Zaggle's income tax appeal dismissed for AY 2022-23

Zaggle Prepaid Ocean Services Limited faces a setback in its ongoing tax dispute after the Honorable Commissioner of Income Tax (Appeal) dismissed its appeal against a demand notice received under Section 156 of the Income Tax Act 1961. The dismissal pertains to the assessment year 2022-23 and was issued via an order dated August 14, 2026.

The development follows a previous disclosure made by the company on May 24, 2024, regarding the initiation of legal proceedings against the tax demand. The current update confirms the adverse ruling at the first appellate level.

Regulatory Context

The disclosure was made pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. It also references SEBI Master Circular HO/49/14/14(7)2025-CFDPOD2/I/3762/2026 dated January 30, 2026. This circular mandates timely updates on material events affecting listed entities.

Next Steps

Zaggle indicated that it believes it has strong grounds to defend its positions in this matter. The company announced it will take necessary steps to pursue an appeal before the appropriate appellate authority. No financial figures or specific amounts related to the tax demand were disclosed in the filing.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-0.22%	-2.69%	-7.90%	-29.85%	-46.50%	+26.68%

Zaggle Prepaid Ocean Services reported a significant contraction in profitability for the first quarter, with net profit falling 33% year-on-year to ₹175 million. The decline occurred despite a robust 28% increase in revenue, which rose to ₹4.23 billion from ₹3.3 billion in the corresponding period last year.

The divergence between top-line growth and bottom-line performance was highlighted by a sharp compression in operating margins. EBITDA increased marginally to ₹309 million from ₹305 million, resulting in an EBITDA margin of 7.30%, down from 9.19% in the prior year.

Metric	Q1 Current	Q1 Prior (YoY)	Change
Revenue	₹4.23 billion	₹3.3 billion	+28.2%
EBITDA	₹309 million	₹305 million	+1.3%
EBITDA Margin	7.30%	9.19%	-189 bps
Net Profit	₹175 million	₹261 million	-33.0%

What the Numbers Show

The data reveals a clear margin dilution trend. While revenue expanded by nearly 28%, EBITDA growth lagged at just 1.3%. This disparity indicates that operating costs or input expenses grew disproportionately faster than revenue during the quarter. Consequently, the company’s ability to convert sales into profit weakened, as evidenced by the nearly 200 basis point drop in EBITDA margin and the subsequent 33% plunge in net profit.