Buy Tanla Platforms; target of Rs 1198: Geojit

Geojit's research report on Tanla Platforms

Tanla Platforms Ltd. is the largest Communication Platform as a Service (CPaaS) player in India. Tanla has two major businesses: Enterprise and Platform, both using blockchain technology to reduce spam and fraud activities and make it easy to integrate with enterprise applications. The revenue grew by 10% YoY, reaching Rs.1,002.2cr, primarily fuelled by OTT channels. EBITDA improved by 3.5% to Rs.188.6cr on a YoY basis due to a consolidation benefit from Valuefirst India. We expect improved revenue in FY25 on new client additions, increased realisation from new and existing customers, and an improvement in volume from OTT business. The company won two deals, one with a global tech leader with Wisely ATP and another one with Google RCS, which will enhance revenue visibility in FY25E. Therefore, we retain our Buy rating with a revised target price of Rs. 1,198 at a PE of 21.5x FY26E adj. EPS.

Outlook

We expect revenue to grow at a CAGR of 16% in FY24–26E, relying on new client additions, increased realisation from new and existing customers, an increase in UPI transactions, and an improvement in volume from OTT business. The increasing adoption of the Wisely platform is expected to drive revenue and margin growth. The company won two deals, one with a global tech leader with Wisely ATP and another one with Google RCS, which will enhance revenue visibility in FY25E. Therefore, we retain our Buy rating with a revised target price of Rs. 1,198 at a PE of 21.5x FY26E adj. EPS.