Zaggle Prepaid Ocean Services Ltd (NSE: ZAGGLE) Q4 2025 Earnings Call dated May. 12, 2025
Corporate Participants:
Unidentified Speaker
Rohan Mandora — Advisor
Raj P Narayanam — Executive Chairman
Avinash Godkhindi — Chief Executive Officer and Managing Director
Aditya Kumar GV — Chief Financial Officer
Analysts:
Unidentified Participant
Swayam — Analyst
Devesh Kasliwal — Analyst
Jalaj Manocha — Analyst
Debashish Mazumdar — Analyst
Prateek Poddar — Analyst
Shrinarayan Mishra — Analyst
Rohan Nagpal — Analyst
Parikshit Kabra — Analyst
Ankush Agrawal — Analyst
Deepak Poddar — Analyst
Rahul Rajani — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Zaggle Prepaid Ocean Services Limited Q4FY25 Earnings Conference Call hosted by rigorous securities. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. This conference may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on the date of this call.
These statements are not the guarantee of future performance and involve risk and uncertainties that are difficult to predict. I now hand the conference over to Mr. Rohan Mandora from Equiva Securities. Thank you. And over to you Mr. Rohan. Thanks Avinat. Good evening everyone.
Rohan Mandora — Advisor
Thank you. And for. Thank you for joining the call. I extend a warm welcome to everyone on behalf of Equivirus. I welcome the management of Zygal Prepaid Ocean Services Limited to give a brief. Update on 4Q FY25 results and address investor queries. We have with us from the management. Team Dr. Raj Narayanam, Founder and Executive. Chairman, Mr. Avinash Gorkinde, M.D. Ceo and Mr. Aditya Kumar, CFO. We will now begin with a brief opening remarks from the management post which we can have Q and A. Thank you. And over to you sir.
Raj P Narayanam — Executive Chairman
Thank you. Thank you Rohan. A very good evening to everyone. Thank you for joining the earnings call for Zagl Prepaid Ocean Services Limited for the fourth quarter of fiscal year 2025. On behalf of the company, I extend a very warm welcome to all of you. On this call we are joined by Mr. Avinash Godkinde, M.D. cEO, Mr. Aditya Kumar, CFO and SGA, our investor relation advisors. 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 now I would like to give you the Zaggle business update.
FY25 has been an outstandingly remarkable year for ZAGL as we achieved our highest ever annual performance. Talking about the Quarterly performance comparing Q4FY25 to Q4FY24. The company reported a very healthy growth in revenues at 411 crore growing at around 51%. Our adjusted EBITDA increased to INR 38 crores growing at about 40%. The PAT surged to INR 32 crores growing significantly at 67%. Talking about the annual performance comparing FY25 to FY24. The company reported a healthy growth in revenues at 1303 crores growing at around 68%. Our adjusted EBITDA Increased to INR 125 crore growing at around 46%.
But the beauty was the PAT search to INR 88 crores growing significantly at 99%, well above our earlier guidance. I would want to give you an overview of ZAGL’s investment and investments and acquisitions. Our inorganic growth approach is aptly reflected in the words of Salesforce CEO Mark Binoff, you know when you combine two companies or more, you just don’t get scale, you get a new story. Inorganic growth continues to be a key pillar of our growth strategy as we build a comprehensive bouquet of spend management solutions to further deliver value to our customers. During the year we closed the acquisition of TaxPanner, completed the strategic investment in MobileWare technologies and have received board approval for a strategic investment in TFIA Soft Private Limited.
These investments are helpful in enhancing our client servicing capabilities in tax, UPI and payment solution segments. We see massive growth opportunities for taxpayers and in FY26 with one such promising opportunity in the gig worker ecosystem where we have launched a solution called Jugs Z U G S Zagl Unified Gig worker savings nearly 20 million low income blue collar workers in India face critical financial challenges. Despite having tedious deducted from their income, many do not file their income tax returns preventing them from claiming tax refunds that could amount to nearly two weeks or more of earnings, a sizable amount for these blue collar workers.
Jugs a comprehensive solution featuring a DIY journey with multilingual support to enable gig workers to claim their refunds in a seamless manner. While last year was a consolidation year for taxpayer where we invested a lot of time money effort in the product, the growth was little bit subdued at about 3.35 crores. But this year we look at a growth of about 60 to 70% which we expect that we’ll be able to do it with relative ease. Mobileware estimated revenues grew from 17.06 crore in FY24 to INR 33.89 crores in FY25 representing a remarkable YoY growth of 98% in FY25.
We signed marquee customers like IDFC Bank, Easebuzz, Catholic, Syrian bank and Camspay amongst others. The largest growth contributor was the implementation of API Banking layer in Sodiyo. Their bank allow multiple merchants to take advantage of our UPI payment ecosystem. The stellar growth in FY25 not only strengthens Mobileware’s ability to onboard new banks in FY26. It also enables mobileware to command a higher price point, improving the overall financial matrices. We continue to explore M and A opportunities in adjacent spaces in domestic and international markets with a focus on opportunities and payment solutions, loyalty management, card software and so and so forth.
In the payments domain, we focus on targets that have stellar management teams, sound business help, are product accretive and easy to integrate across the XAGL ecosystem to establish a strong strategic foundation that aligns with our long term objective of scaling to 1 billion in annual revenue. I am happy to announce that we have also signed a MOU with Mesh Payments, a US based AI powered travel and expense management platform backed by a seamless technology exchange. This partnership not only reflects our offering to Indian customers looking to streamline and manage their global expenses, it also unlocks access to global go to market opportunities.
