Multibagger Stock: Tanla Platforms Ltd
Tanla Platforms Ltd
Tanla Platforms: A Decade of Exponential Growth, Current Challenges, and Future Potential
Tanla Platforms, a multinational cloud communications company, has emerged as a compelling success story over the past 10 years, transforming a modest investment of less than Rs 48 thousand into an astounding Rs 1 crore.
This meteoric rise in valuation has not only caught the attention of investors but has also positioned Tanla Platforms as a paradigm of substantial returns through patient, long-term investment strategies.
Historical Performance:
On January 31, 2014, shares of Tanla Platforms were trading at a humble Rs 4.92. Fast forward to the present day, and the stock is commanding an impressive Rs 1037.35.
This extraordinary growth over the past decade has catapulted investors into the millionaire’s club, showcasing the potential for substantial returns over the long term.
Despite experiencing a 6 percent dip in the current year, Tanla Platforms demonstrated exceptional growth in the preceding year.
Within a brief three-month period, the stock more than doubled its investment by over 160 percent. While there is currently a 21 percent decline from its one-year high of Rs 1317.70 on July 24, 2023, market analysts and brokerages maintain an optimistic outlook, underscoring the potential for future gains.
Investor Benefits and Dividend Distribution:
In addition to the capital appreciation, investors are poised to receive further benefits, as Tanla Platforms is set to distribute a dividend of Rs 6 per share on February 5, 2024.
This dividend distribution not only adds to the allure of the stock but also presents an opportunity for investors to secure extra profits by entering the market before the record date.
Challenges and Adaptability:
However, Tanla Platforms has not been immune to challenges. The company faced sluggish growth in the enterprise and platform segments, impacting its revenue in the December 2023 quarter.
A decline in international long-distance (ILD) volumes and reduced VI network revenues contributed to the hurdles faced by the company.
Furthermore, the surge in ILD prices led enterprises to explore alternative communication platforms, such as WhatsApp, posing additional challenges to Tanla Platforms.
Despite these obstacles, Tanla Platforms has exhibited resilience and adaptability. The National Long Distance (NLD) segment, which constitutes half of the company’s revenue, is expected to grow by approximately 15 percent.
This growth is attributed to continued expansion in volume, transactional traffic, and OTP. Initiatives like Wisely and Trubloq are poised to strengthen the platform segment.
Notably, Tanla Platforms has secured its first Wisely ATP (Anti-Phishing Product) deal with a large private bank, signaling a strategic move to mitigate potential setbacks.
Brokerage Confidence and Target Price:
In response to the challenges faced by Tanla Platforms, domestic brokerage firm HDFC Securities has made adjustments to its revenue and earnings per share (EPS) estimates for FY2026.
Despite these revisions, the brokerage maintains its confidence in the stock, retaining a buy rating. The target price set by HDFC Securities is Rs 1350, which is approximately 23 times the estimated EPS for FY2026.
This target price signifies the brokerage’s positive outlook for Tanla Platforms, indicating a belief in the company’s ability to overcome short-term challenges and achieve sustained growth.
Market Analysis and Future Prospects:
Beyond the current hurdles, Tanla Platforms is strategically positioned in a dynamic market. The absorption of the surge in National Long Distance (NLD) prices and the increasing promotional traffic are positive indicators.
NLD, accounting for half of the company’s revenue, is expected to grow by around 15 percent, driven by ongoing growth in volume, transactional traffic, and OTP.
The growth of the platform segment is expected to be supported by initiatives like Wisely and Trubloq. The recently secured Wisely ATP deal with a large private bank represents a significant milestone for Tanla Platforms, showcasing the company’s ability to diversify and adapt to changing market dynamics.
Challenges in Detail:
While Tanla Platforms has witnessed remarkable success, it is crucial to delve deeper into the challenges that the company has faced.
The sluggish growth in the enterprise and platform segments during the December 2023 quarter raised concerns among investors and analysts.
