Mehabe score: 7 G Factor: 3 Piotski Score: 9 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 9.
Description
Tanla Platforms Ltd (formerly Tanla Solutions Ltd) is a cloud communications provider enabling businesses to communicate with their customers and intended recipients. It is headquartered in Hyderabad, India. It is a global A2P(application to person) messaging platform provider. # #
Main Points
Market Position
Co. is one of the world’s largest CPaaS players, it processes more than 800 billion interactions annually and about 70% of India’s A2P SMS traffic is processed through its distributed ledger platform-Trubloq, making it the world’s largest Blockchain use case. #Site:TANLAMain Symbol:TANLA
Stock trades at 965.0, above its 50dma 871.51. It also trades above its 200dma 718.58. The stock remains bullish on techicals
The 52 week high is at 1030.00 and the 52week low is at 98.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has delivered good profit growth of 108.13% CAGR over last 5 years
-Debtor days have improved from 77.10 to 58.17 days.
-Promoter holding has increased by 1.07% over last quarter.
-‘s median sales growth is 26.83% of last 10 years
Weakness
– Stock is trading at 14.70 times its book value
– has a low return on equity of 9.70% for last 3 years.
Competition
– The industry trades at a mean P/E of 34.5x. Happiest Minds trades at the industry’s max P/E of 135.28x. TANLA trades at a P/E of 36.8x
– Industry’s mean G-Factor is 3.8 while the mean Piotski score is 9.0. TANLA has a G-Factor of 3 and Piotski scoreof 9.
– Average 1 month return for industry is 21.8%. The max 1- month return was given by Happiest Minds: a return of 62.57 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 626.0 cr compared to Rs 456.0 cr for period ended Jun 2020, a rise of 37.3%
Operating Profits reported at Rs 135.0 cr for period ended Jun 2021 vis-vis 75.0 for period ended Jun 2020 .
Operating Margins expanded 511.8 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 7.68 compared to Rs 7.54 for previous quarter ended Mar 2021 and Rs 5.16 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2512.0 cr for period ended TTM vis-vis sales of Rs 2341.0 cr for the period ended Mar 2021, a growth of 6.8%. The 3 year sales cagr stood at 35.8%.
Operating margins expanded to 20.0% for period ended TTM vis-vis 19.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 382.0 cr for period ended TTM vis-vis sales of Rs 356.0 cr for the period ended Mar 2021, rising 6.8%.
Company recorded a healthy Net Profit CAGR of 133.5% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 561.0 cr for period ended Mar 2021 vis-vis Rs 239.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 45.0% compared to 10.0% over the last 3 Years. – The stock has given a return of 823% on a 1 Year basis vis-vis a return of 196% over the last 3 Years. – The compounded sales growth on a TTM bassis is 21% vis-vis a compounded sales growth of 44% over the last 3 Years. – The compounded profit growth on a TTM basis is 314% vis-vis a compounded profit growth of 176% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 12.96% vis-vis 11.82% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 43.2% vis-vis 43.69% for Mar 2021
Conclusion
– is almost debt free.
– has delivered good profit growth of 108.13% CAGR over last 5 years
-Debtor days have improved from 77.10 to 58.17 days.
-Promoter holding has increased by 1.07% over last quarter.
-‘s median sales growth is 26.83% of last 10 years – Stock is trading at 14.70 times its book value
– has a low return on equity of 9.70% for last 3 years.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 871.51 and is trading at 965.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
