Buy Tanla Platforms, target price Rs 1900: HDFC Securities

HDFC Securities has buy call on Tanla Platforms with a target price of Rs 1900. The current market price of Tanla Platforms Ltd. is Rs 1490. Time period given by analyst is one year when Tanla Platforms Ltd. price can reach defined target.

Tanla Platforms Ltd., incorporated in the year 1995, is a Small Cap company (having a market cap of Rs 20686.94 Crore) operating in IT Software sector.

Tanla Platforms Ltd. key Products/Revenue Segments include Software Services for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 889.01 Crore, up 5.24 % from last quarter Total Income of Rs 844.76 Crore and up 35.41 % from last year same quarter Total Income of Rs 656.54 Crore. Company reported net profit after tax of Rs 158.00 Crore in latest quarter.


Investment Rationale
Tanla Platforms is expected to report a weak quarter, both platform and enterprise segment will decline 3.0/1.5% QoQ led by seasonality. Revenue is expected to decline 1.6% QoQ following two strong quarters of growth. The EBITDA margin is likely to decline 49 bps to 22.1% due to 50bps decline in enterprise GM (platform GM will remain flat at 90%). The revenue from true caller deal and wisely platform (VI deal) will start contributing in Q1FY23E. The brokerage expects the growth momentum in Enterprise/Platform to continue (+18/28% FY22-24E CAGR) driven by rising marketing and transactional messaging traffic. It remains positive on the CPaaS growth prospects and maintains BUY rating on Tanla with a TP of INR 1,900, based on 35x FY24E EPS.

Promoter/FII Holdings
Promoters held 43.74 per cent stake in the company as of 31-Mar-2022, while FIIs owned 14.96 per cent, DIIs 1.54 per cent.