While we continue to consolidate the market in India, this partnership gives a boost to our international expansion plans. Now I would like to give you the Industry and ZAGL Product Update Building on Steve Jobs classic idea, Innovation distinguishes between a leader and a follower. We at Zaggle have reimagined the idea as AI powered innovation, separating the disruptors from disrupted. We aim to fundamentally transform how businesses approach spends by becoming the default spend management infrastructure for companies and establishing ourselves as a as a truly SaaS company. AI powered SaaS company. We are transitioning from static to rule based rule based systems to a dynamic intelligent context based platform that continuously evolves and self optimizes over a period of time.
We are seeing the emergence of Model Context Protocol MCP within the agenti. Agentic AI doesn’t just support decisions but takes autonomous action. MCP is an open protocol that acts as a bridge between applications such as Zaggle and the large language models. MCP standardizes how agents would interact with other tools, data sets and associated environments within the XAGL ecosystem which would translate into a faster onboarding, accelerated revenue realization and a greater satisfaction and retention. We are implementing these AI workflows across our EMS Zoya Propel offerings to keep delivering innovative solutions that set a new benchmark in the industry.
Currently in the pilot space, Zaggle Copilot would serve as an AI assistant finance teams streamlining workflows and enabling smarter faster decision making and reducing human interface. We are currently leveraging advanced conversational AI technologies to fundamentally reshape the way we engage with customers and users, delivering multilingual, personalized and real time interactions at scale. Looking ahead, our strategy is clear focusing on intelligent automation invest in product led growth and scale responsibly. We are building capabilities for global enterprises while delivering long term value to our stakeholders. Now I would like to give our guidance for FY2526amid global geopolitical uncertainties and macroeconomic volatility, we currently project our standalone and I repeat the word, standalone FY26 revenue growth to range between 35 to 40%.
Last year FY25 our guidance on standalone EBITDA margin was between 9 to 10% and we are happy to announce that we are upping our guidance to 10 to 11% in the coming year in FY26. Hopefully our entire goal of achieving 12 to 15% EBITDA margin over the next 34 years. You know this year would be a deciding year for that goal to be achieved. I now hand over to our CEO Mr. Avinash Gaur Kinde.
Avinash Godkhindi — Chief Executive Officer and Managing Director
Thank you Dr. Raj for your remarks. This year has truly been a landmark year for Zag. Reflecting on our journey, I’m pleased to share that Zag now serves over 3,455 customers across diverse industries and sectors. We continue to maintain a churn rate which is below 1.5% highlighting the strong trust our customers place in us and the reliable value our platform consistently provides. Our growth engine remains strong and predictable. We are harnessing the power of AI to drive strong, scalable and sustainable growth to unlock new business opportunities. Our AI led approach positions us to stay ahead of the curve and create long term value across our core markets.
Today we are proud to report that we have over 3.28 million active users using XAGL powered cards and platforms software. This isn’t just a milestone, it’s a clear validation of our platform model and execution. We have launched the new XAGL app to simplify expense tracking, wallet management and incentive monitoring. Our goals are to scale, enhance customer to scale, enhance customer engagement and increase automation positioning zaggle to drive financial innovation in India and beyond. Coming to numbers during this quarter our SaaS platform fee contributed INR 9.3 crores, our program fees contributed INR 157 crores and our Propel points contributed INR 245 crores.
Not just that, we signed multiple marquee clients including industrial Cars, Honasa Consumer which is Mama, Earth, Forbes, Marshall, truecaller International, Aster, DM Healthcare and many more. Expanding our client base to elaborate further on how we are helping our clients, one of our clients were providing in house meals to their employees while deducting the cost from their salaries during payroll. This client faced challenges with manual tracking and post months reconciliations which made employees unhappy due to the directions being applied to their post tax income. To resolve this, we implemented the Zaggle Save solution which provided tax benefits for their employees and automated the transactions, improving operational efficiency by implementing the need for reconciliations.
As we continue to pursue our platform based approach, we anticipate rapid growth driven by a strong pipeline of new client acquisitions and effective cross selling strategies. In Q4 we were able to cross sell to a number of clients including Tech, Mahindra, Neuralgia Health, physicswala, Zepto and Wonder Home Finance amongst others. I’d like to touch upon a couple of these examples. Techmenza is an existing customer for our safe solution. We recognize the potential for further collaboration and we successfully plugged in our Zattic solution along with a corporate credit card to enable seamless payments with complete visibility.
Likewise for physicswala which is an existing customer of our Save solution, we were able to extend the Brome solution which is branch recurring operating monthly expenses to streamline and manage their 850 branches across the country more effectively with complete visibility. During the quarter we announced key collaborations As a part of the ongoing growth strategy, we entered into strategic collaborations with Gift City where we are launching a co branded prepaid citizen card designed to streamline payments and deliver seamless user experience across a range of services within the city. Additionally, we will implement a robust visitor management software system aimed at enhancing administrative efficiency across the Gift City ecosystem.
These initiatives position us as a key enabler of Gift City’s Smart City vision which also is opening up long term revenue opportunities through the recurring transactions and data driven services service enhancements. We’ve also partnered with Thomas Cook with the aim of transforming the global travel experience corporate travel experience by leveraging their comprehensive travel management expertise to complement our AI driven expense solution. This will help us provide a seamless integrated offering for domestic and international corporate travel with streamlined workflows and complete visibility. We are also co developing an innovative employee benefit solution, the Smart employee purchase program SmartPP in partnership with Reddington Limited which is in collaboration with Google.
