Zaggle Prepaid Ocean Services Limited (ZAGGLE.BO) Q2 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Zaggle Prepaid Ocean Services Limited Q2 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements do not guarantee the future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Dr. Raj Narayanam, Founder and Executive Chairman, for opening remarks. Thank you, and over to you, sir.

Thank you. A very good evening to everyone. Thank you for joining the earnings call for Zaggle Prepaid Ocean Services Limited for Q2 and H1 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; Mr. Aditya Kumar, our CFO; and SGA, our Investor Relations Advisor. The financial results, press release and investor presentation are uploaded on the stock exchange and on the company website. I hope everybody has had a chance to look at it. This quarter marks our best ever half yearly and quarterly performance marked by strong progress and continued innovation across our businesses. Talking about the quarterly performance comparing Q2 FY '26 to Q2 of FY '25, the company reported the revenue at INR 431 crores, growing at around 42% on a year-on-year basis. Our adjusted EBITDA increased to INR 44 crores, growing at about 48% on a Y-o-Y basis. The PAT surged to INR 33 crores, growing significantly at around 79% on a year-on-year basis. If we look at half yearly numbers, comparing H1 FY '26 to H1 FY '25, the company reported revenues at around INR 762 crores, growing at around 37% Y-o-Y. Our adjusted EBITDA stood at around INR 77 crores, a 39% Y-o-Y increase. PAT surged to INR 59 crores, growing significantly at about 68%. Now I would like to give an update on our acquisition investment so far. Our existing acquisitions and investments continue to perform extremely well. Mobileware, now rebranded as 86400 has generated a revenue of around INR 24 crores in Q2 FY '26 with an EBITDA of around INR 7 crores and a PAT of around INR 4.8 crores. This is against a revenue of INR 33 crores in the entire FY '25. Mobileware has also partnered with Suryoday, Vegapay for a successful launch of the credit line on UPI product. For TaxSpanner, I am happy to share that we have signed up one of the largest private sector staffing companies for tax filings for their gig workers, leveraging the ZUGS, which is Zaggle Unified Gig Worker Savings platform as we continue to onboard marquee corporates for TDS and GST modules across platforms. We have also strengthened our presence in HCL, one of our key accounts by upselling our TDS reconciliation module. Now I would like to give an update on the ongoing acquisitions. We have made a significant progress on these as committed earlier in the AGM. For GreenEdge, I'm happy to announce that we have completed the signing of the transaction documents. We should sign these transaction documents for the 2 out of the remaining 3 acquisitions, which are already announced, which should be done very, very quickly. In addition to this, we are at advanced stage of evaluation and commercial discussions with a set of targets. But I also want to inform you that we have already started working as a team with these 3 acquisitions, which we had announced, closely working with them on multiple projects as well as multiple accounts. We will keep you updated on the progress over the coming quarters. We have one thing which we wanted to make it very clear is that while there is pressure internally, externally to do some large acquisitions, we want to make sure that we do the right acquisition, acquisition, which has some where there is some color or some paint we want to stay away from. And in some of our earlier announcements, we have looked at it, we have looked at them. And in the diligence process, something has come up which we have not liked. We have abandoned one of those large acquisitions because we did not feel that it is the right acquisition for the company. Along with this, I would also want to inform that we are preparing to expand globally with a focus on the MENA and the U.S. markets, positioning the company for global scale and diversification. As a part of this expansion plan, we are -- we will be setting up an office in GIFT City, giving us easier access to the international markets to cater a holistic cross-border spend management solution and follow it up with an office in MENA region in the next few weeks. Now I would like to give you a few updates on the business. At the Global Fintech Fest 2025, we launched 2 innovative products to further enhance our comprehensive payment suite, each strengthening our dedication to delivering intelligent, secure, and customer-focused spend management solutions. First, the Zaggle Global Pay Forex card is a co-branded partnership with Global Pay, earlier Wall Street Forex to streamline Forex spending for businesses and global travelers, offering greater control, enhanced security and intelligent automation. The second, a prepaid card in partnership with Mastercard and NSDL designed to simplify channel partner payouts in tandem with our Propel offering. Now coming to the most exciting update of all, we have entered into a retail co-branded partnership with AU Bank. This further solidifies our position in the retail co-branded credit card segment in addition to our acquisition of Rio, which already has been an ongoing partnership with Yes Bank. While we built scale with AU and Yes Bank, we are actively seeking to add 2 to 3 more banks on the retail co-brand side as we look to deliver a strong value proposition to our user base. What we think is that with an estimated INR 500 crores to INR 600 crores of revenue and EBITDA of about INR 50 crores to INR 60 crores over the next 4 to 5 years, this will be a completely new line of business, of which today, the contribution out of this line of business is 0. So this will be a great addition to our ever-growing top line and bottom line. Across all these developments, one theme remains consistent, our focus on building a strong ecosystem rather than stand-alone products and platform. The strength of our partnership, the speed of our innovation, including the AI initiative and the breadth of our global ambition are driving us towards the next phase of transformation. With deep roots in India and a vision that spans across markets, we are bringing together technology, innovation, and collaboration to create enduring value. Lastly, the company recently issued warrants at INR 567 per share to Bennett Coleman & Company Limited. This is a brand equity transaction, giving us access to marquee media brands such as Times of India, Economic Times, et cetera. Very pleased to announce that the promoter entity, RAN Ventures, which is the short form for Raj Narayanam Ventures, has also subscribed warrants at the rate of INR 567 per share, which they think that is a very appropriate price. In light of our strong performance and the momentum we are witnessing across our business segments, we recently upped our revenue guidance to 40% to 45%. Our EBITDA guidance continues to remain in the range of 10% to 11%. Now with this, I would like now to hand over to our CEO, Mr. Avinash Godkhindi, to take you through the business and operational highlights in more detail. Thank you. Over to you, Avinash.

