The Zaggle Prepaid Ocean Services has been under pressure today. However, JM Financial has initiated coverage with a ‘Buy’ rating, citing fundamental strength. The brokerage house has a target price of Rs 520 per share. This implies a potential upside of 44% from current levels.
JM Financial on Zaggle: Underpenetrated market opportunity
JM Financial, in its research report, noted that India’s corporate spending, rewards, and expense management is significantly underpenetrated, which provides a long runway for growth. The revenue opportunity for spend management software and services in India is estimated to grow more than Rs 20,000 crore by FY27.
JM Financial believes Zaggle is perfectly positioned to benefit from the sustained formalisation of business spends in India, anticipating a 34% revenue CAGR and 52% net profit CAGR over FY25-27.
JM Financial expects that Zaggle is perfectly positioned to take advantage of the ongoing formalisation of business expenditures in India, estimating a 34% revenue compound annual growth rate (CAGR) and a 52% net profit CAGR from FY25 to FY27.
JM Financial on Zaggle: Customer stickiness strongest moat
Zaggle’s integrated platform benefits from robust network effects. Once clients are onboarded and integrated, the friction for switching platforms is high. This results in an exceptionally low customer churn rate of less than 1.5%, which is one of the lowest in the enterprise SaaS fintech sector. This stickiness enhances scalability and creates a durable competitive moat.
JM Financial on Zaggle: Scalable SaaS-fintech platform
Zaggle is a full-stack B2B SaaS-fintech platform utilising a scalable, proprietary, modular technology stack (including Save, Zoyer, Propel, and the new AI-based ZatiX analytics platform). This platform approach creates defensibility, positioning the company uniquely at the intersection of fintech and SaaS and allowing it to offer end-to-end automation of enterprise spending.