This offering will be a tailored solution for corporate clients of Zaggle, enhancing our value proposition in the employee engagement and benefits space. I’m also pleased to share with you that zagl has been empanelled by bank of India as an authorized issuer of prepaid cards, further strengthening our presence in the banking ecosystem and expanding our distribution network overall as we build and scale RAGL into a truly comprehensive fintech platform, I’m proud to share some key milestones this quarter, first we received the TPAP approval from npci. This means we can now facilitate UPI based payments directly through our app and our platform, impacting and enabling over 3 million users across all our services.
This is a truly significant step in our mission to create India’s more seamless and integrated fintech ecosystem. Secondly, I’m delighted to announce that we’ve been recognized with an industry accolade. Zagal has been named Financial Institution of the Year at Franchise India’s fifth edition of Success Printer Awards. This recognition again reflects the innovation, impact and trust we continue to build across the ecosystem. As always, our focus remains clear to deliver a comprehensive offering in the spend management space, expanding our reach to new clients while increasing wallet share amongst existing ones. With every step we move closer to becoming the platform of choice for companies across India.
I now hand over to our CFO Aditya to take you through the finance updates. Thank you.
Aditya Kumar GV — Chief Financial Officer
Thank you Avinash. Good evening everyone and thank you for joining today. I’m delighted to report that the company has delivered another quarter and year of strong performance with robust revenue growth coupled with margin expansion. I would like to give you an overview of our latest quarterly results. First, in the Q4 FY25 we saw a robust revenue growth of 51% YoY reaching to INR 411 crores. This growth has seen across all revenue streams with the Propel platform raising up by 91% y while program fees grew by 15% y. Other expenses increased primarily due to higher sales and marketing spend during the quarter.
Employee costs remained stable on sequential basis but increased yoy basis driven by additional headcount to support business growth. This quarter also included certain transactional and legal expenses related to our inorganic expansion. Our adjusted EBITDA grew by 40% reaching to INR 38 crore this quarter compared to INR 27 crore in the same period last year. The increase in depreciation expenses is primarily driven by product capitalization during the year which includes our new office building. As well, our cash PAT which includes net profit along with depreciation and ESOP expenses saw an 86% increase y o y basis totaling to INR 39 crore.
Furthermore, our PAT rose by 67 percentage from the previous year reaching to INR 32 crore. For FY25, our revenue from operations has increased by 68% yy basis to INR 1303 crore. Our Propel platform saw an increase of 71% y basis and our SASP saw an increase of 12% y o y basis. We observed a 70% 500A increase in the interchange fee which has become a significant contributor to our revenue. This growth is largely driven by performance of our ZOE or Broem solutions along with organic growth in the save and propel businesses. Additionally, there has been notable rise in credit card issuance during the under the ZOE or offering.
Our adjusted EBITDA surged by 46% reaching to INR125 crore. PAT rose significantly totaling to INR88 crore which represents a 99% vow increase. Additionally, our cash PAT experienced a substantial growth increasing by 66% to INR 111 crore during FY26. We anticipate recording ease of expenses in the range of 9 to 10 crore. Our cash flow generation has improved significantly compared to last year. The cash flow from operations to debt INR 19.8 crores in FY25 compared to negative number in FY24. Our DSO improved from 82 days in last year to 60 days at the end of this year.
With that, I would like to conclude my update and we are happy to open the floor for questions. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press char and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press char and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Swayang from Pinpoint X Capital. Please go ahead.
Swayam
Hello. Am I audible?
Avinash Godkhindi
Yes.
Swayam
So my question is related to our program fee growth. So as we know that one of our main focus is on the growth of our program fee. So is there any reason why suddenly growth has been at 15% around? And what is your outlook going forward? Like how are we going to increase the transaction volume in this segment going further.
Avinash Godkhindi
Thank you. Thank you for your question. Swam. So as you see, in the year we grew about 70% on program fees, right? I think you’re looking at a quarter on quarter basis where we grew by about 15%. We’ve been focused on growing in a profitable way where we are able to, you know, increase our overall margins. And that has been the approach while working on improving our cash flow position. So we want to grow, of course, but we want to grow profitably and we want to grow in a manner which, which allows us to improve our cash flows as well.
So going forward also we see very strong growth in program fees. And overall we have given a guidance of 35 to 40% and we see program fees also growing in line with the same assessment. Okay sir, for the year.
Swayam
And my second question is on the propel part. So the gross margin of propel which is almost 10% this quarter assuming mainly due to the ORCs. But if I look at that on the FY25 basis it’s somewhere around 6%. So can you please elaborate like why are these margin this year are at these levels? And also like in previous investor meet we were mentioning about acquisition of merchant platform. So can you briefly tell like how this will going to help us in this segment going forward to increase the margins?
Avinash Godkhindi
So as explained in the last call as well, you know we were expecting the margins and propel points to go up to 6% and we were able to achieve that because of the orcs. As you rightly pointed out, margins as this line of business has grown will stay in this range of 6 to 7% for the coming year as well. And that’s how we have estimated it. This is where the margins we anticipate to be. On a standalone basis, of course the acquisition would help, you know, as and when we are able to close that because that allows us to be able to actually start issuing the gift cards for various merchants and dip into commissions from the merchants for issuing those vouchers, which is a SaaS income as well as, you know, expanded margins through breakage, etc. So but right now the guidance that I’m giving of 6 to 7% is on a standalone basis assuming that the acquisition would happen as and when it happens.
Swayam
Okay sir, I will get back in. The queue and all the best for the future.
Avinash Godkhindi
Thank you.
operator
Thank you. The next question is from the line of Devesh Kasil Val from Antique Stock Broken. Please go ahead.
Devesh Kasliwal
Yes, good evening sir and congratulations on a good side of this question.