Thank you, Dr. Raj, for your comments. A very warm welcome to everyone joining us on the call today. I'm very happy to share that today, around 3.5 million users use the Zaggle powered cards and software, a strong testament to the scale and adoption of our platform. We now serve more than 3,600 customers across a wide spectrum of industries and sectors. During this quarter, our SaaS platform fees contributed to around INR 10.5 crores. Our program fees contributed to around INR 174 crores, and our Propel points revenue contributed to around INR 247 crores. While our current businesses are doing extremely well, some of our new businesses are also shaping up very well. I'm happy to share that we signed up with Adani Total Gas and Megha Gas for our fleet management solutions. Adani Total Gas is India's largest CGD company, encompassing 53 geographical areas, operating around 700 CNG stations. Megha Gas is a fast-growing CGD company covering 22 geographical areas across 62 districts in 10 states, operating around 200 CNG stations. We will be providing fleet loyalty module as well as the rewards module for their incentives for both these accounts. During this period, we also signed up several marquee clients, including SMC Global, Pernod Ricard, UltraTech Cements, DTDC Express, Suryoday Small Finance Bank, Nuziveedu Seeds, amongst others. To provide a brief overview of one of our clients, our client was dealing with an entirely manual process on the procure-to-pay side. The client was facing multiple challenges on managing data sets originating from multiple ERP systems. Along with a complex hierarchical approval process leading to a very high turnaround time for even simple orders that were placed. We addressed these issues by deploying our Zoyer platform, which streamlined the complex approval process into an automated AI-driven policy layer, along with giving them an entirely digital procure-to-pay journey, reducing the order TAT and reinforcing compliance through our digital platform. Another one of our clients, a leading agricultural company, was facing the challenge of creating a reward incentive structure across the 10,000-plus retailers in a highly fragmented sales chain. We addressed these issues by deploying the Propel platform, which brought these retailers onto a single platform, which further digitized, automated, and streamlined the incentivization and redemption process. As we advance our platform-based strategy, we expect accelerated growth driven not only from our strong pipeline of new clients, but also from continued cross-sell success. In Q2 2026, we further strengthened this momentum by expanding our cross-sell wins across a wider client base, including Bharat Dynamics Limited, Apollo Health, Siyaram Silk, OfBusiness, amongst others. I'll take an opportunity to elaborate on a few of these. Apollo Health is an existing customer of the Propel solution. We recognize the potential to further collaborate and successfully offered our Save and Zoyer platform solutions. The Save offering is to help Apollo Health streamline employee expenses across board. Zoyer, we offered the BROME module, which will streamline their spends across their retail outlets as well as the procure-to-pay platform to manage spend centrally. OfBusiness Group, Oxyzo Financial Services, and OFB Tech is an existing customer of our Safe solution. We have identified an opportunity to strengthen our partnership by implementing the Zoyer solution to drive greater efficiency in their procurement process. Now I'd like to give an overview of our partnerships and the progress we are making. Very happy to share that we have onboarded and partnered with 3 banks, AU Bank, Standard Chartered Bank, and IDFC Bank. Our banking partners now stand at 19. As Dr. Raj has already spoken earlier about the retail co-brand partnership with AU, I'd like to add that we also have partnered with the AU Bank for corporate credit cards as well as co-branded prepaid cards to be provided to our customer base, establishing a truly strategic alliance that we are committed to leveraging and scaling it further. We have also entered into a strategic partnership with IDFC First Bank. IDFC will take the Zaggle spend management suite of solutions to their extensive corporate base, while we aim to leverage the IDFC First Forex solutions and offer it to our customer base. Similarly, we entered into a partnership with Standard Chartered Bank, our third major international bank partnership after HSBC and DBS, where we aim to introduce our spend management suite to their existing corporate customers. Lastly, we further recognized -- further strengthened our partnership with Mastercard by signing a 5-year customer business agreement for co-branded domestic prepaid card, which offers launch and spend linked incentives to Zaggle. I'll now touch upon brand and recognition. I'm happy to announce that we have onboarded Mr. Ayush Mhatre as our new brand ambassador. Ayush, as you would know, is the captain of the India under 19 cricket team, an India A player as well as representing Chennai Super Kings in the IPL and Mumbai in the Ranjit Trophy and other first-class teams. I'm extremely proud to share that Zaggle has been -- also I want to touch upon what we have done in terms of recognition. Very happy to share that we have been awarded multiple industry recognitions this quarter. Some of them are FinTech Disruptor Award and Best Use of Content Marketing by FINIXX, Best team projects in Fintech category at the India DevOps Show 2025. I'd also like to take this opportunity to congratulate Dr. Raj for winning the MSME Leader of the Year at the Bharat Digital Excellence Awards 2025. With this, now I hand over to our CFO, Aditya, to take you through a financial update. Thank you.

