Zaggle expects Zoyer platform to contribute up to 50% of revenue as Bandhan AMC deal expands SaaS business

Zaggle Prepaid Ocean Services expects its Zoyer spend management platform to contribute 45-50% of revenue going forward as it signs new enterprise clients and expands its software-led offerings, Dr Raj P Narayanam, the founder and executive chairman, said.

Narayanam said the company's partnership with Bandhan AMC will add to Zaggle's strategy of combining software with payment solutions, while the management expects improvements in margins and aims to become free cash flow positive over the next 18-24 months.

"Our philosophy has always been that SaaS plus payments... We get a software fee... along with whatever interchange through our payment instruments."

Narayanam said Zoyer currently contributes about 45% of the company's gross revenue and is expected to maintain or slightly increase its share as demand grows across procurement, travel and expense (T&E), and accounts payable solutions.

"Zoyer would continue to grow... in and around 45% to 50% is what it should remain," he said.

As of 2 pm, Zaggle Prepaid Ocean Services shares were trading at ₹176.19 on the NSE. The company, which has a current market capitalisation of ₹2,366.47 crore, has seen its shares decline more than 50% over the last year.

He added that enterprises are increasingly adopting integrated spend management platforms, supporting the company's long-term growth plans.

On profitability, Narayanam said AI-related costs, which had previously put pressure on margins, have started to moderate. While he refrained from providing a precise earnings outlook, he expects operating margins to remain near current levels with room for improvement. "We possibly may be able to improve it a little bit, but would remain in and around that range for this year," he said.

The company also outlined its plans to strengthen cash generation. Narayanam said Zaggle has already started initiatives to improve operational cash flow and expects to become free cash flow positive over the next 18 to 24 months.

He noted that the company's SaaS and programme fee businesses generate gross margins of about 95%, while its Propel Points business has lower margins. Management is working on improving the overall business mix, margins and receivables.

On the recently announced merchant discount rate (MDR) framework, Narayanam said it was too early to quantify the financial impact, as the changes are expected to take effect from October 15.

He said Zaggle's Broom and Zag.money businesses could benefit because they are linked to MDR-based transactions, but investors should wait for a few months of operating data before assessing the impact. "I see that there will be some margin improvement, some cash which would come in," he added.

For the full interview, watch the accompanying video



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