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HDFC Securities Institutional Equities
Tanla Platforms Ltd. in the Mobile World Congress held in February 2024 launched several products and platforms, which will set the path for the next phase of growth. Tanla is a market leader in the domestic messaging space with a 45% market share and it is now focusing on scaling revenue from WhatsApp, RCS and Truecaller.
The partnerships with Meta (WhatsApp) and the launch of the MaaP platform for higher adoption of Google RBM (RCS business messaging) are promising.
The adoption of conversation commerce by large enterprises is driving WhatsApp growth (OTT is ~13% of revenue and up seven times YoY in Q3).
The enterprise segment growth will be driven by-
continued growth in transactional SMS traffic, led by UPI and digital transactions,
stable ILD, and
a surge in OTT revenue (WhatsApp, RCS and TC).
The growth in the platform segment will be powered by Wisely platforms and the launch of the next-generation DLT platform Trubloq.ai. The Wisely anti-phishing platform is a promising product with high growth potential.
The company will maintain the margin profile, the integration of the low-margin VF Middle East business will be done in Q1, and we expect the Ebitda margin to be in the 19- 20% range.
The full impact of the VI network deal exit will be reflected in Q1 FY25E. We expect revenue/earnings per share compound annual growth rate of 19/20% over FY24-26E.
We reduce our EPS estimate by ~3% for FY25/26E to factor in near-term weakness.
We maintain our Buy ratings and assign a target price of Rs 1,300 based on 23 times FY26E EPS. The stock trades at a price/earnings of 20/16 times FY25/26E and generates return on equity of ~30%.
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