Thank you, Avinash, and a very warm welcome to everyone on this call. I'm delighted to report that the company has delivered strong performance with the highest ever quarterly and half yearly revenue and significant margin expansion. In Q2 FY '26, the company reported record revenue of INR 431 crores, up by 42.4% on Y-o-Y basis. This was on the back of strong growth across our all revenue lines, program fee, Propel point, and SaaS fee. The substantial increase in the incentive and cash back is in line with the business growth. Employee expenses and other expenses increased to support business operations. ESOP cost side declined due to forfeiture of few shares. Our adjusted EBITDA grew by 48.1% to INR 44 crores in the quarter compared to INR 30 crores in the same period last year. Our PAT reported INR 33 crores compared to INR 19 crores in the previous year. Our cash PAT, which includes net profit, depreciation, and ESOP expenses has surged by an impressive 70% Y-o-Y to INR 40 crores, the highest ever. For H1 FY '26, our revenue from operations surged 37.4% Y-o-Y to INR 762 crores. Our adjusted EBITDA has increased 38.8% to INR 76 crores. Notably, our cash PAT surged to 63.9% to INR 75 crores. As of 30th September '25, our cash balances is around INR 573 crores. Our operating cash flow before taxes stands at a negative INR 19 crores for H1 FY '26. We are actively taking measures to normalize this, and it is expected to stabilize in the upcoming periods. With that, I would like to conclude my update, and we are happy to open the floor for questions. Thank you.

[Operator Instructions] The first question comes from the line of Sachin Dixit from JM Financial.

Congratulations on a great set of results. I had 3 questions. The first one is where we'd love to understand the ramp-up that we are seeing in the newer products, right, especially in the existing customer base, [indiscernible] fleet management and sort of products, and how are those ramping up? If you can talk about any cross-sell sort of penetration that you have seen, what number of customers are adopting to these products, right? If you can give any sort of customer level visibility on this, that will be helpful.

Yes, yes, Sachin. So we've seen great momentum overall for cross-sell. We are seeing cross-sell momentum in BROME, which is our branch recurring operating monthly expenses. And there, we've seen tremendous traction. We are also now seeing great cross-sell opportunities emerge for our fleet programs. I spoke of what we are doing with Adani Total Gas, Megha Gas, a whole host of these opportunities are opening up. And the conversations are turning out to be a lot more holistic because we are solving deeper problems for our customers.

Any numbers around that, like if you can talk about or this is the sort of disclosure that we have for now?

So overall, look, Sachin, our cross-sell percentage around IPO was about 16%. And now we have upped it to about 21% and we are trying to increase penetration. So our cross-sell definition is a single customer taking more than 1 product. Now we are seeing a lot of customers are taking not just 2, but 3, 4 products. And that's again increasing our penetration in these companies. A lot of sales that is also happening to new customers is where a full bundle is being offered to the customer and not just a single product.

My second question is on program fees side, right? So program fees obviously was seeing relatively like more like mid-teens sort of a growth until last quarter, has picked up quite sharply this quarter. If you can talk about what drove this side, if there is any seasonality impact there? I also see incentives and cash backs have gone up quite sharply as a percentage of program fees revenue. So if you can give what is driving the faster growth in program fees? And how do you see it progressing further?

See the program fees growth quarter-on-quarter has grown a lot. It is going to continue to grow very strongly in the coming quarters. It's not so much about seasonality. Seasonality, of course, is there. But there's also the adoption of newer customers where we are cross-selling, upselling, and adding new customers, new use cases. We are seeing a lot of customers also broad-based their use cases from earlier, which used to be a lot around your marketing spends, et cetera. From there, it has broad-based to vendor payments, their tax payments. So we have broad-based it to a much more holistic OpEx sort of a play, and that is showing in the revenues. That is how I would describe it.

