Buy Tanla Platforms; target of Rs 1350: HDFC Securities

HDFC Securities is bullish on Tanla Platforms has recommended buy rating on the stock with a target price of Rs 1350 in its research report dated July 19, 2023.

Broker Research

July 20, 2023 / 10:23 IST

Buy

26 Aug, 2025 12:21

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HDFC Securities' research report on Tanla Platforms

Tanla is expected to witness growth acceleration, led by a revival in the Enterprise business (volume uptick and ILD price hike) and traction in the Platform business (new product launches). The growth in Enterprise business will be driven by (1) a continued surge in transactional SMS traffic, led by UPI and OTP; (2) a price hike of ~30% in ILD rates in Q1; (3) the acquisition of ValueFirst, which will lead to market share gains and pricing power; and (4) client-specific issues being over and enterprise gross margins back at 20% level. The growth in the platform segment will be powered by Wisely platforms and continued strength in Trubloq. Wisely Anti-phishing (ATP) is a promising product, which has received Sandbox approval from TRAI and is under POC with three large banks. The EBITDA margin which was impacted in Q1FY23 has returned to normal level in Q4FY23. The ValueFirst integration in Q2FY24E will impact margins by ~150bps but cost synergies will lead to gradual margin expansion.

Outlook

We expect revenue/EPS CAGR of 24/26% (organic 18/20%) over FY23-26E and upgrade our EPS estimate by 11/12% for FY24/25E to factor in acquisition and growth uptick. We maintain our BUY rating and assign a TP of INR 1,350, based on 23x June-25E EPS. The stock is trading at a P/E of 20x FY25E.

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