Tanla Platforms share price crashes: Stock plunges 36% in 2-day post weak Q1 results – brokerage recommends this

Tanla Platforms share price crashes: Shares of small-cap IT company Tanla Platforms were locked in lower circuit of 20 per cent and hit a new 52-week low of Rs 584.8 apiece for the second session in a row on the BSE on Wednesday.  

Witnessing a free fall, the stock in the last two trading sessions has plunged over 36 per cent, mainly on the back of weak June quarter results on all metrics. 

The company’s profit declined by around 4 per cent year-on-year (YoY) and nearly 29 per cent quarter-on-quarter (QoQ) to Rs 100.4 crore, while total income gained almost 28 per cent YoY, and slipped over 6 per cent (QoQ) to Rs 804.6 crore in the first quarter of the financial year 2022-23.   

“We are progressing well on our one platform strategy-Wisely. Q1 had some operational headwinds in the Enterprise business, but we have our building blocks in place to accelerate our momentum in the coming quarters,” Uday Reddy, founder chairman & CEO, Tanla Platforms Limited said.  

Overall, the company reported mixed performance for the quarter, said YES Securities, adding that the revenue was inline, EBITDA margin sharply below estimates on many operational headwinds such as pricing pressure in few pockets, downtime due to modernization of platform and cross currency headwinds.  

YES Securities maintained a Buy rating on the stock with revised target price of Rs 1,218 per share, implying an upside of over 108 per cent, based on 22x on FY24E EPS. Tanla Platforms remains a leader in CPaaS space in India, growing faster than the industry, the brokerage said.  

Tanla was founded in 1999. It was the first company to develop and deploy A2P SMSC in India. The company today is one of the world’s largest CPaaS players. It processes more than 800 billion interactions annually and about 63% of India’s A2P SMS traffic is processed through Trubloq, making it the world’s largest Blockchain use case.