And should we be expecting this similar sort of growth rate in the coming quarters as well, Y-o-Y level growth rates?

Yes. The growth rates are going to pick up further in the coming quarters.

Finally, coming to our OCF, right, as also highlighted over the call as well, right? So while our cash PAT continues to grow very, very handsomely, our OCF has still dipped, right? If I look at your H1 last year versus this year, there is a sharp dip of almost like INR 33 crores on OCF side. What's driving this dip? If you can talk about -- I mean, you did mention that you are working on OCF, what will change for you to turn OCF and then finally FCF positive?

Basically, Sachin, if you look at it, right, the growth what we have anticipated in the current H1 despite the denominator is being very high. So that resulted on to the TR base a little bit on the recovery and huge deployment happened on the other asset side, considering the festive period, et cetera. So once this gets normalized in the upcoming quarters, we should be able to comfortably breakeven. So even right now, before taxes, if you see, that is only INR 19 crores. And possibly, we will get this sorted and end of this next year or so, we'll be able to generate the positive cash flows.

So you said next year or this year?

This year, we will break even and the OCF will be turning properly the cash flow generation. So just to add, as we have said, the festive season has a very significant impact on this, because ultimately we need to support our corporate customers during the Dussehra, Diwali season, right? And that is something which always has a certain impact, and that sort of also stabilizes in the coming weeks and months.

The next question comes from the line of [indiscernible] Advisors.

Hello, Avinash, congratulations on a great set of numbers. One question I keep asking every quarter, this time I will avoid that. Instead, let me ask, following up on the previous question on the cash flows. The other line item in your balance sheet that is inflating quickly is the intangible assets and the working capital and work in progress intangible assets, right? And that is increasing quite quickly, and I'm guessing that is also creating a stress on your cash flows. So #1, should we think about this as only manpower expense, which is basically your R&D expense? And #2, how is this going to trend going forward?

Intangible assets, one is the manpower definitely, along with this the external AI consultants, what we are appointing that includes these both comprises. And on the -- like I mentioned -- like Avinash has mentioned very clearly, this is onetime kind of expenditure which we have given. So as we said, we are working towards the normalizing the TR and other improvements, which should get sometime end of -- like I said, we will break even in this year and possibly next year, the operation cash will turn positive.

Sorry, I understand that you're saying it will turn positive next year. I'm trying to understand the intangible assets in particular, are they going to be going up going forward? Or are they now going to stabilize and you will start depreciating those intangible assets quickly faster now? Like how do we see that number going forward?

So as we said also, so significant of our investment is happening on the AI side to scale up on a global level product. So at least for next 1 more year, we will start have to invest on the AI and the other products in order to make it competitive at a global level. So then later that, obviously, that will get streamlined into normal depreciation, which is as per the company's policy, depending upon the 3 to 5 years then. So at least you see investment on the intangible assets for next 1 more year, end of FY '26.

The other question I have is in terms of understanding your revenue bifurcation. Currently, we still give our revenues in terms of program fees, Propel, and I forget the last one, but yes, the 3 levels. With all these new acquisitions coming in, where are we reporting their revenue? And this quarter's revenue that you have seen in program fees of whatever, 38%, how much of that is organic growth? And how much of that is from acquisitions and inorganic that is there in this quarter and wasn't there last year same quarter?

So I'll take the second part first. The growth that you're seeing is entirely organic, right? The impact of the acquisitions on the program fees is not yet visible. The overall philosophy for Zaggle would be that there are certain acquisitions where the revenue lines would fall under the SaaS piece like Dice. Other acquisitions would go into the Propel points like GreenEdge and others. And there will be others which will come into the program fees. So that's how we split it. We don't anticipate the breakup further expand. We have looked at these acquisitions as something that fits into 1 of these 3 buckets.

Right, Avinash. But for example, I think Raj sir mentioned earlier today that Mobileware is already contributing xx crores, I forget the number. That must be -- so that is an inorganic acquisition that is sitting in one of these line items, right?

No, no. So that is like -- that is not sitting in this alliance. This is just stand-alone numbers, which we have shown. So that will come in the consolidated. So basically, if you see Mobileware is another entity. So we will consolidate only the share of profit and not the entire P&L. So we have -- 10% of the stake in the Mobileware.

And lastly is that the other expenses, both this quarter and last quarter, we have like stabilized at around INR 20 crores, and that has been a massive fall from the INR 30 crore number. Is this number now a sustainable number? Is this already built in whatever marketing expenses we need to continue growing at this rate? Or is this currently crunched and in a couple of quarters, we might have to reinvest in marketing?

The marketing expense, especially with the retail card is going to increase in the short term. Just given the scale and size of opportunity there and how the retail card businesses are for banks and other issuers, we see that as a great opportunity. Partly the warrants issued to Bennett Coleman is also linked to this because we see that as a great support that comes in for us as we expand on the retail card business and our businesses across board.

