Posts tagged Value Pickr
Zaggle_A platform to address pain points for enterprises (24-07-2024)
Key risks
Agreement/regulatory changes adversely impacting interchange revenues
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Company’s revenues are largely dependent upon Banks sharing a part of interchange on the co-branded cards. Banks currently share a significant part of the interchange with ZAGGLE as they get float on the card balances,
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they get to bundle value added products along with bank’s own core products which creates differentiation viz competition
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Any change in the agreement/Regulatory environment can adversely impact the interchange revenues.
Slowdown in new customer acquisition
- If any of the above 4 growth levers stops working for Zaggle, business could see lower growth rates
Change in Tax laws
- The risk isn’t that significant but might impact Zaggle to an extent
Incentives and cashbacks as a proportion of program fees do not decrease across products
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A key thesis for EBITDA margin expansion is that incentives and cashbacks will moderate over time across each product as these incentives and cashbacks are largely linked towards onboarding and activation of new customers to drive usage of ZAGGLE’s products.
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With Zoyer having a higher incentive payout currently (at above 80%), we expect overall incentives and cashbacks as a proportion of program fees will increase over the next couple of years. However, if the proportion of Incentives and Cashback’s doesn’t decline that the operating leverage may not play out but earning growth can be in line with the revenue growth.
Increase in competitive landscape
- There are many start-ups as well as incumbent entities globally that are offering spends management solutions. As the spends management ecosystem matures, there could be an increase in competitive intensity thereby impacting growth for ZAGGLE. Given the customer low churn rate in this business, it is essential that the company focuses on onboarding clients at an accelerated pace.
Time technoplast (24-07-2024)
Do you believe time technoplast can be a huge beneficiary of the upcycle seen in gas sector?
Atma Nirbhar Bharat – Stock opportunities (24-07-2024)
Who gets what in union budget 2024-25 ? All Sectors briefly explained
TOP Sectors of interest:
Allocation for the defence sector is highest at Rs 6.22 Lac Crore.
Rs 1.72 lac crore allocated for fighter aircrafts, ships, submarines, other critical defence capabilities
Rs 11 lakh crore Capex for infrastructure in the country. 3.4% of GDP will be spent.
Road Transport and Highways @ Rs 2.52 lakh crore)
Railways @Rs 2.72 lakh Crore
Additional budgetary support for infrastructure for Bihar & AP
https://www.financialexpress.com/budget/who-got-what/#energy-sector
Zaggle_A platform to address pain points for enterprises (24-07-2024)
**** Pre-requisite - How to read financials of Zaggle***
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SaaS fees and program fees are reported both on a net basis with almost no direct expenses involved which give us a gross margin of about 94%, 95%.
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In contrast, propel point revenues are recognized on a gross basis and the gross margin for this varies between 7% to 10%.
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Program fees (revenue side) encompass various revenue streams including interchange income and incentives from networks like Visa and Rupay.
- Program fees (expense side) have 3 components –
- cashback for prepaid cards,
- cashback for business credit cards
- cost of funds.
FY’23 - had one component which was cashback against on prepaid cards.
- What are Intangible assets under development?
- One is Zoyer, which is yet to go completely live.
- ZatiX is the analytical platform, will capitalize once it gets completely done.
- ESOP guidance for FY’25
- With the existing set of costs, without any new issuance of ESOPs, FY25 will be around INR8 crores & INR3 crores is FY’26.
- Will the take rates remain constant
- It is evolving as more and more expenses are being incurred on recharges. Gas, fuel, electricity, etc. which have lower take rates but overall take rates should remain constant at 1.8%.
- Seasonality:
Business does anywhere between 35% to 40% of revenue in the H1, and 60% to 65% of the business in H2
- Working capital will be in three categories -
- SaaS fee - 50-60 days,
- Program fee, which Zaggle largely charge towards the banks - 50 - 60 days
- Propel point redemption - sometimes Zaggle must give them redemption upfront – 30 days