This sluggishness was primarily attributed to a decline in international long-distance (ILD) volumes and reduced VI network revenues.
Furthermore, the surge in ILD prices had a considerable impact on the company’s volumes, as enterprises began exploring alternative communication platforms such as WhatsApp.
This shift in preferences reflected the dynamic nature of the market and the need for companies like Tanla Platforms to continuously innovate and adapt.
Despite these challenges, the company has taken proactive measures to address the issues at hand. The strategic initiatives, including the introduction of Wisely and Trubloq, showcase Tanla Platforms’ commitment to staying at the forefront of technological advancements in the cloud communications industry.
The signing of the first Wisely ATP deal with a large private bank not only boosts the company’s credibility but also positions it as a key player in the evolving landscape of digital communication security.
Analysis of Financial Revisions by HDFC Securities:
In response to the challenges faced by Tanla Platforms, HDFC Securities, a leading domestic brokerage firm, made revisions to its revenue and earnings per share (EPS) estimates for the fiscal year 2026.
The downward adjustment of 8 percent in revenue estimates and 9 percent in EPS estimates reflects the impact of the slowdown in international long-distance (ILD) services, which constitute about 25 percent of the company’s revenue.
While these revisions indicate a recognition of the current challenges, it is essential to note that HDFC Securities has maintained its buy rating on Tanla Platforms.
This suggests that, despite the short-term headwinds, the brokerage remains optimistic about the company’s long-term prospects.
The target price of Rs 1350, set by HDFC Securities, further reinforces this positive outlook, signaling confidence in Tanla Platforms’ ability to navigate through the current challenges and achieve sustained growth.
Market Dynamics and Future Growth Drivers:
In the context of Tanla Platforms, it is crucial to analyze the broader market dynamics and identify potential growth drivers for the company.
The absorption of the surge in National Long Distance (NLD) prices is a positive development. The NLD segment, contributing significantly to Tanla Platforms’ revenue and accounting for half of it, is expected to grow by approximately 15 percent.
This growth in the NLD segment is anticipated to be driven by continued expansion in volume, transactional traffic, and OTP (One-Time Password) services.
As digital communication becomes increasingly integral to various industries, the demand for reliable and secure communication platforms, such as those offered by Tanla Platforms, is expected to remain robust.
The platform segment’s growth is expected to be supported by initiatives such as Wisely and Trubloq. The strategic move to sign the first Wisely ATP deal with a large private bank positions Tanla Platforms as a key player in enhancing cybersecurity in digital communication.
This not only diversifies the company’s revenue streams but also mitigates the potential impact of challenges in other segments.
Final Remarks:
In conclusion, the journey of Tanla Platforms over the past decade showcases the transformative power of long-term investments in the dynamic landscape of the stock market.
From a modest beginning of Rs 4.92 per share in 2014 to the current value of Rs 1037.35, investors have witnessed unparalleled capital appreciation.
Despite short-term challenges, Tanla Platforms remains well-positioned for future growth, supported by strategic initiatives, a diverse product portfolio, and the confidence of market analysts.
The upcoming dividend distribution and the optimistic target price set by HDFC Securities further underscore the potential for sustained success in the years to come. Investors, drawn by the allure of exponential growth and promising future prospects, may find Tanla Platforms to be an intriguing addition to their portfolios.
The challenges faced by the company in the enterprise and platform segments, as well as the adjustments made by HDFC Securities in its financial estimates, highlight the importance of continuous adaptation and innovation in the rapidly evolving technology and communications industry.
Tanla Platforms’ ability to address these challenges and capitalize on future growth drivers positions it as a key player in shaping the future of cloud communications.
As the market dynamics continue to evolve, investors should closely monitor how Tanla Platforms navigates through the current challenges and capitalizes on emerging opportunities.
The company’s commitment to technological innovation, strategic initiatives, and its ability to adapt to changing market conditions will play a pivotal role in determining its trajectory in the years ahead.
