Shares of Zaggle Prepaid Ocean Services Ltd. experienced a significant downturn in Monday's trading, crashing 20% to reach a 52-week low of Rs 160.45. This dramatic fall reflects a year-to-date decline of 53.96% for the stock.
Two Key Factors Drive Zaggle Stock Fall
The sharp decline in Zaggle's stock can be attributed to two major developments. Firstly, the company reported a subdued performance for its June quarter (Q1 FY27). Secondly, an appeal filed by Zaggle against an income tax demand for the assessment year (AY) 2022-23 was dismissed.
Q1 Performance Disappoints Analysts
Equirus Securities highlighted Zaggle's 'soft' Q1 FY27 results. Consolidated operating revenue increased 27.5% year-on-year to Rs 420 crore, falling 8.8% short of Equirus's estimates. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) rose only 1.3% year-on-year to Rs 30.9 crore, with margins contracting to 7.3%.
Net profit (PAT) saw a substantial 32.9% year-on-year decline, settling at Rs 17.5 crore. This was partly impacted by approximately Rs 3 crore in DICE acquisition costs incurred without corresponding revenue in the quarter.
Despite the Q1 setback, Zaggle's management maintained its FY27 consolidated revenue growth guidance of around 40%, anticipating DICE revenues to commence from Q2 FY27 and fully pick up by Q3 FY27. The company also restructured the DICE acquisition as an asset purchase for Rs 68 crore, down from the initial Rs 123 crore, integrating around 100 employees into Zaggle's payroll.
Income Tax Appeal Dismissed
In a separate development, Zaggle informed stock exchanges that its appeal against an income tax demand for AY 2022-23 was dismissed by the Commissioner of Income Tax (Appeal) on August 14, 2026. The company had previously disclosed on May 24, 2024, an additional tax demand of Rs 4,09,15,780 following an assessment order by the I-T department.
Zaggle expressed its belief in having strong grounds to defend its position and stated its intention to pursue the matter further before the appropriate appellate authority.