Add Tanla Solutions, target of Rs 249: IIFL

IIFL has rated Tanla Solutions as 'ADD' with a target price of Rs 249 in its July 15, 2008 research report. "Tanla reported 1QFY09 revenues at Rs 1.67 billion, in line with our expectation of Rs 1.6 billion excluding Openbit. Including Openbit, EBITDA margins were almost flat, and a reduction in other income resulted in a drop of 100bps in net margin."

"The recently-acquired Openbit, which till then had sported an EBITDA margin of 7%, delivered Rs 74 million in revenue, and EBITDA margin improved to 22% in just a month, based on shipment of 1.4 m phones in June 2008, each carrying a licence manager yielding € 0.2. We use this opportunity to rate this stock as ADD, with a DCF-based target price of Rs 249. Openbit, which we believe can constitute 15% of the company’s value, is an upside to our valuation estimates," says IIFL's research report.

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