Avinash Godkhindi
Thank you.
Devesh Kasliwal
From the Mobiware acquisition. So this as far as I understand this includes UPI payments for our platforms going ahead. So how is the revenue going to be recognized and what is our take on it? As in the what. What will be the margin for this like integration of our products with the UPI platform?
Avinash Godkhindi
So mobileware is an investment. We have about 38% shareholding today there and they have a very comprehensive robust platform for a variety of NPCI Technologies. Obviously UPI being the first, but IMPS, AEPs, BBPS etc and they work with over 90 banks today. Obviously you know, post our investment it’s been a plus for them to be able to acquire these banks and other fintechs so from our perspective we are today also acting as a. As a customer of mobileware where we are using their pipes to be able to connect to NPCI for both our TPAP and our roam solution. Right. And that’s how we look at it. But of course we support the company through our relationships and our connections to be able to increase their business.
Devesh Kasliwal
Okay, thank you for that. Second question in terms of customer acquisition cost, what was the number this year for the entire financial year and additionally the cash sitting on our books. So how are we going to deploy that over the current financial like FY26. What plans do we have on that front?
Aditya Kumar GV
So customer acquisition costs, it’s around 360 crore which we have spent in the current year. The cash sitting on the bank account side will be used for our regular working capital requirements. So which needs to be regularly invested on the production and all other stuff. But otherwise the money what we had in terms of raised firm QIP that will be utilized towards the respective objects mainly towards investment activity. Acquisitions. Acquisitions.
Devesh Kasliwal
Okay. Okay. Thank you so much, sir. I’ll turn back in the queue for additional questions.
operator
Thank you. The next question is from the line of Jalaj from Swan Investments. Please go ahead.
Jalaj Manocha
Yeah. Hope I’m audible.
Avinash Godkhindi
Yes. Yes you are.
Jalaj Manocha
Thanks for the opportunity. So I mean I was just delving a little deeper. So specifically on the platform. Sorry, on the. Yeah. On the program C. So you said that we are looking for a profitable business. So does that mean that we are saying no to a few, few transactions of some sort of business so as to ensure the profitability? And. And on what parameters is exactly the decision or what is deciding? Because I thought that it will be a standard margin product which is being sold right now. Could you talk a little about it?
Avinash Godkhindi
Yes. Yes. So. So look at it in conjunction with the incentives that we give and incentives we give to both users in Propel and Save as well as incentives that we give at times to corporates in Zoya for the growth which has gone up from 137 crores to 157.1 crores in program fees, our incentives on the other hand has come down from 110 crores to 108 crores. Right. So while the program fees has gone up by 20 crores for the. And I’m doing a Q on q comparison here. Q4FY24 to Q4FY25. The incentive number has actually gone down. So that is what I was trying to elude to. And thank you for your question because you See, the top line has grown and the costs have come down. Right.
Jalaj Manocha
Okay. Okay. And then specifically on the program, fees are in the charge. How, how the traction specifically on these Zoya cards? Because as per our understanding or whatever discussion we got that the product was a superstar product and should have started to see a lot of more traction. So are we seeing that or how far are we from that inflection point in the Zoya product? What sort of traction are we seeing right now?
Avinash Godkhindi
Traction is very good. Traction is very good. And we are continuing to grow there. The whole idea is to be able to, as I mentioned, optimize on profitability, optimize on cash flow while we grow. Right. There’s no point in our view to grow blindly without looking at these two other factors. And that’s why we are trying to balance it out.
Jalaj Manocha
Okay. And anything specifically, is there a pressure on the. Or the take rates are different on a royal product versus the save or the. The safe product per se? Is that the reason why the growth isn’t as quick as we were expecting? Because ideally, if the products were so great that yoy I see only specifically for this quarter is just a 15% growth?
Avinash Godkhindi
No, the take rates are not too different. They are all in the same range, in the range of about 1.7 to 1.75%. And, and the idea is, again, I’m repeating myself, that the whole idea is not to just grow, but also to grow with better margins. We could have probably shown you much higher growth than that 15. Maybe we could have grown at 30, 40% if we had given more incentives. Right. We wanted to control the incentives and build that discipline in the market because we’re not building for 1/4 or 1 results. We are wanting to build that discipline and improve our incentive position over time for the coming quarters and coming years as well.
Jalaj Manocha
Sure. One second. Okay, so could you talk a little about the quick commerce deal we had talked about? I guess that was for the Zoya. Again, how is that shaping up and how the. How that. What sort of traction are we seeing there?
Avinash Godkhindi
Again, in each of these cases, there are multiple of these quick commerce deals that we’ve done in the BigBasket, Zepto, Blinkit, etc. And each one of them is shaping up well. Traction is good, and we are now juxtaposing that with our jumps platform zaggle, unified gig workers savings. And that would then again further deepen our penetration with these companies and enhance the value proposition with these companies.
Jalaj Manocha
Does it typically take a lot of quarters or a few quarters to Scale up the businesses while you onboard a client. Because again, so just on an absolute terms program we should have scaled up because these are usually larger clients having huge expenses per store. I guess a few growers should come in so that obviously revenue will not flow but take rate even if you put in. So sensible amount of revenue should have started to flow from them. So does it take a few quarters to scale up?
Avinash Godkhindi
Yes, it takes a few quarters to scale up because there is an adoption, there is education. You need to make sure that you know, you’re doing it in a manner which is giving the confidence to the CFO and her team that they have control on the spends. So you’re talking of large enterprises and you know, hundreds of crores of spends. So each company has their own, you know, pace at which they want to roll it out.
