ask you that your capitalized development costs have nearly doubled from INR 30 crores in H1 to INR 56 crores in H2 FY 2026. Sir, doesn't this make free cash flow a more meaningful metric to track our true earnings power?
Hi, thank-
Other than CFO.
Thank you. Thank you for your question. Ultimately we are a tech company, right? There is capitalization that has to be done. As we are investing more and more in tech, we are also capitalizing some of that. Just to clarify, we capitalize only those costs which are related to new product development. Any maintenance work is not capitalized. All the matrices are there for all of us to track, and, you know, we can always optimize on, you know, operating cash flow, free cash flow.
We are continuously focused on improving those matrices. As long as, you know, we are able to move in the right direction, we believe, sooner than later, we'll be able to, you know, sort of meet the market expectations and go beyond that for all these metrics.
Okay. My second question is that our Propel margins have declined from 10%- 4%. Like 10% in Q4 FY 2025- 4% in Q4 FY 2026. Sir, didn't we achieve the overriding commission this quarter? Like, what was the reason for this fall?
See, I think the right metric is to look at about 6% that we did for the year last time. Some of the margins have come down because we've also explained previously that we have been very focused on the cash flow. Some of the models, like the redemption model on Propel points, do take a lot of our cash flows, absorb a lot of cash. We have started to move away from those models. That has consequently meant that, you know, we have had to sacrifice in the interim some margins. We believe we are gonna be able to come back to around 5.5% margins in the coming years while we improve on the cash flow.
Okay. Yeah. Thank you.
Thank you. Next question is from the line of Rohan Mandora from Equirus Securities. Please go ahead.
Good evening, sir. Thanks for the opportunity, and congrats on good set of numbers. This is with respect to your guidance for next year on the standalone business, where we are guiding for 25%-30% growth. This year we have delivered around 42% growth. Is there any business where we are trying to go slow next year for guiding 25%-30%? Just want to understand that.
Thanks. Thanks, Rohan, for your question and kind words. Rohan, as you are aware, the base has grown significantly from the time when we were, you know, going IPO, where the revenues was INR 373 crores, you'll remember. Today, on a standalone basis, we are at INR 1,852, and the console is INR 1,907, right? So it's the base itself has grown, you know, almost 5x, 6x, right? Consequently, obviously, the percentage growth would come down. The other point also is, as I mentioned in the previous questions, our focus is cash flow improvement.
If that means that some of the Propel points, you know, growth comes down a little bit, we are open to that as long as it's, you know, helping us on the cash flow. There also now we've crossed INR 1,000 crores in terms of volume, so it's a sizable volume. Any growth there would be very meaningful because you're talking about a high base.
Sure. Sir, secondly, if you look at the trade receivables, they have gone up from INR 40 crores to INR 129 crores year-on-year. If you can explain what has happened here and , if you can, give the split of receivables between the three businesses, PayU, Propel, Zoyer.
Rohan Mandora, we don't generally give the split because there's a lot of cross-sell that happens; you're aware of it. The same customer might, you know, end up having a payable on their books, which is a receivable for us across products, right? Again, the thing that I wanna highlight is we were at about INR 33 crore-INR 34 crore negative at end of September. From there, our goal was to at least come to a break -even. We are close to break- even. We are at INR 6 crore. You know, that has been the focus while the trade receivables is one of the levers.
You know, if you look at it as a percentage of our revenue from end of Q2, it is more or less remained, and we'll try and improve on that in the coming quarters.
Sure, sir. Lastly, the INR 6-7 crores of cash, free cash from operations that you are talking about on a standalone basis. On a consol, that is almost INR 52- crores . What's the difference, like, what's happening in the other part of the businesses that is leading to the high negative cash flow?
Many of these other businesses are nascent businesses, right, Rohan? Which, you know, we've just taken over those businesses. We will obviously bring in much more efficiency and streamline the operations in the coming quarters. Also, we have had to, you know, make some investments in some of those businesses. As we go along in the coming quarters, you know, we'll be able to streamline the cash flows in those businesses as well.
Sure, sir. Thanks.
Okay.
Thank you. Next question is from the line of Ankush Agrawal from Surge Capital . Please go ahead.
Yeah, hi. Thank you for taking this question. Firstly, this difference in revenue growth that you're targeting between the consolidated and standalone is about 10-15%. Which recent acquisition will drive this 10-15% delta in revenue growth, if you can highlight it?
