Tanla Platforms Limited Q1 FY23 Earnings Conference Call Insights

Key highlights from Tanla Platforms Limited (TANLA) Q1 FY23 Earnings Concall

Q&A Highlights:

• Aniket Pande of ICICI Securities asked that on margins, apart from the currency headwind, if TANLA is seeing increased pricing cuts in the industry. Deepak Goyal ED said that the pricing environment per se was overall stable. TANLA didn’t see any pricing competition as such. TANLA saw margins going down in 1Q, but that impact may be there for some part in Q2 also. But going forward, TANLA don’t see any issue.

• Ashish Rathi from Lucky Investments asked about NASSCOM regulation of in-app notification instead of SMS if it impacts TANLA’s business model. Uday Reddy CEO said the in-app is not reliable and it may take a bit of time. So TANLA is not seeing any challenge there.

• Ashish Rathi from Lucky Investments enquired what percentage of revenue comes to TANLA from SMS for Banks and fintechs combined. Uday Reddy CEO clarified exact numbers cannot be given. But roughly about 30% is where it is.

• Ashish Rathi from Lucky Investments also enquired about the security aspect of in-app notification vs. SMS. Uday Reddy CEO replied that it is proven that SMS is more secure, both in terms of technology and so on and so forth. This is the reason RBI has mandated only SMS for OTPs.

• Anil Sarin of Centrum asked how much is spent by TANLA on tech upgradation and if there is more scope to spend for the rest of the year. Uday Reddy CEO replied that the company spent around INR15-20 crore that is already capitalized in 1Q23. It’s a one-off expense.

• Miraj Shah from Dalal and Broacha asked about the one-time one-off client impact, if TANLA is expecting to recoup this from same customer or new customer. Uday Reddy CEO replied that from the same customer TANLA won the WhatsApp business. So it’s going to be recovered from the same customer through different services.

• Amit Chandra with HDFC Securities asked about the Wisely roadmap over the next one year.  Uday Reddy CEO replied that 45 billion is the TAM for Wisely and TANLA is hovering around 2 billion. There is a long way to cover, so there’s huge potential for Wisely platform.

• Deepak Chokhani asked about the key levers to push the international business. Aravind Viswanathan CFO said it’s clearly a technology play. It’s not a cost play, but a differentiation play.

• Amit Mishra asked about losing wallet share from big clients and big margin erosion. Uday Reddy CEO said TANLA closed 3 largest partnerships in the last 9 months. VIL, once it goes live is a long term deal. Secondly, Truecaller is exclusively available only in Wisely. TANLA is going to get back to 20% EBITDA margins as soon as possible.

• Amit Mishra enquired about the timeframe of GTM for global markets. Uday Reddy CEO said when the strategy works for India that strategy works for global markets. TANLA said it’s not in a great hurry to expand for the sake of it. So expanding the global market is not an issue. It’s a matter of time.