Jalaj Manocha
Okay. Okay, so how are, how far are we from that inflection point? Or in broadly in those accounts or for these larger accounts?
Raj P Narayanam
So these, you know, so in three of these larger accounts we are live and then there are like about four or so, you know, which are, you know, which would go live in let’s say anywhere between you know, four to six months. Okay. And, and you know, once you have gone live, you know, then the adoption starts. So you go live with let’s say maybe you know, 100 branches, then you expand it to maybe 500 branches, see the system stability, etc. And figure out that, okay, you know, what are the various kinds of issues are there for that particular enterprise? Solve them and then scale them to, you know, whichever, you know, how many, however many stores.
So post that initial setup of that, you know, 300 to 500 stores, then you are able to expand it to maybe even to 3,000 odd stores. Okay. So that is how this entire thing functions. So from signing of the contract, typically you will take anywhere between four to months to go live in a very, very large account.
Debashish Mazumdar
Yeah, this is Devashish. So I work with just a small. Follow up with the question that J was asking. So is it fair to assume that then this quarter is a kind of transition quarter for us where because of the large size account visibility that we have, we are kind of sacrificing growth for those, for, for those accounts where profitability is low. And that’s why this quarter there is. A lower growth in the, in the program fees and going forward we will see much traction there.
Raj P Narayanam
So you know, you know, let’s not over simplify it, okay? Because you know, you know, there is no, what do you call, you know clear cut, cut formula, you know. So I would say that you know, the growth has been healthy over last year. You know, on a Q4, Q4Q account, you know what happens is this is Q4, Q4 there is like last year Q4 was a bumper, bumper year and you know it has grown by another 15% over the Q4 of last year. What we see is that as we, you know, as we sign up more and more clients overall the pace of if you see Q4 of FY26 you would see much, much more larger you know, revenue increase over this quarter. The you know, last Q4 of FY25. So can’t say transition but it is a constantly improving growth is how you would be able to see it.
Debashish Mazumdar
Got it. And one last question quickly on the margins.
Debashish Mazumdar
Sorry Ricky, close this maybe Rick. Hello Mr. Jalad, sorry to interrupt. May we request that you return to the question queue for follow up questions as there are several participants waiting for the turn.
Debashish Mazumdar
Hello. Thank you.
operator
Yeah, thank you. The next question is from the line of Pratik Badar from Bandhan amc. Please go ahead.
Prateek Poddar
Yeah, hi. Three questions. One is on a sequence I see. A very sharp increase in other expenses. So maybe you can help me understand what has happened over there. The other is when I look at your cash flow statements there is something called other current assets where a substantial amount of cash has been blocked close to 40 odd crores. So you can let me understand what is that that second and lastly I see Capex which is high. Maybe you can just break that down between product development and other, other Capex, whatever you would have done. So three sets of questions.
Aditya Kumar GV
Yeah. Hi Pratik. So the other expenses, sharp increase as an account of the business promotion advertisement expenditure which you have done in this quarter like we did multiple conferences and all of the stuff that’s one. And second is also increase on account of the network charges and the switch cost what we have to pay when we have to to integrate with any of these clients. So this typically comes when new client addition happens and all of those things as a percentage of revenue if you see it will be the standard thing and moving on to the Capex item.
So in the current year if you see we have launched two to three new products like Xatix and Fleet Solution and Zip etc. Which has been, which was in the stage of under development stage that has been capitalized and moved to the intangible ethics stage. And when it comes to the ppe, the new office building which you have shifted that is the standard increase. So third one on the other assets. Other assets typically this I’ve explained earlier also. So it includes you of two components. One is the voucher stock which we maintain on every monthly basis in order to meet the demand of the customers and clients.
And second is the preloaded cards. So these two put together we have close to around 152 crores and rest of the balance of 16 total. Other current assets is around 170 crore. What you see in the balance sheet these two put together as the 152 crore and balance 1415 crore are the reconciliation statement which we do with the pool accounts. Out of this 152crore around 60crore pertains to the gift voucher stock and around 90crore pertains to the pre loaded cards. So why this number is higher is because an account of two reasons. One, the business is increased significantly compared to last year and now.
And second, if you see in the March especially What happened is 2930, 31 are the holidays. 31 is on account of Eid. It’s a holiday. So where we have received the orders from the clients but fulfillment was not done. So what happens is in order to meet the demand on the timely demand and meet the SLAs with the clients, we have to load the cards up front and deliver to them at the later point of time as soon as we receive the orders. Since three days of the holidays where we received the orders and fulfillment was not able to not able been done because of the holiday structure. So these are the reasons.
Prateek Poddar
No, this is very helpful. And lastly, just on a trajectory of other expenses, is this the new normal. We should think about? Because other expenses generally are rising faster than let’s say our sales growth obviously on a low base. But. But is that something which will happen next year also?
Aditya Kumar GV
So can’t comment as of now, Pratik. But this is like one of the activities but typically as a percentage of revenue it will be in the range of 1, 2 percentage on the specifically items which we spoke other than the employee cost.
Prateek Poddar
Got it. And lastly, just wanted to confirm, look. Next year I think you’re guiding for. 35 40% growth with some margin expansion. And given that, you know we have. Had some years of hyper growth, the 3540 should result in now a decent cash flow accretion. Right? We would not get into a situation where there is negative ocf. Obviously this year you have generated some. Oculus ocf, though very small as a percentage of what the EBITDA is But the EBITDA to OCF conversion next year should improve. That’s a fair understanding, right?
