Shares of India-based fintech SaaS company Zaggle plunged 20% intraday to ₹160.45 on the BSE, hitting the lower circuit after the company reported a 33% decline in consolidated net profit for Q1 FY27 amid margin pressure from newly acquired businesses.
- Q1 net profit dropped 33% year-over-year to ₹17.5 Cr
- Revenue rose 28% year-over-year to ₹423.3 Cr but fell from prior quarter
- Acquisitions of DICE and Zagg.Money weighed on margins and near-term profit
What happened
Zaggle’s shares hit their lower trading circuit at ₹160.45, marking a 20% intraday drop and reaching a 52-week low on the BSE. The decline follows the release of financial results for the first quarter of FY27, which showed a 33% year-over-year fall in consolidated net profit to ₹17.5 Cr from ₹26.1 Cr. Sequentially, profit declined by 57%.
Operating revenue grew 28% year-over-year to ₹423.3 Cr, but this represented a 32% decline from the previous quarter. Adjusted EBITDA rose slightly but margins contracted considerably, with reports attributing much of the margin pressure to increased costs from acquisitions of DICE Enterprises and Zagg.Money, as well as higher employee expenses and accounting changes.
Why it matters
The sharp profit decline and margin compression reflect challenges Zaggle faces as it integrates its recent acquisitions, including DICE Enterprises, an enterprise spend-management startup, acquired for ₹68 Cr in May. Such integration costs and transfer of previously capitalized expenses are hitting near-term profitability.
Despite these headwinds, brokerage Equirus retained a 'LONG' rating on the stock but cut the target price from ₹455 to ₹350, citing slower growth in core business and expecting the acquisitions to weigh on FY27 earnings by 21%. These developments have exacerbated investor concerns amid a broader 54% fall in share price so far in 2026.
What to watch next
Zaggle aims to return to stronger growth through increased deployment of AI on its platforms and revenue from the DICE integration, which is expected to start contributing from Q2 FY27 with fuller impact from Q3. The company maintained its FY27 revenue growth target of approximately 40%.
Additionally, Zaggle’s strategic investment of ₹8 Cr to acquire a 20% stake in Unobanc signals a push to expand into cross-border payments, forex cards, and remittances. Monitoring how these initiatives affect profitability and market sentiment in upcoming quarters will be key for investors assessing Zaggle’s turnaround potential.