[Operator Instructions] The next question comes from the line of Deepak Poddar from Sapphire Capital.

Many congratulations for a good set of numbers. Sir, just wanted to understand now you touched upon your acquisition planning. So you said about 2 of the 3 targets that will be signing document in the near term. So any time line we have set for this acquisition? And what is the tentative size? If you can throw some light on that, that would be very helpful.

So I think these are acquisitions that we are talking of, which we have already announced, right? So we have acquisitions that we have announced recently, which are yet to be closed are Rio.money, Dice, and Effiasoft. So we are talking about 2 of those getting closed very soon.

And what's the revenue size of these acquisitions?

The different companies have different revenue sizes. So Dice this year would probably be about INR 20 crores, INR 22 crores. So money is fairly small in terms of revenue because it's a B2C player on the retail card and TPAP side. And Effiasoft would be about INR 28 crores to INR 30 crores.

And all these are profitable companies?

No. Effiasoft is profitable, while Dice and Rio.money are in an investment growth phase.

And Rio.money is a very -- I mean, miniscule revenue kind of a thing, right?

Yes, it's fairly small.

And secondly, just wanted to understand on your margin trajectory, I mean, we are talking about 10% to 11% for this year, right? So if I have to like next 3 to 4 years, how should one look at your margin trajectory given the scale up you're talking about?

See, we've already given a guidance that in the next 5-odd years, we'll hit about 14% to 15% of adjusted EBITDA, right? That's something that we are sticking with.

What next 5 years you are mentioning?

Four to 5 years, we are looking at about 14% to 15%.

Next 4 to 5 years.

Yes.

And just a data point, you mentioned this retail card that you are tying up -- tied up with EU Small Finance Bank and looking for 2 or more, 3 banks tie up. So this segment can give you INR 500 crores of revenue with an EBITDA of INR 50 crores to INR 60 crores in the next 4 to 5 years cumulative. Would that be a right understanding?

Not cumulative. At the end of the fourth or the fifth year, you will be able to see about a revenue of INR 500 crores. Cumulatively, if you do, it could be about INR 1,200-odd crores, And EBITDA would be about INR 120-odd crores cumulatively. But stand-alone on that particular year in that line of business, we aim to hit about INR 500 crores with about INR 50 crores to INR 60 crores of EBITDA.

Per annum. So in next 5 years, maybe INR 500 crores of revenue with incremental INR 50 crores, INR 60 crores EBITDA can come from this segment right?

That's correct.

The next question comes from the line of Devesh from Antique Stock Broking.

Congratulations sir on a good set of numbers. The first question was on the acquisition side. You said these 3 acquisitions will be closed. So can you quantify how much of the cash that we have will be left after that? And are we planning additional acquisitions going ahead?

Yes. Thank you, Devesh, for the question. Yes, we roughly would have about INR 430 crores to INR 440 crores of money left after this acquisition. And we are looking at another maybe 2 to 3 acquisitions in the near future is how we are planning to do.

So this will be to expand the overall portfolio like we were doing previously?

Yes, absolutely. If you just look at our fleet management solution, which we started about a year, 1-1/2 years back and compare those 2 giants like Corpay as well as WEX, both of them are in -- their market cap is in billions of dollars. Okay. And India is a very burgeoning market in terms of fleet management, and we are making very, very good inroads into the fleet management. And as Avinash mentioned that we have done Adani Total Gas, Mahanagar Gas, like this, we are now expanding into the OMCs, which is the oil marketing companies like HPCL, BPCL, IOCL, et cetera. What we see is that over a period of time with our suite of products, with the underlying theme of software and payments, we are going to become a very, very significant player in the OMC space with the OMCs for fleet management. And accordingly, now if you see we have done the gas distribution business, we are like probably monopoly out there in terms of our software and our card getting used. Similarly, in the OMCs, we also feel that we'll be able to do a major, major leg up in the coming years. So on all fronts, while we are increasing our TAM, the total addressable market, we are also looking at expanding the product range. So that as the years go by, we should grow organically from our existing product suite. And adding to the product suite, we should grow from that. Overall, we should be able to maintain a healthy growth rate of about 40%, 45%, 50% over the coming years.

And second question, sir, on the retail side that we've done the tie-up, we expect around INR 500 crores of revenue at the end of the fifth year from now. So when will it start showing in revenue? And like what is the overall process pre that for -- like can there be any risks to that not going forward?

See, risk is something the business second nature is risk, okay? So -- but we are taking all appropriate measures to see that there is not risk on us because we don't take the credit risk, okay? So we partner with the bank, and we are the program managers for the retail card as well. So we are not going to take any credit risk per se, okay. Now I think first year of full operations would be from FY '26, '27. So April '26 is what you can take as the start date for the operations and the first year would be March '27.