It's not gonna be a single acquisition, sir. It's going to be all engines firing. Obviously some of these businesses will probably grow faster. Right now, you know, Greenedge is growing very, very well. And we expect Zag.money also to pick up a lot of pace. There, of course, the lead would be with the card outs and card activations, and then the revenues follow in terms of spends. That's the typical pattern of a card portfolio, retail card portfolio. And of course, we'll see, you know, a marked improvement this year in Tax Spanner as well.
Okay. Okay. The consumer credit card business, that is, that will get a reference fee, what you're saying, and then a share of NB on spends fee, right?
Correct. Share of interchange and.
Yes.
reference fees from the banks. We take no balance sheet risk.
Right. The second question is around the expenses that have come down both quarter-on-quarter and even YoY; if I see, the expense is around INR 24 crores versus INR 28 crores last year. On the employee front, CI initiative is one the CFO highlighted, but other than that also, I think quite a sharp reduction in overall cost base versus past many few quarters, wherein the cost base was growing quite fast. Trying to understand if you can talk a bit more about what is happening over here and how do you see this cost base going into the coming year?
We are obviously trying to optimize. We are trying to save every penny, to be very honest and open. Having said that, I also want to highlight that, you know, as we've acquired the Dice Enterprises corporate portfolio, it's an asset purchase with about 100+ Dice Enterprises team members coming on board. Some of these employee costs and other costs are in the next quarter . We just want to highlight that. Our effort to be able to bring in more efficiency and optimization, not just in Zaggle but across the group, is continuous.
Okay. Like, with this Dice acquisition, are we going back on our earlier sort of guidance within, say, around 11%,- 12% kind of margins are expected in the coming years, versus 10% this year? I think 100 bps is what was sort of the guidance that every year 100 bps sort of margin expansion we could expect.
See, you're right on Dice. Our original plan was to have a 100% share acquisition, so it would be a subsidiary. Now the structure has changed to an asset purchase, and that means that that cost comes onto the Zaggle as a company, right?
It's a much more efficient structure if you look at the price, which was earlier INR 123+ crores today- INR 68 crores. It's a very significant improvement in terms of the cost per se for us. It does mean that, you know, this money, this cost, comes onto our P&L as a standalone as well as consolidated. Consolidated, in any case, that cost would have come, right?
Right.
We'll come back with the EBITDA guidance in the next few months, you know, once we are able to complete the integration process.
Okay. Got it. Lastly, any update on any other M&A that you are pursuing that might be on advanced stages, the larger ones?
Look, we will update you, sir, as we make progress and we hit some milestones. We will keep you posted. Thank you.
Okay. Okay. That was all. Thanks.
Thank you. Next question is from the line of Siva from ithought PMS. Please go ahead.
Hi, sir. Good evening. My question is regarding the cashback and incentives metrics. We are roughly at around 68% right now, and I think previous call we had guided for around 50% over the span of next 4-5 years. How are we planning to do this? Like, will there be any impact on our customer usage or retention if we're going to reduce this cashback and incentive?
Good evening, sir. Thank you for your question. I think, you know, as we have seen in a variety of businesses, as habits get formed, both on a consumer and a corporate side, ability to levy additional fees and to take, you know, scale backs, cash backs, et cetera, is a very common phenomenon. I mean, just go back to the original initial years of e-commerce in India or even, you know, your food delivery, et cetera, versus where it is today, and travel being a great example where all of us are paying happily convenience fees to various OTAs. We believe spend management is a growing category. We've spoken of this umpteen number of times, that, you know, 30 years ago, ERPs were unknown or lesser known.
20 years ago, it was HRMS. 10 years ago, it was CRM in India. We believe in 10 years' time, spend management will be a very established category, at least with the CFOs of corporates and in the ecosystem. With that, you know, coming in the coming years, we believe the cashbacks will automatically come down.
Right, sir. Sir, this cashback and incentive, we're giving it for both, I mean, all three: prepaid cards, Propel, and credit cards, right?
Sir, it's largely for credit cards and prepaid cards. On Propel points per se, we don't necessarily give any cashbacks as such.
Right. Again, for prepaid cards, like, why would we want to give out a cashback, sir? If I'm using my prepaid card, I'll be wanting to finish off the balance either way, right? Why would you incentivize them to finish off the balance?
Sir, you're absolutely right. We don't want to give any incentive or cashback on prepaid and, you know, credit . You know, absolutely, we don't want to, consumer behavior is such that they've got habituated to a certain degree of cash back, you know, starting with the wallet business. Everybody has that. Let me rephrase that. There is a certain set of consumers who transact basis, you know, on the cashback coming through. For those select customers, we still give some cash back. Believe you me, we don't want to give that cash back. It's just the nature of the industry that exists today. As the base of our customers, both on the corporate and the consumer side, grows, we will start dialing down these cashbacks.
