TANLA PLATFORMS LTD - Q2 FY 21 RESULTS & REVIEW - FUTURE OUTLOOK - DT 06 01 21

 

TANLA PLATFORMS LTD

Q2 FY 21 RESULTS & REVIEW

06 01 21

Tanla is a Hyderabad based company, established in 1999. It is a largest CPaaS provider, handling over 250 billion business communications annually with a market share of ~70%.

Tanla is innovating the way the world communicates, continuously raising the bar through enhanced speed, ease, and simplicity of Cloud Communication solutions, adopting cutting-edge technologies like blockchain, Artificial Intelligence, Machine Learning to meet the discerning needs of a diverse clientele, from enterprises to carriers across geographies.

 

Tanla is working with all leading Telcos in India creating India’s first Telecom Blockchain Network. 

 

QUARTERLY RESULTS

 

 

Tanla Platforms (in Rs. Cr.)	Sep '20	Jun '20	Mar '20	Dec '19	Sep '19	YOY	QOQ
Net Sales	583	456	522	539	487	20	28
Final NPT	81.5	78.6	-89	0.68	-47	273	3.64
Equity	13.6	15.23	14.6	14.59	14.38	-5.42	-10.7
Basic EPS	5.85	5.16	-6.11	0.05	-3.27	278.9	13.37
Employees Cost	23	20	18	18	46	-50	15
Depreciation	9.92	11.49	84.07	70.84	69.24	-85.67	-13.66
Other Expenses	462.88	360.65	445.47	457.09	409.72	12.97	28.35
P/L Before Other Inc., Int., Excpt. Items & Tax	87.61	63.51	-25.49	-7.15	-37.77	331.96	37.95
Other Income	4.74	13.23	3.7	2.23	1.72	175.58	-64.17
P/L Before Int., Excpt. Items & Tax	92.35	76.74	-21.79	-4.92	-36.05	356.17	20.34
Interest	0.09	0.7	1.92	1.84	1.18	-92.37	-87.14
P/L Before Exceptional Items & Tax	92.27	76.04	-23.7	-6.76	-37.23	347.84	21.34
Exceptional Items	--	--	-48.73	--	--
P/L Before Tax	92.27	76.04	-72.44	-6.76	-37.23	347.84	21.34
Tax	10.79	-2.57	16.69	-7.44	8.28	30.31	519.84

 

Cash and cash equivalents at the end of the period

H1 FY21 : 233.91 Cr vs Rs.131.38 Cr in H1 FY 20

 

MP  738.25  

PE   31.55 - SOMEWHAT HIGH 

VOLUME 6,64,976

52 Week Range :  37.1      : 904.9

 

3 year CAGR growth   

Revenue 49.80%

Operating Profit   48.90%

Promoter Group HOLDS 39.92% OF SHARES AND BALANCE BY Public.

 

Tanla  Platforms  Limited,  largest  CPaaS  provider, 

• Revenue was ₹583.2 Cr and increased 20%

• EBITDA was ₹97.5 Cr and increased 210%

• PAT was ₹81.5 Cr and increased 273%

• EPS was ₹5.85 and increased 279%

• ROCE at 47.5% and increased 177%

• EBIDTA to Cash Conversion remained robust at 82%

Gross Margin % increased from 2.8% to 23%YoY

EBITDA % increased from 10.2% to 16.7%

Solid Cash Flow from operating activities at Rs.166.3 Cr

Highest ROCE at 47.5%

Tanla and all its Subsidiaries remain Debt Free

Capital Expenditure was Rs.6.7 Cr

Trubloq handled 70% of the total DLT Traffic (35 Bn)

83 New Customer Opportunities were signed up during Q2 FY 21.

Appointed CTO,CHRO and CMO

52 New Recruitments total is 531 employees

 

Current Ratio : 1.70 (+7.6%)

Quick Ratio   :     1.65%(+13.2%)

Cash Ratio    :     0.50 times (+36.8%)

Price to Book Value     :     5.67 (+475.5%)

ROCE     : 47.5% (+177.4%)

Fixed Assets Turnover Ratio      :     38.67 times

 

To launch new platform on 20 January 2021

Tanla Platforms proposes to launch a cloud native, digital CPaaS platform with global scale on 20 January 2021. This new platform has been conceptualized and patented by Tanla. The United States Patent & Trademark Office has approved three patents for the same. Microsoft Corporation was the development partner who architected & built this platform for Tanla.

 

Tanla and Microsoft will jointly go to market in India and other parts of the world.

 

Tanla Platforms Update: Tanla Included In MSCI India Domestic Small Cap Index | Announcement DT 12 Nov,2020, 04:57PM IST

 

2 PE firms buy stakes in Tanla Platforms from Blackstone arm | News : 17 Nov 2020, 09:11PM IST

 

Capital Group now holds 6.3% while Amansa holds 3% in Tanla. Promoter group’s shareholding will increase to 41.2% post the investment.

