Tanla Platforms tanks 20%, hits 52-week low on weak Q1 earnings

Shares of Tanla Platforms hit a 52-week low of Rs 731 as they tanked 20 per cent on the BSE in Tuesday's intra-day trade. Investors dumped the shares after the company reported a weak operational performance for the quarter ended June 2022 (Q1FY23). The stock of the software products company has fallen below its previous low of Rs 790, touched on September 21, 2021.

In the past three months, the market price of Tanla Platforms has halved, falling 50 per cent, as against a 3.3 per cent fall in the S&P BSE Sensex. It had hit a record high of Rs 2,094 on January 17, 2022.

At 09:53 AM, the stock traded 17 per cent lower at Rs 754.55, as compared to a 0.56 per cent decline in the benchmark index. Trading volumes on the counter jumped nearly 10-folds with a combined 3.65 million equity shares changing hands on the NSE and BSE till the time of writing of this report.

Tanla Platforms is one of the world's largest CPaaS players. It processes more than 800 billion interactions annually. About 63 per cent of India's A2P SMS traffic is processed through Trubloq, making it the world's largest Blockchain use case.

For Q1FY23, Tanla Platforms reported a 600 bps year-on-year (YoY) and sequential contraction of earnings before interest, taxes, depreciation, and amortization (ebitda) margin at 16 per cent. The ebitda margin was impacted by operational headwinds such as market disruption, modernization of the company’s legacy systems and foreign currency impact of Euro depreciation, Tanla Platforms said.

The company's organic revenue growth of 28 per cent YoY was a multi-quarter low. It reported revenue of Rs 800 crore during the quarter, led by increased volumes in domestic business and faster growth in OTT channels. On quarter-on-quarter (QoQ) basis, revenue declined 6 per cent from Rs 853 crore in Q4FY22. Profit after tax was down by 4 per cent YoY and 29 per cent QoQ at Rs 100 crore.

However, analysts at HDFC Securities expect the growth momentum in enterprise/platform to continue (+18/34 per cent FY22-24E CAGR), driven by rising marketing and transactional messaging traffic. The enterprise market share will be maintained (Karix at 30 per cent) while the platform share can come down. The margins will moderate in the near term, given higher competition and telcos demanding higher revenue share, the brokerage firm said.