Zaggle Prepaid To Receive New Contracts Under Mastercard Deal Soon, Says CEO Godkhindi

The seven-year contract that Zaggle Prepaid Ocean Services Ltd. signed with MasterCard Technology Pvt. recently will result in inflow of new contracts soon.

In November, Zaggle announced entering into an agreement with Mastercard for seven years for its product distribution. Under the agreement, Mastercard will recommend the Zaggle SaaS platform as well as the payment and card products to corporate customers and other ecosystem entities on referral basis.

Talking to NDTV Profit about the deal, Zaggle’s Managing Director and Chief Executive Officer, Avinash Godkhindi, said that the agreement is "very valuable" and a “great win” for the company.

“MasterCard went through an extensive process of evaluating a whole host of spend management companies before they zeroed in on Zaggle to be able to take the solution to their ecosystem per se. This is a great win for us, and this is something which can be very valuable for us in the medium to long term. Short term as well, because this is basically, we have already integrated with Mastercard, the PDF files, etc.,” Godkhindi added.

The top executive revealed that contracts under the partnership will start flowing in for Zaggle very soon.

“This is basically a partnership where contracts should start flowing in pretty soon; as early as next quarter,” he said.

Godkhindi explained that the compounded growth guidance of 50% for FY25 and FY26 did not take into account the agreement with Mastercard.

“The way we look at our numbers is very conservative. That which is absolutely in the pocket is the only thing that we give as guidance to the street. The FY25 number, we've given a guidance of 50% to 55%, while internally, we believe we could possibly do, a bit better than that. We have been very conservative about FY26 by saying we'll double our FY24 numbers. By the looks of it, we will be able to do much better than that,” he said.

The Zaggle MD said that the company has given an Ebitda margin guidance of 15-16% in the next three to four years.

“These sorts of contracts definitely help, because they actually allow you to add additional high quality revenue and gross margins without any significant addition of cost to add these contracts,” he added.

The agreement will be margin accretive, indicating that the company is likely to see an improvement in its operating profit margins, or gross profit margins, following the deal with Mastercard, the MD said.

“MasterCard's expectation is that anytime a card is given—a corporate credit card, a prepaid card, or even a debit card—the card is a Mastercard-issued card. They are happy with any partner bank, domestically and internationally,” he said.

Shares of Zaggle Prepaid Ocean Services opened slightly higher at Rs 507 on Wednesday. In rangebound trade, the stock was trading 0.3% lower at Rs 504.70 apiece at 9:38 a.m., compared to a 0.38% advance in the Nifty 50.