Aditya Kumar GV
So definitely as pratik it will improve because like last time last year it was much, much negative and as we promised to the wider investors etc. So we have a break and even in the current year. So the idea is to focus on this much more and be capital efficient and OCF will increase gradually. So we in fact one of the first step, what we did if you see is our DS four days, right. So which used to be 82, that has come down to 60. So we potentially go ahead and reduce that further. That’s where the focus will be. As soon as well as that gets reduced, the automatically the cash flows will turn positive.
Prateek Poddar
And maybe some guidance, maybe not today, but in future calls on conversion from EBITDA to OCF helps a lot. So that’s one suggestion I would leave you guys with. But otherwise, thanks so much. Thanks.
Aditya Kumar GV
Definitely. Thanks.
operator
Thank you. The next question is from the, from the line of Sri Narayan Mishra from Baroda BNP Paribas. Please go ahead.
Shrinarayan Mishra
Hi. Thank you for the opportunity. My first question is on the EBITDA margin. So we can, we can see your propel margins increasing.
operator
Sir, can you be pleased? Louder. Can’t hear you.
Shrinarayan Mishra
Hello. Is it better?
operator
Yeah. Yes.
Shrinarayan Mishra
Yeah. So my first question was on EBITDA margin. So you know, we can see your propel margins going up to 10% this quarter versus 3Q but we can’t see the overall EBITDA margins, you know, moving up in that direction. So from 3.23 something percent to 10% is the margin which we see in propel but EBITDA margins is flat. So can you throw some light? Why, why this did not flow through?
Avinash Godkhindi
So we, we explained this last time as well. The propel margins were supposed to expand in any case because of the overriding commissions that were due for the sales that we generated through the first nine months. So that has flown through now overall if you look at it, our margin guidance was 9 to 10% and we are at about 9.6% for the year. And next year our guidance is for 10 to 11% and we will, you know, look to meet that. If you look at Q4 of last year as well, Q4 is a high growth quarter for us.
But margins are generally a little compressed in Q4 because a lot of the corporates also meet their spend thresholds in Zoya etc and they, they tend to get some of their, you know, commissions etc from us Incentives from us. So this is the nature of our business that you know, Q4 does tend to have much higher growth but a slightly compressed margin profile.
Shrinarayan Mishra
And these expenses, we cannot even these out over the course of. So with the 4Q lumpiness, I mean by way of accounting it is required or can we do some provision in earlier quarters for these expenses? Is that not possible?
Avinash Godkhindi
It’s hard because we don’t know who will cross what, what hit what thresholds. Just the same way as we are not allowed to take, you know, revenues in earlier quarters because we are also not able to prove to the auditors that we will cross those thresholds and propel points. That’s the nature of this whole piece.
Shrinarayan Mishra
Okay. And secondly, sir, on Rome, if you can highlight what in terms of dmv, what we have achieved or in terms of revenue, gross or net revenue, that would be great.
Avinash Godkhindi
Overall in Brome, we’ve grown very significantly in terms of number of clients which have gone live and where we have signed up. It’s a little too early for us to give you more data, specifically in Broom, which is part of Zoya, as to how much we have done in terms of revenues, etc. So do you have any. I mean directionally by when you see that to be a significant of the business and you start giving numbers on that. So it will always be part of Zoya, but specific numbers probably will give sometime in this year depending on how numbers pan out and how it is. But you will see in our business more and more as we push for cross sell that a lot of these numbers are going to be intertwined. The whole idea is to capture all the strength of the corporate while we explain the solution to you as a separate use case when the team goes and sells to the corporate. The thesis is all about trying to give you a comprehensive spend management solution.
Right?
Shrinarayan Mishra
Okay. Okay. Last question. If I miss.
operator
Sorry to interrupt.
Shrinarayan Mishra
No worries. No worries.
operator
Thank you. The next question is from the line of Rohan Nagpal from Helios Capital. Please go ahead.
Rohan Nagpal
Hi. Thanks for the opportunity. So since you’ve booked overriding commissions in Q4, the actual growth that we’re seeing in the underlying volumes is a little hard to gauge. Could you give some sense of how much growth we’re seeing in the underlying propel volumes? Excess overriding commissions that were booked this quarter. Thanks.
Avinash Godkhindi
See, the volume growth is what it is, you know, we told you it has grown from 128 crores in Q4FY24 to 245 crores. Of course you know, the margin gets added to that. So largely the. The growth is pretty strong. It’s just that the orcs come in in the last quarter.
Rohan Nagpal
Okay, understood. Thank you. That’s it.
operator
Thank you. The next question is from the line of Parikshit Khabra from PKD Advisors llp. Please go ahead.
Parikshit Kabra
Hi, just want to clarify the first question that was asked about program fees growth guidance for next year. I think Avinash said that it will go in line with the overall guidance. That implies that program fees will also. Be about 30%, 35% for this year. Is that a fair understanding?
Avinash Godkhindi
Yeah, 35, 40% is what we have projected as our overall growth. And program fees should also grow in line with that. Yeah.
Parikshit Kabra
Okay, perfect. And will this be front loaded, back loaded, anything along those lines? Same thing for, by the way, for EBITDA guidance. Are we expecting it to gradually ramp up or are we expecting it to. Come from Q1 itself?
Avinash Godkhindi
See, all of it will gradually ramp up because the nature of our business is also such that Q1, Q2 generally are lesser in terms of revenue. Q3, Q4 are higher contribution. So historically it used to be a 65, 35. Now it’s gone down to about 50, 758, you know, 42, 43 type of a number with Zoya’s increased contribution. But there is always a skew towards Q2.
