Zaggle Prepaid Share Price Drops 40% from 52-Week High – Check Details

Zaggle Prepaid

Zaggle Prepaid Share Price Drops 40% from 52-Week High, But Shows Signs of Recovery with Strategic Moves

Zaggle Prepaid’s share price has experienced a sharp and significant decline of nearly 40% from its 52-week high.

This downturn has raised concerns among investors, yet the stock has shown some resilience with a modest recovery, rising by 3% today, following the announcement of a new strategic partnership with Truecaller International LLP.

While this news comes amid a period of volatility for the company, analysts are optimistic about its growth potential, with Bajaj Broking initiating coverage with a ‘Buy’ recommendation, predicting a 30% upside and setting a target price of ₹456 for the stock.

Strategic Growth and Acquisition Strategy

According to Bajaj Broking, the fintech company is demonstrating remarkable growth despite recent stock price fluctuations.

Zaggle’s progress is being driven by strategic acquisitions, the development of new product categories, and its ongoing expansion into new markets.

In a recent move that has caught the attention of market observers, Zaggle acquired a 26% stake in a UPI (Unified Payments Interface) switch provider, with plans to increase its stake to 42%.

This acquisition is expected to strengthen Zaggle’s position within the highly competitive digital payments sector, as UPI adoption continues to soar in India.

In addition to its UPI switch acquisition, Zaggle has been diversifying into other segments of the fintech ecosystem.

For example, the company has expanded into fleet management services through its subsidiary Zatix, which provides technology-driven solutions for businesses managing vehicle fleets.

This diversification helps reduce Zaggle’s reliance on one revenue stream and enhances its overall market presence.

Furthermore, Zaggle is eyeing international payment solutions as another growth avenue, indicating its ambition to broaden its global footprint and tap into growing demand for seamless cross-border transactions.

In line with its aggressive expansion strategy, Zaggle is also exploring potential mergers and acquisitions (M&A) to boost its portfolio and strengthen its competitive edge.

These efforts underscore Zaggle’s commitment to evolving into a multi-faceted fintech powerhouse. As the fintech industry continues to expand rapidly, Zaggle’s strategy of diversification through acquisitions and new product offerings positions it as a dynamic player in the space.

Positive Outlook from Analysts and Brokers

Bajaj Broking’s optimistic view on Zaggle’s future is reinforced by the company’s strong foothold within India’s fast-growing fintech sector.

The brokerage highlights Zaggle’s strategic partnerships with several banks, its diverse revenue streams, and its ambitious growth plan.

The firm projects a robust revenue growth of 58-63% over the next few years, driven largely by increased adoption of Zaggle’s solutions by corporates.

This corporate adoption, the firm believes, will be key to Zaggle achieving its revenue goals and expanding its market share in India’s booming digital payments landscape.

The brokerage also points to Zaggle’s commitment to profitability, with an expected EBITDA margin of 15-16% by FY27.

This focus on driving profitability over the long term is likely to reassure investors, as it demonstrates the company’s intent to not only grow rapidly but also manage its costs effectively and sustainably.

In its report, Bajaj Broking stated, “Zaggle presents a compelling investment opportunity. Based on a FY27 PE multiple of 31x and an estimated FY27 EPS of ₹14.72, we initiate a BUY recommendation on the stock with a target price of ₹456.”

This target price represents a substantial upside from its current levels, which analysts see as undervalued given the company’s growth prospects and diversified business model.

The growth of India’s fintech market, alongside Zaggle’s strategic initiatives, positions it well to capture a larger share of the market and drive shareholder value in the coming years.

Technical Analysis and Market Sentiment

While the company’s fundamental outlook is positive, technical analysts have expressed caution given the recent fluctuations in the stock’s price.

Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, provided insights into the current price movement of Zaggle’s stock.

He noted that since February, Zaggle’s share price has been trading within a narrow range between ₹320 and ₹380, forming a channel pattern.

In his view, the next directional move in the stock will occur only when the price breaks out of this established range.

According to Bhosale, if the stock breaks above ₹380, it could experience an upward movement toward ₹425. Conversely, a break below ₹320 could drag the price back toward ₹285, which could signal further downside risk.

As with any technical analysis, Bhosale recommends that investors closely monitor key support and resistance levels, as a breakout or breakdown from this range will dictate the future price trajectory.

Adding another layer of insight, Anshul Jain, Head of Research at Lakshmishree Investment and Securities, commented on the price action after the stock’s steep correction.

Following a buying climax at ₹590, Zaggle’s share price has corrected by approximately 46.45% in just 10 weeks, forming a base over the past six weeks within a rectangle pattern between ₹376 and ₹315.

Jain notes that while the stock has found support in this range, the falling 10-day, 20-day, and 50-day exponential moving averages (EMAs) suggest that the pattern is more likely a continuation rather than a reversal, increasing the chances of a breakdown below ₹315.

“If the stock breaches ₹315 and sustains below this level, we could see further downside momentum,” said Jain.

He also emphasized that traders should watch for an increase in volume to confirm the direction of any breakout or breakdown from the current range.

The technical indicators suggest that while a recovery might be possible, the risks of further downside remain, especially if the stock fails to hold above key support levels.

The Bigger Picture: Zaggle’s Position in the Fintech Ecosystem

Despite the short-term volatility, Zaggle Prepaid remains a strong player within India’s rapidly expanding fintech ecosystem.

The company’s strategic initiatives, including acquisitions, partnerships, and diversification into new sectors, align with the broader trends driving growth in the digital payments and financial services industries.

As India continues to embrace digitalization, companies like Zaggle that offer integrated payment solutions, expense management tools, and business-focused financial products are well-positioned to capitalize on the ongoing shift towards cashless transactions.

Moreover, the growing adoption of UPI, which Zaggle is directly involved with, provides a solid foundation for future growth.

With Indian consumers increasingly turning to digital payment methods, especially mobile wallets and UPI-based transactions, Zaggle’s investments in UPI-related infrastructure and its efforts to expand globally could provide long-term benefits.

Final Remarks

Zaggle Prepaid’s stock may have been hit hard by recent market fluctuations, but the company’s strong growth strategy, backed by strategic acquisitions, new product developments, and an expanding global footprint, makes it a promising player in the fintech space.

With a diversified business model, strong revenue growth projections, and an emphasis on profitability, Zaggle is well-positioned to recover from recent declines and capitalize on the booming fintech market.

As analysts closely monitor technical indicators and market sentiment, the stock’s future remains highly contingent on its ability to break key price levels, particularly the ₹380 resistance and ₹315 support.

Investors should be cautious but optimistic, considering both the long-term growth story and the potential short-term risks tied to the stock’s technical patterns.