The next question comes from the line of [ Piyush ] from [ Naran Family Office ].

Congrats on good set of numbers again. I have first request, starting. So in case if we can add one slide on acquisitions in our deck that shows that which acquisitions fill in which white spaces. That would be helpful because some are on the product side and then we have some acquisitions that are lined up within other white spaces. So that's a request from my side, if you can do that. And the second -- the first question was that I wanted to understand a workflow or a payment flow for something like BROME. So if we deploy on the customer end, is it mandatory for a customer to use our payment mechanism, our prepaid cards or credit cards? Or how do they make the payments to the end vendor?

Yes. So the BROME use case, we support multiple payment methodologies. But of course, this has to go through our software, our platform. So either you can make a payment through a credit card issued by us or a prepaid card issued by us or we also have the ability to be able to directly work with the current account of the corporate, right? So this itself has the current account, and we have the ability to give virtual sort of accounts to individuals who are linked to that current account. And that is how the whole solutioning has been done so that all 3 possibilities are there, prepaid card, credit card as well as a direct UPI on the current account of the corporate, whereas there are individual balances maintained for each user, and they are able to make the payment through UPI.

Right, Avinash. So the follow-up on this is that if the customer uses their own payment mechanism, how do we make money on that? Or with Mobileware we are doing something on UPI there?

See, ultimately, if they're using a credit card or a prepaid card, it has to be a Zaggle issued prepaid card or a credit card in partnership with our partner banks. If they are using the direct solution, there as well, we charge a fee to the corporate because the savings that they make on the BROME solution is about 20% to 30% of their current expenses. That's the amount of leakage and that's the amount of savings that we are able to generate. So from that, for a corporate to share a small amount, is not a big issue at all.

And in future, if we integrate the UPI, do we intend to make money through that? Or given there are no MDR right now, how do we intend to go forward with this?

So we are fully integrated with UPI today as well, and this whole solution works largely on the UPI rails powered by Mobileware. And there, we charge the software fees or the fees to the corporate. And because the savings are so significant for the corporate, the corporate is more than happy to pay this fee.

The second question was on Propel side. We continuously seeing that Propel growing much faster than Zoyer. So do we understand that Propel is like a foot in a door and then we try to cross-sell? I just want -- why am I putting this question is, I want to understand the stickiness of a customer on a Propel or a value proposition of a Propel versus a Zoyer or a Save?

See, the Propel points growth, obviously, is very strong because this is also the festive season for Propel. Overall, if you see the growth, you'll see a lot of growth coming in on the program fees. Also, keep in mind that a lot of the Propel spends itself come on a prepaid card. The Propel points revenue that you see is only the gift voucher reductions. So -- and that's a gross number, right? So that is how I would explain this. There's a lot of momentum that we have overall in Propel. Propel itself is very sticky because you have a platform solution there. And in some cases, acts as a foot in the door. In some cases, it's the other way around.

But if you have to really say which one is the foot in the door, you could say that Save is something which is foot in the door and is like sticky. It is like -- those are like multiyear relationships, which stick in there. And Propel and Zoyer are the cross-sells once we have acquired the customer through Safe.

And where do we see the business mix moving? Like in future, are we banking more on Zoyer and Propel takes a backseat later on? Or you think Propel will be the, again, the star hero product?

So just by the -- just look at the use case. See, Zoyer pretty much can be used by anybody for that matter. Any company which is doing business will probably go ahead and use Zoyer. Propel is like basically where sales and marketing are required, where you have channel partners or you have like IT companies where you have a huge employee base, there is where you go ahead and then use something called Propel, okay? So from that sense, Zoyer definitely has got a much, much brighter, wider use case. And eventually, over a period of time, you will see that Zoyer will overtake all other businesses.

Just the last one, if I can present. Probably I missed this one, that do we have any other acquisition, large acquisition that we are looking at or not for now, given there's a couple of them fallen through?

So at the end of the day, what we want to do is what is right for the company. There has been, see, internally also, we feel the pressure that we have to do a large acquisition. But when we see, when we look at them, and there are some red flags and some gray zones, we have stepped -- taken a step back. But we are continuously, okay, so we have an M&A team, which is continuously evaluating targets. And as we speak, we are looking at 2, 3, but we don't want to announce anything until we have a very, very decent handle on as to what the company is. So going forward, we will also want to see that a diligence is done, like a small pre-diligence is done before we sign the term sheet. So that is the thought which we are having right now. And we are continuously looking for acquisitions. And we can't tell you that, okay, this month or next month, but should come soon.

The next question is from the line of [ Angad ] from MIBL.

Congratulations on the great set of numbers. So my question was regarding, you had mentioned that you've signed a large retail chain in India. So have the revenues already started kicking in from them? Or are we supposed to expect in the future quarters?