 

MIT's endowment fund, Old Bridge Capital buy into Tanla via block deals | News DT 25 Nov 2020, 09:10PM IST  :  The endowment fund of US’s premier research university, Massachusetts Institute of Technology (MIT), bought 985,000 shares and Old Bridge Capital bought 685,000 shares of Tanla, at Rs 524.03 in block deals, market sources told ET.

 

 

"I'm delighted to report highest ever Revenue, EBITDA & EPS in Q2FY21. Our pioneering and dominant market position in CPaaS, in this cathartic phase in Digital, powered the surge in Revenue", commented UdayReddy, Chairman & CEO of Tanla.

Commenting further Uday Reddy said, "Going forward our unwavering focus and investments on platforms & products, brand, customer success and talent, will drive future growth."

 

Business Highlights

•89,203 enterprises 6,339 telemarketers are registered on DLT platform.

•In the first commercial go-live month of Sept 2020, Tanla’s Trubloq handled 70% of the total DLT traffic which is 35Bn.

•Acquired healthy mix of customers from leading verticals (Banking, Financial services, e-commerce, Gaming, OTT etc.) Including established brands to high potential startups.

•83 New Customer opportunities were signed up during Q2FY21, with an annual potential revenue of ~ 76 Cr

 

Tanla’s paid up share capital was 13,60,36,450 equity shares of ₹1/ each on Sept 30, 2020 after a share buyback of 1,66,92,752 equity shares of Re.1 each and allotment of 4,71,645 equity shares of Re.1 each under the Employee Stock Purchase Plan, 2016.

 

The Company has paid an interim dividend of Re.1 per share to the Shareholders as on the Record date on September 18, 2020 aggregating ₹13,57,87,600/-.

 

 

      

Tanla Platforms share price hits new high after MIT, Vantage Equity Fund buy stakes. (Nov 26 News).

 

Price Performance

1 Week         4.07%   

1 Month        -0.85%

3 Months       168.16%      

1 Year           1,032.29%   

3 Years         1,685.37%

 

It was the topmost multibagger of 2020  among smallcaps with a huge 867 percent return. Can the upward journey continue?

Tanla Platforms is a cloud communications provider. It gets its revenue flow from two main sources - platforms and enterprises.

Route Mobile which listed last year also gave a 214 percent return last year to investors.

The acquisition of Karix Mobile from GSO Capital in 2019,  has changed Tanla's business profile.

Karix is the market leader in the Rs 4,000-5,000 crore Communications Platform as a Service (CPaaS) space, with an estimated 30 percent share. CPaaS players enable enterprises to send OTPs, transaction alerts, and flight status info to end-users.

"Unlike P2P messages that are declining globally due to the prevalence of OTT players like WhatsApp, application-to-person (A2P) SMS has been growing at 18-20 percent.

Regulators prefer SMS due to its ubiquity and higher security.

Further, WhatsApp costs ~2.5x an SMS, for enterprises in India. Though this may change over time, it would add another channel of revenue for CPaaS providers (as also seen globally). Telcos directly sell platforms to enterprises, but our interactions with enterprises and telcos themselves suggest that CPaaS providers are more agile with quicker response time," IIFL Securities explained in its research note in December 2020.

Tanla Platforms is a leading communications provider, enabling businesses to communicate with their customers and stakeholders. Its cloud-based platforms provide ease of connectivity to enterprises and aggregators, with a plug-and-play approach. Cloud communication offers enterprises omnichannel solutions that combine voice, messaging, and data over telco networks.

Tanla gets its revenue flow from two main sources - platforms and enterprises. Its platforms are deployed with major telcos in India. It serves enterprise customers across verticals such as BFSI, social media, e-commerce, government sector, and aggregators.

"Cloud-based communication platform has changed the way to do remote business under this pandemic situation like COVID-19. Interestingly, companies like Route Mobile, Tanla Platform and Affle India counters outperformed in small-cap space all have similar business models based on clouds platform but comparatively Tanla was significantly undervalued to other listed peers," said Prashanth Tapse who feels Tanla came under limelight after the world's largest blockchain solution Trubloq, deployed by Tanla for the Indian telecom industry which was launched in September 2020.

In addition to the healthy growth in legacy businesses, the blockchain platform and the impending launch of an enterprise-grade platform would drive 24 percent and 50 percent revenue and underlying EPS CAGR respectively over FY20-23, the brokerage feels.

"Tanla is a net cash company with an asset-light business model and a healthy free cash flow generation profile. A long-standing relationship with telcos and enterprises is positive. An increase in use cases, up-selling to existing clients, new client additions, and overseas expansion would drive growth. More value-added services would aid margin," said IIFL Securities.

The brokerage feels the stock trades at 27x 1YF PER, quite attractive versus listed peers in India and globally. So it advised buying the stock with a target price of Rs 859, implying a 24 percent potential upside from current levels.

The key risk pointed out by IIFL is Tanla's significant exposure to Vi. "Tanla is increasing its presence in other telcos; but if Vi collapses, there could be some short-term pain."

Prashanth Tapse of Mehta Equities believes booking profits is an art in such overwhelming performance from March 2020 till date, hence he advised investors to book the majority of the holding.