Experts are optimistic about Hyderabad-based cloud communications company Tanla Platforms due to the share buyback plan as well as better-than-expected performance in Q2 results. Stock that is currently . performing less than 800 each has the capacity to grow 1,000 points in the next few months. Tanla is already a multi-bagger stock with nearly 3x profit in the last two years.
During Muhurta Trading Hours, trading is taking place around Tanla Platforms 788.75 each gained around 1% on the BSE at around 6.27 pm. store has reached a high level 793.20 each in intraday trade.
in present Market Price, Tanla’s valuation is approx. 10,695 crores on Dalal Street.
Last week closed on Friday on Tanla’s stock 781 each on BSE. The company announced its financial performance on October 20 for the quarter ended September 30, 2022 (Q2FY23).
In Q2 of FY23, on a standalone basis, Tanla posted a net profit of 120.71 crore — increased manifold from 34.57 crore in Q2FY22 and 17.60 crores in Q1FY23. Revenue from operations, however, remained low Q2FY23 vs . 284.27 crore in 294.36 crore in Q2FY22 and 323.32 crore in Q1FY23.
On consolidated basis, the company’s PAT was 110.44 crores, and the revenue from operations was 851.04 crore in Q2FY23. While PAT grew sequentially, though declined year-on-year, revenue, on the other hand, was better on a quarterly and year-on-year basis.
Uday Reddy, Founder President and CEO, Tanla Platforms Ltd., said, “Our significant investments in the intelligentization of platforms for digital interactions are seeing strong traction and we are accelerating our market penetration efforts. Our focus on ESG was recognized by our S&P Global ESG score where we ranked in the top 93-94 percent of the industry.
The company has announced a share buyback plan that is no more 170 crores at the cost of 1,200 per share. The company has fixed October 25 as the record date for the buyback.
Should you buy Tanla shares?
As per HDFC Securities report, Tanla reported better-than-expected revenue and margins were slightly better than our estimate. The enterprise business (+6% QoQ) improved, led by volume growth, ILD price growth and seasonality, offset by ramp-down in a larger domestic account.
Further, the stock brokerage’s note said, “The full impact of the ILD price hike will be visible in Q3 and the impact of the large on-account decline has dissipated, paving the way for healthy growth in the enterprise business.” Margins have improved by 82bps to 17.2% (versus our estimate of 17.1%) and management expects an exit range of 18-19% for the fiscal.
In addition, the note noted that the platform business under Trublok’s leadership delivered strong growth and the ramp-up of new Wisely platforms (Wizly Communicate and OTT). Investing in intelligent platform ( 1.23 billion) is delivering results and reaching the target 1 billion gross profit (~34% of the FY23E platform’s gross profit).
The success of the Wisely platform is seen as the key to accelerating and rerating the stock’s growth.
On valuation, HDFC Securities noted, “We are building in margin recovery but expect it to be below historical levels. We have revised our EPS estimate for FY23/24E to 1.9 per cent on account of ~30 bps margin cut. / is deducted by 1.7%.We have BUY rating with TP of 1,000, on a 22x Jun-24E EPS basis, led by ~15% revenue CAGR and ROE of ~30%. The stock is trading at 22/18x FY23/24E EPS (~30% lower than 5Y average).”
The shares of Tanla on D-Street have gained 172.60% or 2.72 times in two years. stock was close 286 level on October 23, 2020.
In August this year, Tanla declared an interim dividend of 600% overall 6 per equity share for FY23. In FY22, the company paid 20% dividend amount 2 per share for its shareholders.
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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