Ashish Kacholia-backed Zaggle Prepaid Ocean shares tumble 19% in 2 days after Q3 results
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Synopsis
Shares of Zaggle Prepaid Ocean Services dropped 10% after its Q3 earnings report, despite a 29.6% YoY rise in profit to Rs 19.7 crore. The company’s revenue surged 68.8% YoY, but expenses rose sharply. Zaggle also announced a stake acquisition in Mobileware and a restructuring move with **
Shares of Zaggle Prepaid Ocean Services, backed by ace investor Ashish Kacholia, tumbled 10% to hit the lower circuit at Rs 381.9 on the BSE on Tuesday, extending their sharp decline following the company's Q3 earnings report on Friday. The stock has now lost nearly 19% in the last two trading sessions.
Zaggle's total expenses jumped 71.59% YoY to Rs 314.14 crore in the October-December quarter, reflecting a 12% rise from the second quarter. Higher point redemption expenses and incentives contributed to the increase, offsetting the revenue growth. Employee benefit costs, however, fell 4.46% sequentially to Rs 17.1 crore, though they remained 53.36% higher on a YoY basis.
Meanwhile, in a regulatory filing on February 11, the company announced that its board had approved the acquisition of a 16.67% stake in Mobileware from its promoters. The transaction is expected to close within 90 days, with no payments made yet for the stake.
Separately, the fintech and SaaS company also announced a corporate restructuring move, acquiring a 53.32% stake in Span Across IT Solutions, transitioning it from an associate entity to a subsidiary.
Zaggle’s shares closed at Rs 471.4 on Friday, down 3%. The company posted its third-quarter results after market hours on Friday. The stock has gained 41.6% in the past year and 6% over the last six months, but recent volatility has led to a 15% drop in just one week.
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As per Trendlyne data, the average target price of the stock is Rs 635, indicating an upside potential of over 66% from the current market price. The consensus recommendation from two analysts for the stock is a 'strong buy.'
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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The company reported a 29.6% year-on-year (YoY) rise in consolidated profit after tax (PAT) to Rs 19.7 crore for the third quarter ended December 2024, while Zaggle saw a 2.47% sequential dip in PAT. The company's revenue from operations surged 68.8% YoY to Rs 336.8 crore for the third quarter, also posting an 11.3% quarter-on-quarter (QoQ) growth.Zaggle's total expenses jumped 71.59% YoY to Rs 314.14 crore in the October-December quarter, reflecting a 12% rise from the second quarter. Higher point redemption expenses and incentives contributed to the increase, offsetting the revenue growth. Employee benefit costs, however, fell 4.46% sequentially to Rs 17.1 crore, though they remained 53.36% higher on a YoY basis.
Meanwhile, in a regulatory filing on February 11, the company announced that its board had approved the acquisition of a 16.67% stake in Mobileware from its promoters. The transaction is expected to close within 90 days, with no payments made yet for the stake.
Separately, the fintech and SaaS company also announced a corporate restructuring move, acquiring a 53.32% stake in Span Across IT Solutions, transitioning it from an associate entity to a subsidiary.
Zaggle’s shares closed at Rs 471.4 on Friday, down 3%. The company posted its third-quarter results after market hours on Friday. The stock has gained 41.6% in the past year and 6% over the last six months, but recent volatility has led to a 15% drop in just one week.
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