Tanla goes "la,lal,la!"

Tanla Platforms is trading 2.56% higher at Rs. 594.15 on the BSE, gaining Rs. 14.85 against its previous close of Rs. 579.30. The stock opened at Rs. 582.05 and touched an intraday high of Rs. 599.90. Trading volume stood at 1.15 lakh shares, with turnover of Rs. 6.78 crore and a market capitalisation of Rs. 7,880.45 crore. Market depth showed sell orders of 44,640 shares against buy orders of 24,070 shares, suggesting some profit booking despite the positive price movement.

Trigger

• Strong Q2 FY27 consolidated results announced on October 27.
• Revenue rose 25.3% YoY and 10.2% QoQ to Rs. 1,351.7 crore.
• Gross profit increased 23.1% YoY to Rs. 353.1 crore.
• EBITDA grew 20.8% YoY and 6.6% QoQ to Rs. 214.3 crore.
• PAT increased 17.1% YoY and 3% QoQ to Rs. 146.4 crore.
• Enterprise Communications revenue grew 27.2% YoY to Rs. 1,247 crore.
• Digital Platforms revenue increased 6.4% YoY to Rs. 104.7 crore.
• Board declared an interim dividend of Rs. 6 per share.
• Free cash flow stood at Rs. 231.6 crore, with cash reserves of Rs. 1,447.4 crore and zero debt.

The biggest growth driver was Enterprise Communications, which benefited from higher spending by existing customers and strong adoption of WhatsApp-based business messaging. WhatsApp volumes doubled both YoY and QoQ, while revenue retention stood at 119%, indicating that existing customers are spending more on Tanla's services. The acquisition of ValueFirst's international operations also contributed Rs. 28.5 crore to quarterly revenue, strengthening the company's presence overseas.

However, profitability did not grow as quickly as revenue. EBITDA margin slipped to 15.9% from 16.5% a year earlier, as the revenue mix shifted towards the relatively lower-margin Enterprise Communications business. The newly acquired ValueFirst overseas operations, which currently operate at lower profitability, also weighed on margins. This explains why PAT growth of 17.1% lagged revenue growth of 25.3%.

At the current price, the stock trades at a consolidated PE of 14.22 times, against a standalone PE of 46.86 times. While consolidated valuations appear relatively reasonable, margin recovery, faster growth in the high-margin platform business and integration of ValueFirst remain key factors to monitor. The higher sell quantity in market depth also suggests that investors are booking some profits following the results.