Parikshit Kabra
Got it. But from a year on year growth perspective, when I compare it, you know, Q1 to Q1, Q2 to Q2, I’m. Talking from that perspective. Should I not be seeing 30 to. 35% growth from Q1 or. Because then it will imply then that for the year on year guidance should. Be met, that in Q3, Q4 you will be giving upwards of 40, 50% growth.
Avinash Godkhindi
Yeah, it’s pretty much like that. You should see growth because Q1 of last year was also a lower number. I think 118 crores for program fees. So you’ll see that number pan out at that 30, 35% range.
Parikshit Kabra
Okay, got it. Perfect. So my second question is from a the GTV perspective from the gross transaction value, is it possible for you to. Start disclosing from our program fee what. Is the gross transaction value we are seeing? Because over the last year we have. Added so many clients. But you know, the program fees has not grown as much and the pay period has also not changed as per your previous response. So that means the GPV has not managed to grow. Is that correct?
Avinash Godkhindi
The GTV has grown. It’s. It’s grown fairly well. Because if you look at it the whole year the program fees, sir, has grown by 70%. Right. And it’s not at a small base. The base last year also was 322 crores. And on that we have grown by 70%. So I think somewhere maybe we are. We want to highlight this, that overall you should look at the year’s numbers and how the number growth has been. And overall the number has grown very healthily at 70%.
Parikshit Kabra
Okay, understood. All right. Thanks. Thanks a lot. Thank you.
operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Uncle Shagarwal from Search Capital. Please go ahead.
Ankush Agrawal
Yeah. Hi. Thanks for taking my question. So first question is a bit on change in commentary. So till last quarter the commentary was more around that we are more focused on growth because the opportunity is so huge. And even if that sort of keeps our margins subdued in the near term we are fine with it. Whereas in this quarter we have been talking a lot more about margins and better cash flows. And that reflects a new guidance as well wherein you expect margins to improve in the coming year. So wanted to understand what has led to this change.
Wherein earlier the guidance and prediction was more growth focused and now it has changed to more balanced growth perspective. Has there was something changed.
Raj P Narayanam
So you know, nothing has changed. If you look at last year, you know, when we, you know, came In March of 2024, we said, you know, we possibly will grow by 45 to 50%. Okay. And we ended up growing by about 68%. So the whole idea this year is that, you know, while we look at, you know, growth we also look at improving our margins. And improvement in margin is a part of the long term objective. That which is that we have to take it to about 15, 16%. You know, over. Over the next three to four years.
Years. Okay. While you know the margin expansion will come, it will also come at scale. Okay? The scale which we have to achieve will come only by having a little bit aggressive growth plan. What we are referring to 35, 40% is please see it is on a 1300 crore base. Okay. Last year the base was 775 crore. Previous to that year was, you know, 553 crores. So if you look at it, if we are saying this year that we are growing it about, you know, 40%, that is about 1800 crore plus. You compare that two years back we were at 553 crores.
And today next year we would be at about 1800 crores. So that is like 3x jump in about span of 3 years. Okay, so and at every base we are growing. The idea is not to let the growth slow down, but idea is to improve margins while we improve growth. The second question sir is around the mna. So it has almost been a year or so wherein we have been talking about doing some major M A. It’s almost been almost five, six months since we have raised a substantial amount of capital as well. We’re just trying to understand like what is happening over here. Like every, you know, sort of pinpointed some M and A and the due diligence itself is taking long time or we are still figuring out which company to acquire because the timeline between capital reason not being able to acquire itself has been like six, seven months now.
So if you can share some insights like if the duty is taking time or you’re not able to figure out the right mla like what is happening over there. It could be. Sure, sure. You know, you know, very good question and I’ll answer it in detail for you. See, you know when we raised the money that was like end of December. Okay. And since January, you know, in fact. And we have started looking at, you know, multiple companies. We are in very advanced stage. But even when I say very advanced stage between the closure and and you know, very advanced stage, it could be a quarter. Okay. And these are like, these are like little bit large acquisitions, you know, with multiple investors on the other side. And there has to be, you know, and also the due diligence typically takes about three to four months, you know, because there is FDD which is financial due diligence, then tax due diligence and then legal due diligence and then you know, the final terms which we have to agree with, you know, the acquiring company.
Okay, so what’s happening is that we have set up, you know, about seven to nine players and there is a lot of amount and time and effort which goes from the management side as well. When we are looking at these companies though, we have a dedicated set of team which is looking at it, but the management time also goes in. So what we have done is, and, and in spite of, you know, coming very, very, very, very close, sometimes it just stretches at the last moment. Okay. And that stretches what we have seen in one or two cases.
But, but we, you know, we should be able to, you know, very soon tell you as to, you know, what’s the status on all These acquisitions.
Ankush Agrawal
So the takeaway would be that we have figured out what we want to acquire. It’s just that the due diligence and the core process is taking time. But we have figured out what we want.
Raj P Narayanam
And you know, we wouldn’t raise money or we would not go ahead and dilute ourselves if we had not a clear cut thought process on, you know, whom to acquire.
Ankush Agrawal
Thank you.
operator
Thank you. The next question is from the line of Deepak Patar from Sapphire Capital. Go ahead.
Deepak Poddar
Yeah, I’m audible, sir.
operator
Yeah, you are audible, sir.
Deepak Poddar
Yeah, so just couple of clarification. First up, I mean what was attack spanner revenue for FY25.
Raj P Narayanam
So FY25, it was about 3.35 crores.
Deepak Poddar
3.35 crores. Okay, understood. And, and in terms of, I think you mentioned something the 6 to 7% standalone. So what was you were referring to? I mean some, some outlook is shared on 6 to 7%.
Raj P Narayanam
No, no. 60 to 70% growth.