Sure, sir. Thanks for explaining. Yeah. My next question is regarding our GTV. How much of our GTV is being contributed by, say, Zoyer, SAVE, and Propel?
Great question. It's a tricky one because there are many customers where they are taking both Zoyer and SAVE. Many cards are used for both, you know, modules or both products, and then there are sub-modules inside. It's very hard for us to bifurcate, you know, the GTV. Generally we don't, you know. That's why we don't publish the GTV in that sense. The metric that we focus on is the program fees in this case.
All right, sir. What I was thinking was that, Zoyer, it deals with vendor payments; it kind of, you know, engulfs it. The payment value is higher compared to Save or Propel. Could we assume that Zoyer is, like, 50% or greater than the other two segments?
Zoyer is growing very well. It started off when we did our IPO in September 2023, there were 0 revenues from Zoyer. From there, it's really taken off in a very big way. We see that to be a very big drivers of growth in the coming years for our business, sir.
Right. One last question. We're planning to acquire Dice now. I think, Dice, it's entirely SaaS revenue for them till now. Once we finish our acquisition, are we planning to cross-sell our credit cards with them? If we're planning to do that, how much of incremental GTV can we expect from Dice's existing client base?
Sir, we signed the three contracts of IP purchase and asset purchase agreements today. The Dice, you know, deal has now moved from 100% acquisition of the shares to an asset purchase and IP purchase agreements. That has been, you know, completed today. The definitive documents are signed. Yes, to your larger question, absolutely, we look to cross-sell payments, whether it's corporate credit cards, whether it's prepaid cards, or whether it's QR payments onto that base. Little early for us to come back to you with specific numbers as to how much we'll be able to get in terms of revenues in the coming years.
If you do a like -for-like in terms of what the Zaggle SaaS revenue is and what the program fees are and what the Dice SaaS revenue is, you can, you know, do a simple calculation and estimate what's the potential of program fees coming in from there.
Sure, sir. Yeah. Thank you. That's it from my side.
Thank you. Next question is from the line of Prakashal Jain from Lucky Investment Managers. Please go ahead.
Hello, sir. Thank you for the opportunity. My first question is, sir, this tech spend of about INR 107 crores that you have capitalized, is it fair to assume that this is mostly manpower cost , or is there some expenditure on tech infrastructure as well in this?
Sir, it's a combination. A lot of it is manpower. As I clarified in the previous call as well, we capitalize our new product development, not our ongoing maintenance. Largely it is people's cost.
Okay. How much do we plan to spend in a similar way next year and the year after that?
It's difficult to give a specific estimate on a cost line item. But this is a phase with AI coming in where, you know, there is a certain amount of investment that we will need to do to build a product which we'll be able to take not just in the Indian markets but in global markets, right? And then if you look at the kind of investments that the global players make, you know, on tech and product, we are a fraction of that cost, an absolute fraction of a fraction of that cost. We will invest prudently. We will invest wisely while protecting our margins and our cash flows.
That investment is critical for building market leadership, you know, in other markets and to grow the market leadership that we have in India.
Fair to assume that expenditure would continue at a similar rate for the next two or three years?
Difficult to give specifics, sir. I don't want to get tied down.
A ball pass is fine, sir.
Please let me, let me not tie myself into any knots here by giving you any specifics, sir.
No problem. Sir, my next question pertains to a couple of balance sheet items. One is, why has this INR 40-50 crore short-term borrowing come up, despite us already having cash?
This is, basically, to be able to quickly deploy the capital and, you know, grow the business. This is a short-term borrowing that we sometimes need to do to be able to drive traction. That's the whole thing. It's very short-term in nature.
Understood. Okay. There is a some INR 10 crore loan given to others. What is that?
10 crore loan to others? Are you talking of the loan that we gave to Dice? Yeah, that should be the one, sir. We gave a loan to the company to keep it functional, and that has been adjusted, you know, completely against the 68 crore payout.
Okay. Okay, got it. All right. Thank you for the answers, sir. All the best.
Thank you.
Thank you. Next question is from the line of Akshat Mehta from Seven Rivers Holding. Please go ahead.
Hello. Am I audible?
Yes. Yes, sir.
Yes, sir.
Yes, sir. I just wanted to ask you others your top three products except for SAVE, Propel, and Zoyer; you know, the other products, fleet management and your Forex solutions, you know, sir, how are they doing?
