The stock crashed 20 per cent for straight two sessions after the company posted a massive 81 per cent year-on-year (YoY) fall in consolidated net profit to Rs 100.4 crore in the June 2022 quarter. It had registered a net profit of Rs 539.2 crore in the corresponding period last fiscal.
Total revenue from operations decreased to Rs 800.10 crore for the quarter ended June 2022 as against Rs 3,206 crore in June 2021, down by 75 per cent YoY.
However, Yes Securities believes that Q1 is a seasonally weak quarter and that led to a sequential dip in revenue. The Wisely platform is shaping up nicely and would drive revenue growth for the platform segment in FY23, it said.
The brokerage firm added that the company remains a leader in CPaaS space in India, growing faster than the industry. The adoption of CPaaS based A2P messaging across industries continues to drive volume growth for both enterprise and platform segments. It expects EBITDA margin to improve going ahead led by improved execution. Platform segment (higher gross margin) growing faster than the enterprise segment will also support margin going ahead, it said.
Yes Securities has a ‘Buy’ rating on the stock with a revised target price of Rs 1,218 per share, signalling a potential upside of over 107 per cent in the counter, from its previous close of Rs 585.70. It has reduced the target PE multiple from 30x to 22x to account for lower margin assumption and higher cost of capital (WACC) in the environment of high macroeconomic uncertainty.
Securities also has a ‘buy’ call on Tanla Platforms with a target price of Rs 1,040. It also noted that revenue was down due to seasonality and margin dropped due to client-specific issues and higher competition.
The platform business will continue to deliver strong growth, with the ramp-up of Wisely (VI and Truecaller). The brokerage expects the enterprise business to clock 15 per cent volume growth and the GM will be in the 18-19 per cent range due to increasing competition. Also, the management is confident about expanding the EBITDA margin to 19-20 per cent in the next two quarters.
Long-term investors have made big gains by investing in this stock as it has surged over 10,000 per cent in the last ten years. The scrip traded 4 per cent higher at Rs 609.35 on BSE. Market cap of the firm rose to Rs 8,271.65.
Uday Reddy, Founder Chairman and CEO, Tanla Platforms, said, “While Q1 did not go in the direction we would have liked, it takes nothing away from my conviction of how exciting the future is. Our building blocks are coming together, and we are just getting started. We are staying true to our strategy of ‘build over buy’. While the markets are moving from pure growth companies to companies with profitability and cash flow, we have always been on the path of driving profitable growth with strong free cash flows.”
Promoters held 43.74 per cent stake in the company as of 30 June 2022, while FIIs owned 14.83 per cent, DIIs 1.4 per cent.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)