Zaggle Q4 FY24: Net Profit More Than Doubles YoY To INR 19.2 Cr

Fintech SaaS startup Zaggle posted more than 153% jump in its profit after tax (PAT) to INR 19.2 Cr in the March quarter (Q4) of the financial year 2023-24 (FY24) from INR 7.6 Cr reported in the corresponding period of the previous fiscal.

Helped by increased income from SaaS subscriptions, program fees and revenue from employee rewards solutions platform Propel, the company also posted its highest-ever quarterly operating revenue of INR 273.4 Cr in the reported quarter. It was a 46.3% rise from INR 186.8 Cr reported in Q4 FY23.

On a quarter-on-quarter (QoQ) basis, Zaggle’s PAT increased about 26% from INR 15.2 Cr reported in Q3 FY24. On the other hand, its operating revenue increased 37% from INR 199.5 Cr in the previous quarter.

Commenting on the company’s earnings, Raj P Narayanam, founder and executive chairman of Zaggle, said, “In FY24 and Q4 FY24 we set new record in terms of revenue from SaaS fees, program fees, and Propel points. This led to our highest-ever performance across key profitability metrics during these periods.”

“We doubled our revenue over the last three years and are poised to double our revenue over the next two years through organic growth,” said Narayanam.

In the fiscal year 2024, Zaggle’s net profit stood at INR 44 Cr as against INR 23 Cr at the end of FY23. Its operating revenue grew 40% YoY to INR 775.6 Cr in FY24.

Zaggle said that it added over 620 new corporates to its client base during the reported year, including marquee names such as Wipro, Bennett Coleman, and Emcure Pharmaceuticals. It has also onboarded bank partners including SBI, ICICI Bank, Kotak Mahindra Bank, and Axis Bank, among others, which would assist Zaggle in enhancing reach and maximise its growth opportunities, it said.

Founded in 2011 by Narayanam, Zaggle provides a spend management platform for businesses, along with an employee benefits platform. It has a diversified portfolio of SaaS products, including tax and payroll software. The company made its stock market debut in September 2023.

Narayanam said that the company expects revenue growth to the tune of 45%-55% in FY25. 

“We are focused on garnering more market share and making significant investments in technology, specifically building deeper AI capabilities to cater to the massive demand for spend management solutions,” said Narayanam. “We intend to pursue inorganic growth opportunities through mergers and acquisitions.” 

Besides, the startup is also eyeing expansion into the US markets as part of its growth strategy.

Zooming Into Expenses

During Q4 FY24, Zaggle’s total expenses jumped 42% YoY to INR 252.1 Cr. In that, it spent INR 119 Cr towards the cost of point redemption or gift cards, which increased 15.6% YoY.

Zaggle’s spending on incentives and cash back increased to almost INR 110 Cr in Q4 FY24 from INR 46.6 Cr in the year-ago period.

Its employee benefit expenses fell about 26% QoQ and 46.3% YoY to INR 8.3 Cr in Q4 FY24.

Zaggle said that in FY24, its debt reduced to INR 73.6 Cr from INR 121 Cr, which led to a reduction in its finance costs on a YoY basis in Q4. The company posted finance cost of INR 3.8 Cr during the quarter, which, however, increased sequentially due to fees paid on the prepayment of debt, it said.

During the quarter ended March 31, 2024, Zaggle also acquired a 45% shareholding in Span Across IT Solutions Private Limited to offer taxation and financial wellness solutions to its customers.

Ahead of its earnings announcement, shares of Zaggle ended the trading session on Thursday (May 23) 1% higher at INR 313.95 on the BSE.