Very small portion has started to come in. But as we are seeing that whole process grow, we expect a large number of revenues, large significant revenues to come in, in the coming quarters.

The next question comes from the line of [ Akash Jain ] from Narnolia Financial Services. The line for the current participant seems to have disconnected. We will take the next question coming from the line of [ Amit Jawade ] from [ Jawade Partners ].

Sir, regarding the fleet management, what was the revenue contribution in rupees crores this quarter vis-a-vis last time?

See, last time, there was no revenue from fleet, sir, because that business was nascent. Even currently, the revenue from fleet as of now is fairly small. But in the coming years, we see this to be potentially a very large business for us. If you look at it from an oil marketing company perspective or even some of the CDG companies that we mentioned like the Adani Total Gas, as those go live, the volumes can be very, very significant.

Significant, would you want to put some idea to it, sir? Or how should we look at it? Because from your commentary, it sounds like a fairly big market. And maybe a ballpark percentage of the total number of our business. Any idea that you can put it for that?

Yes. So the way we would want to do it is that look at a quarter or 2, okay, as to how they are shaping up and then comment on the revenue. Overall, looking at the market size, it's just humongous, means unbelievably huge market. But let us go ahead. Now we have done some tie-ups, revenue has started kicking in. But to give you a correct estimate within plus/minus 10%, 15% of what we'll actually do will probably take a quarter or 2 to give you a correct picture.

I have 2 more. Sir, since you have touched upon this, regarding the cash flow from operations, as investors, forgive me for being too simplistic, but we would want that CFO should be in tandem with your PAT year-on-year. So when -- I understand it will not match to the last decimal, but it should be -- it should have the same cadence. So when do you think that happening?

Like we mentioned, this year, we will breakeven and FY '27 onwards, you will see positive OCF.

But sir, positive, will it be matching? Will it be in tune with our profit after tax? Or how?

Like for OCF, like I mentioned, operating cash flows will turn positive, and we will generate cash from FY '27 onwards. Like if you see FY '26, we have breakeven. And the business growth of the current is H1, if you -- the growth aspects needed and some kind of investment into this considering the festive season and the corporate requirements as such. And in H2, we will breakeven for the FY '26 as such and the actual growth of operating cash flows, which turns positive and will be resulting in the PAT resumption in FY '27 onwards.

And lastly, sir, regarding the acquisitions, there have been multiple acquisitions which are going on. And since is there a thought that maybe if you have acquired something, get hold of it and completely let it bloom before we get on to the next acquisition or rather you are thinking that whatever you can get right now to acquire as much as possible. So how do you think about acquisitions per se?

Yes. So first of all, thank you so much for that question. There is -- if you really look at it, anything which comes our way, we would look at that, no. So we have a very clear-cut guidelines as to how we would like to look at acquisition. A, either it should be like part of our current product suite, which is there. So if it is adding either customers to us, adding revenue profitability to us, or is it strategic in nature, that is one, okay? The second, when we look at all these acquisitions, we also want to see that the TAM in these acquisitions is high. Like for example, on the retail credit card side, we are looking at a company which is already running a credit card linked to UPI. So now this will fasten our time to market. So we look at that, okay, we are acquiring this company, maybe a small company, but this will help us save a lot of dollars overall, okay? The third thing you look at is like is it -- if it is a strategic fit. Strategic fit means geographically, it is present in a place where we are not there, and we think that the initial investment would be higher than what is the cost of acquisition we are paying. Is this another leg up which we'll get that, okay, now this is something which is comforting to us. But all acquisitions per se, what we look at is that they should be EBITDA accretive, either strategic or EBITDA accretive or definitely revenue-generating exercise. And geographically, if it is -- it makes sense to us, we'll go ahead and do it.

And lastly, sir, the partnerships which you are doing with multiple companies on multiple verticals, we hear -- we read about them a lot from your disclosures, and we feel very happy about it. But I was just hoping that if we can see something like the pharmaceutical companies come, the first stage is done, the second stage, and then revenue started flowing. Is it possible to have something like a step-by-step chart, which partnership is where in this stage, like you have partners and you have started to generate revenue in between, there can be a certain steps. And after that, it becomes positive, operating profit becomes positive. Is there something that we can see in your deck, sir?

See, the way partnerships work, sir, is that some of these partnerships really add a lot of revenue over time. But for us to be able to predict that how which partnership will start adding value for us at which stage is hard simply because there is a partner dependency, sir. So let us say, I have partnered with a particular bank. I need to also make sure that I'm understanding their constraints or their priorities or their focus areas and then navigate through the partnership accordingly. So it's a little hard for us to be able to predict exactly how each partnership will pan out. And that's the nature of our business. We are also fairly cognizant of our efforts when we go ahead with these partnerships. Some of these partnerships are bringing phenomenal success and revenues and profits for us. Others are yet to really scale up. And we let each of these partnerships play out a little bit basis the comfort of the partner as well.

