Though, domestic brokerage and research firm Yes Securities is bullish on the multibagger stock and expects it to double in value as it has Buy rating on Tanla Platforms shares with a target price of ₹1,218 apiece, implying a potential upside of over 100% from current stock level.
“Overall, it reported mixed performance for the quarter. While, the revenue for the quarter was inline, EBITDA margin came sharply below estimates on several operational headwinds such as pricing pressure in few pockets, downtime due to modernization of platform and cross currency headwinds. The Q1 is a seasonally weak quarter and that led to sequential dip in revenue," the note stated.
The company remains a leader in CPaaS space in India, growing faster than the industry. The adoption of CPaaS based A2P messaging across industries continues to drive volume growth for both enterprise and platform segments, the brokerage house highlighted.
“We expect EBITDA margin to improve going ahead led by improved execution. Platform segment(higher gross margin) growing faster than enterprise segment will also support margin going ahead. We estimate revenue CAGR of 21.8% over FY22‐FY24E with average EBIT margin of 19.1%," Yes Securities added.
Net profit in the quarter ended June 30, 2022 (Q1FY23) fell to ₹100 crore as compared to ₹140 crore in the March quarter. Tanla's revenue was 27.7% year-on-year (YoY) however, was down 6.2% from the last quarter (Q4FY22) whereas EBITDA margin decreased 530 bps quarter on -quarter (QoQ) (530 bps YoY) to 16.3%.
The dip in margin was due to operational headwinds such as pricing pressure in select pockets, and downtime due to platform modernization of its legacy systems. Also, cross currency headwinds impacted margin in international business. Hyderabad-based Tanla Platforms provides value-added services in the cloud communications space.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