Those are products which are doing very well. They will start generating revenue in the coming quarters. Some of these products, like Fleet, are already generating some revenue. We have some very good customers like Adani. We have THINK Gas and AG&P Pratham, that is, and many others in the CGD side. We are hopeful that we'll crack some OMCs, oil marketing companies, in the coming quarters. Coming to the international payments as well, we are seeing some traction there. As you would agree, a lot of these businesses being B2B in nature have gestation periods. It's very hard to crack into IOCL, HPCL, or BPCL. There is some business that we do with some of them, but sizable would take some time.
Similarly, ZatiX is a high -margin business. It's a straight, pure software business for card analytics, and that's all bottom-line income. As that business grows in the coming years, it'll add a lot to our bottom line, very little to the top line, per se, but it's straight bottom-line income, very similar to SaaS. It is like SaaS income. There also we'll see traction in the coming quarters.
Thanks, sir. My second question is on the, you know, the Middle East expansion that we are doing. Can you just help us, you know, elaborate on what the exact roadmap strategy is to go there? You know, where are we going to expand? What are we going to even kind of offer first, et cetera?
On a lighter note, if we knew that, then, you know, we would have been, you know, very, very happy. You know, it's a very volatile situation, as you would agree. Every day we hear, you know, a different piece of news. What we are doing is we are continuing to engage with, you know, all the stakeholders in that region virtually. That's also a region or a market which requires a fair degree of in-person engagement. It's a relationship-based market much more than many others. As you would agree, relationships are built by spending time in person, much better than virtually.
We are just keeping the conversation going and the relationships warm and as soon as the war or war-like situation finishes, we would want to spend significant time there in those markets to be able to start getting traction. Those conversations are ongoing, but to be able to close anything substantial in terms of a partnership, it would require us to spend some time in the market.
Currently we don't have any on-ground presence there?
Currently, we don't have any on-ground presence. You're absolutely right. Through the APA that we did with Dice, we get some basic contracts with some customers and some ongoing conversations. Again, that's pretty nascent
Okay. Thank you, sir.
Thank you. Participants, please limit your questions to two per participant. Should have a follow-up question, we request you to rejoin the question queue. Next question is from the line of Kiran Gadge from Knightstone Capital Management LLP. Please go ahead.
Hi, good evening. Could you please split the other current asset between prepaid cards and vouchers for FY 2026?
Sorry, I didn't get that question, sir.
Could you please split the other current asset between prepaid cards and vouchers for FY 2026?
There are multiple line items in the other current assets; wouldn't want to go into specific line items on this call. That's the information that the company publishes.
No, I mean, because it's major items, prepaid cards and vouchers. If you could give a sense, how much was it for this year?
As I said, sir, it's not just these two line items. There are multiple line items in other current assets, and we generally don't give a break-up or specifics on that, and that's the stand that we maintain per se.
Okay. What sort of revenue can we expect from fleet management in the future?
Sir, you are aware of the kind of customers that we are chasing there. It's a high -concentration customer with large volumes in terms of spending. I took the names of the OMCs already. As and when we are able to crack those contracts, we will share with you specifics as to what the estimates are, if those estimates are, you know, quantified and contracted and committed by the OMCs.
Okay. Thank you.
Thank you. Next question is from the line of Akhil Gulecha from Hornbill Capital. Please go ahead.
Hi, Avinash. My question is on the Propel business. We generate roughly INR 45 crores of net revenue and over INR 1,000+ crore of gross revenue. I just want to understand why is this business exists. Because it feels like the problem is cash flow. To generate INR 45 crores of net revenue, the hundreds of crores of our working capital is stuck in our balance sheet. This seems like the easiest way to generate cash flow. It doesn't feel like you're generating enough ROE or ROCE on this business.
I don't necessarily agree that it's INR hundreds of crores per se stuck through the years, sir. Your point is well taken. That's the reason why we are trying to optimize on this business. This business is also a feeder business for our larger business. It brings in a lot of stickiness. It brings in opportunity for us to cross-sell, up-sell significantly. There are lots of benefits that the business brings. Also please recognize that 90% of the spends that happen on Propel happen on a prepaid card, and that revenue sits under program fees, right? It's the 10% that gets redeemed on vouchers that gets classified separately as Propel points revenue as per Ind AS.
The overall Propel business is an extremely valuable business and an extremely cash-generating business for us over the years. It's gonna be. We are focused on optimizing on cash flow, and that's why we have, you know, taken some steps this quarter as well.
Understood. Understood. I understand the cross-selling part, and I think that has given us a lot of advantages. The suggestion was because as an investor it feels like program fees is the juicy part of the business where you generate great amounts of cash every year, and all of that is getting stuck in those prepaid cards, loading the balance sheet. Put the suggestion that if you could just focus on that and start generating positive cash flows, Wall Street might look at our business differently.