The next question comes from the line of Rohan Advant from Prad Capital.

Sir, my question is on other current assets in your balance sheet, which has gone up from INR 174 crores end of March to INR 264 crores as of end of September. When I look at the annual report, the largest item there is prepaid card loading. So can you just explain what this item really constitutes because that's a drag in terms of your working capital and cash flow conversion. So what does this constitute? If you could just elaborate on this, sir?

This is basically a scenario where especially with the festive season kicking in, there are certain amount of cards that we load because the demand peaks at that time, and we can't insist that the corporate make sure that they are actually paying us, sometimes the corporates request support. And hence, we keep a stock given the holidays, et cetera, that we are able to fulfill the demand during that season. This also has a certain degree of vouchers that we keep in stock for orders. So that's where that prepaid card loading overall captures the stock that we keep both on the cards as well as the voucher side. And this is something which goes up because of the seasonality and the festive period that kicks in.

And sir, is there a way to optimize this, reduce this so that working capital is released or this is the very nature of your business?

Sir, as I said, this is very specific to Dusshera, Diwali kicking in, right? And that's a time where everybody expects a little bit of flexibility as a partner to these corporates. And many of these customers have been with us for years, and they give us a lot of business, and we are -- we feel that we should support them.

The next question comes from the line of [ Vivek Lakhani ] from [ Karuna Investments ].

Congratulations for managing investors' expectations with good numbers. And I have a few questions, starting from cross-selling rate. So the last numbers on cross-selling rate was 20% in September 2024, where Mr. Avinash said that we are planning to achieve 50% in 3 years. And now we are just at 21%, where our corporates are growing at 15%. So may I know why no substantial growth momentum in cross-selling rate? Any issues in adoption?

So it was 16% during the IPO, right? And there are 3 or 4 factors here. It's a great question. Thank you for your question. One is the way we define cross-sell is any customer who has taken more than one of our products. And I alluded to this in the call as well. There are customers where we have sold 2 products, where we are going back now and selling 3, 4, 5 products, right? That doesn't really help our cross-sell percentage per se, but it adds to our revenue and profit. So that is what we are focusing on. And especially what we have found is once a customer has taken more than one of our products, has added one more product, the likelihood of them adding further products goes up because the relationship thickens, it becomes a deeper relationship. The number of corporates that we are adding also, that also puts -- increases the base, right? So that's also another factor that we need to keep in mind.

And on your new acquisitions on GreenEdge and Rio.money. So first on GreenEdge, so is this acquisition a margin accretive and revenue accretive? And if yes, what numbers can we expect and starting from when?

Vivek, currently, it is -- as of today, it is revenue accretive as well as margin accretive, and it will continue to grow. They are having like 100% growth over last year. Also it is 100%, it is very, very accretive to us.

And for Rio.money, if I'm not wrong, then you are stepping into B2C segment and starting to provide retail credit card, right?

Yes.

So the question on that line is that are you going to manage the higher credit risk, non-payments, and rising delinquencies, usually we associate with retail credit card, like non-payments and everything?

So one thing here is that the credit risk is taken by the bank, right? We don't take any credit risk or balance sheet risk of any kind. We are the partner which is helping them reach to a larger customer base. We are also taking a B2B2C strategy here, dipping into our 3.5-plus million users. So that's our first port of entry where we want to go deeper in our user base as well as please understand we have 3,600-plus corporate customers. Not all of their employees are on our base today, right, as much as we would have wished for. So there is a much larger universe of users that we can reach out to digitally as well as through kiosks, interesting activities that we intend to do with our corporate customers. where we will be able to reach to the safest segment in the retail card business. COVID has shown that salaried person tends to repay no matter what, right? The delinquency rates have always been the lowest in the salaried segment, and that's the segment which is our strong suit. And that's why a lot of banks are looking to partner with us also. Having said that, we don't participate in the credit risk or the balance sheet risk side at all.

So it's safe to assume that you won't generate any NPAs and GNPAs or credit risk for the same, right, for Rio.money based cards.

Yes, yes, that's not part of our partnership contract at all, that interest income also sits with the bank. The NPAs also sits with the bank. The underwriting is done by the bank. The whole lending part of the business is completely looked at by the bank. We have program managers. We co-create the product. We help in sales and marketing of the product and first level customer support.

Due to time constraints, this was the last question for today's conference call. I now hand the conference over to the management of Zaggle for closing comments. Over to you, sir.

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 other further information, we request you to get in touch with SGA, our Investor Relations adviser. Thank you, and have a nice day.

Thank you, sir. Thank you, everyone. On behalf of Zaggle Prepaid Ocean Services Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.