Deepak Poddar
So it was not in context of tax spanner. But, but on standalone basis you were saying something 6 to 7% just wanted.
Raj P Narayanam
So 6 to 7% is the Propel margins. Propel margins would be about 6 to 7% range is what you know we are saying on a standalone basis. Understood.
Deepak Poddar
And just my question, first question is in terms of acquisition, whatever we are targeting, are we looking at them as a margin accretive one? I mean how should one look at.
Raj P Narayanam
So majority of them, I would say 95% of them would be margin accretive. But one of it could be product accretive as well.
Deepak Poddar
Fair enough, that’s very clear. And when we say 30 to 40% outlook in terms of growth, are we being conservative there, sir?
Raj P Narayanam
You know, if we say yeah, 35 to 40 is what you know, we have projected. Let’s look at it, you know, how the year goes by and let’s also see, you know, how the market shapes up. And right now, you know, this is what we have a very clear cut, you know, a plan to achieve this. But maybe in coming quarters we would be able to give you a better guidance.
Deepak Poddar
Okay, understood. And this last thing in terms of margins you mentioned, we are looking at 15 to 16% in next four years, three to four years. So per annum, I mean 100 basis point is what we are looking at, I mean internally in terms of improvement.
Raj P Narayanam
Yeah, that’s a smart assessment. You know, that is what is our thought. So this current year we are looking at 10 to 11%. Okay. And as we go on, every year we would look at improving the margin.
Deepak Poddar
By 100 basis point.
Raj P Narayanam
Yep. By could be, you know, depends. Next year I’ll be able to tell you about next year is how it goes.
Deepak Poddar
Fair enough. Got it, Got it. That’s very helpful, sir. I think that would be from my side. All the best. Thank you.
Raj P Narayanam
Thank you.
operator
Thank you. The next question is from the line of Rohan Nagpal from Helios Capital. Please go ahead.
Rohan Nagpal
Hi. Did you follow up? So, I mean. Am I audible?
Avinash Godkhindi
Yes, yes, Rohan, go ahead please.
Rohan Nagpal
Yeah.
operator
Yes.
Rohan Nagpal
So I’m saying if, if there is, if there are overriding commissions that have been booked this quarter, then the revenue that you book under Propel will be the propel revenue from your gift card that you’re sold plus the overriding. Right,
Avinash Godkhindi
yes. Yes.
Rohan Nagpal
Yeah. So I’m just trying to understand. So that doesn’t really give us a picture of what the underlying growth rate is within the Propel business because the overriding commission is distorting that growth rate. So could you give us a sense of what the underlying growth rate is. Within propel
Aditya Kumar GV
excluding versus ROHAN? It is 78 percentage on Y quarterly basis.
Rohan Nagpal
Oh, okay. Thank you.
operator
Thank you. The next question is from the line of Rahul Rajani from MIPL family office. Sorry to interrupt. You have a disturbance from your end. Could you please reconnect?
Rahul Rajani
Yeah. Can you hear me?
operator
Yeah, go ahead.
Rahul Rajani
Yeah, thanks a lot for the. Thanks a lot for the opportunity and congratulation. Congratulations to the management for the result. Wanted to just have one update. That is in the last conference call. You had mentioned that you had signed a contract with one of the largest retail chains in India, which is one. Of the largest conglomerates. So how is that shaping up? How is that going about and when. We can see the revenues kicking in for that?
Avinash Godkhindi
So yes, as we explained. Thank you for your question. As we explained, some of these large once take a while to go live and in this case the POC was successful and we have gone live. But you know, you would understand that scale up when you’re talking of thousands and tens of thousands of branches has its own gestation period and that’s what we have seen. Revenues have started to come through but it would take us a little while for us to be able to really see very significant revenues. Also please note that you know, right now the base of revenues that we are looking at is 1300 to 13003 crores. Right. So it has to be significant with that base and that that’s a little while away. Yeah.
Rahul Rajani
So thank you. Yeah.
operator
Thank you. The next Question is from the line of Devesh Kasilwal from Antique Stock Broking. Please go ahead.
Devesh Kasliwal
Thank you. Circling back from the guidance. So you’re saying that standalone guidance will be around 35 to 40% which I am presuming will be a conservative estimate right now. But apart from that, from the acquisitions and the acquisition that we’re projecting to come forward in the next quarter, obviously that will also add to the revenue. So the overall console guidance. Can you give a number if possible.
Avinash Godkhindi
See if all of them come before September, then Devesh we should be at about 80 odd percent as a, you know, as growth. Okay. So standalone is what we have said, 35 to 40% consolidated. If we get all the acquisitions which we have planned, we are able to complete, you know, before September, then we will be able to take the earlier and it would be about roughly in the range of another 40% it should easily add.
Devesh Kasliwal
Okay. Okay, thank you for that. One last question. So normally given a platform, the SaaS platform, so we have clients that are recurringly using our platform on a monthly basis. So is there a possibility that you could give a monthly recurring revenue number that we are at right now? Because obviously it is always going to grow going forward unless we have clients exiting. So that would be a fairer assessment of how things are shaping up on a standalone basis for the overall company.
Avinash Godkhindi
Sure. We will look at that and come back.
Devesh Kasliwal
Okay, thank you, sir.
Avinash Godkhindi
Thank you.
operator
Thank you. Due to time constraints, this was the last question. I would now like to hand the conference over to the management for closing comments.
Raj P Narayanam
Sure. So 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 further information, we request you to get in touch with sga, our investor relations advisor. Thank you and have a good night.
operator
Thank you. On behalf of Ekivares Securities. That concludes this conference. Thank you for joining us and you may now disconnect your lines.