Point well taken, sir. Just to clarify, program fees is income generated as interchange and any incentives we get from networks for both prepaid network cards as well as credit cards, right? Propel platform generates revenue both through prepaid network cards in the form of program fees, as well as, you know, Propel points, which is redemptions that happen of those points on vouchers of over 300, 350 brands. It's a complex business. It has many layers and levers . Overall, yes, we sort of are seeing the need to be able to focus on the cash flow and the ROC, ROCE. Point well taken. We are working on those lines too, without impacting the business and impacting the relationships. How do we optimize on these matrices or these levers?
Got it. Got it. Thank you so much, Avinash, and best of luck for next year. Hopefully, we'll see a large part of our PAT converted to operating cash flow next year.
Thank you.
Thank you. Next question is from the line of Jash Shah from OHM Portfolio Equity Research. Please go ahead.
Thanks for the opportunity. Avinash, I have a couple of questions. First of all, on the overall EBITDA guidance, which has not been given. What is the impact because of Dice? Because I see revenues of Dice only at INR 10 crores, so expenses can't be too much. Would it be fair to say that the fourth -quarter run rate or annual run rate will be maintained and any upside is something that you are not able to guide us on in the guidance?
Thank you for your question. The impact of Dice on a consolidated basis is, you know, probably nothing different from what was originally envisaged when we signed the term sheet. If at all it's better now. What's happened is because the nature of the contract has moved from a share purchase agreement, a 100% acquisition, to an APA, an asset purchase agreement. The costs have come directly on the standalone entity. The INR 10 crores is also the FY 2025 number. The FY 2026 numbers are significantly higher. Those contracts are all with us. All the revenue -generating contracts are with Zaggle as well as the pipeline of customers.
Having said that, it's too premature for us to talk of how much the margins will change, you know, right now because end of the day we are also integrating , and, as Rajesh also mentioned giving top priority to cash flows, followed by growth and then followed by margin expansion in EBITDA.
No, I understand that. My simple question is, is Dice basically a loss-making at the net level that could impact your run rate of whatever INR 55 crore of EBITDA that you have every quarter? Would the next two quarters actually see a meaningful reduction?
Dice was a loss-making company in FY 2025 and likely to be losing a loss-making company for FY 2026.
I see. Having said that, we obviously would try and optimize there and make sure that we are able to, you know, leverage it in such a way that we are able to extract profits in the coming years.
Right. Again, my-- This is, this drives to my basic question that you have ramped up the business 6 x from FY 2022 onwards. Whatever you have gained in terms of, say, operating leverage, you have lost out more on the gross margin, which is the other way to say on the take rates or whatever. It's like growth is coming at incrementally lower margins, and now your growth rate is also moderating. Is that a challenge, given the focus now on cash flows, that margins can actually see further downside, which actually means that your 11%-14% medium-term guidance actually gets postponed due to Dice and the overall moderation in growth rates?
Sir, our overall guidance of 14%-15% over the course of next five years remains. But in the interim, of course, the ramp -up, which we would have otherwise seen probably close to a percentage point every year, that might go through some temporary variation. Overall, we see the margin expansion to be there over the course of the next five years. You're right, but, you know, with the world changing so much and AI coming in, there is huge opportunity also getting created, and we would want to further consolidate our market leadership in the spend management space.
If you look at it where we were in FY 2022 or 2023 in terms of spend management, where there were multiple other players who would, you know, stake claim that they also had some sort of meaningful presence in spend management to today where the clear market leadership sits with Zaggle. I think it's a very important thing for us to be able to consolidate on that. Please also appreciate that in the coming years as we go to the global markets, while initially there will be some investment required, eventually those markets generate much higher margins, whether it's the Middle East or even the U.S. The margin expansion would also kick in from those actions.
Potentially we've still not shut door on other acquisitions, so we will keep looking at good opportunities which might help us expand our margins as well.
Good.
Okay.
Yeah. Thank you very much.
Thank you.
Thank you. Due to time constraints, that was the last question of the day. I now hand the conference over to management for closing comments.
Thank you all for participating in today's call. We hope we have addressed all your queries and provided valuable insights. We remain optimistic and focused on the future growth of the company, and we are excited about the opportunities ahead. For any further information, we request you to get in touch with SGA, our investor relations advisor. Thank you and have a nice day.
Thank you. On behalf of the Zaggle Prepaid Ocean Services Limited, that conclude this conference. Thank you for joining us, and you may now disconnect your lines.