Tanla Platforms Limited Q4 FY22 Earnings Conference Call Insights

Key highlights from Tanla Platforms Limited (TANLA) Q4 FY22 Earnings Concall

Q&A Highlights:

• Pranav Kshatriya from Edelweiss Financial Services asked about the growth guidance for the platform business and Enterprise business. Uday Reddy CEO said that TANLA is going to grow on both the enterprise and platform fronts. TANLA added that it’s going to invest a lot of money on its platforms and innovations and expect new announcements in next 11 months.

• Pranav Kshatriya from Edelweiss Financial Services enquired about the reason for capex increase in FY22. Uday Reddy CEO said that for a company of TANLA’s size, the capex spend is very small. In FY23 also TANLA is going to spend equal amount, if not more. TANLA added that it’s going to spend a bit of money on the innovations which is going to accelerate growth.

• Balaji Subramanian from IIFL Capital asked about the status on rolling out consent management around Trubloq by telcos. Uday Reddy CEO said TANLA has deployed and rolled out and delivered the product. But TANLA is seeing a bit of challenges with the standard operating practices which telcos have to sort out among themselves.

• Balaji Subramanian from IIFL Capital also enquired about employee attrition and if any wage cost pressure TANLA is seeing. Uday Reddy CEO replied that TANLA’s core team is pretty intact. However, TANLA is seeing a bit of challenge with the junior folks. The company added that the problem is only with someone who has joined during the COVID time.

• Amit Chandra from HDFC Securities asked about the Wisely platform and the plans internally in terms of revenue contribution. Uday Reddy CEO replied that regarding the overall contribution of Wisely, it’s too early to comment. But the company is very excited about the opportunity. And in the next two months TANLA will showcase the Wisely offer to Vodafone but also the large tech giants globally.

• Amit Chandra from HDFC Securities enquired that on the enterprise business apart from the seasonality, if TANLA is seeing any other headwinds. Deepak Goyal, Chief Business Officer answered that 4Q is pretty normal and in 3Q the company saw some good profitable festive campaigns coming in. Also there were two days less in 4Q compared to 3Q.

• Amit Chandra from HDFC Securities also asked that on the enterprise side, what portion of the business TANLA is getting from the startup ecosystem. Deepak Goyal, Chief Business Officer said TANLA has a strong program to acquire start-ups in India, which has been very successful. Also there is no cut in marketing spend.

• Tanu Poddar of Mount Infra Finance asked about the revenue TANLA gets from the A2P messages per SMS, what would be the charge. Uday Reddy CEO answered that TANLA has not called out pricing because it’s different depending on whether it is international long distance/national long distance. TANLA has broken down its revenues between platforms and enterprise.

• Deepak Poddar from Sapphire Capital enquired about the platform contribution to gross profit in the next 2-3 years. Aravind Viswanathan CFO said that today it’s about 26%. Wisely, is a big bet and TANLA’s strategy going forward is around its single platform strategy. So TANLA expects the platform contribution to keep going up and should see that improvement every year. However, an exact number cannot be given.

• Amit Mishra asked about the areas where the new releases will be coming in, in the next 11 months in the platform business. Uday Reddy CEO answered that TANLA is working on a couple of large products, details of which cannot be revealed. And said that TANLA is also launching some of the additional features on the existing platforms.

• Amit Mishra asked if video capability is integrated in Wisely, thinking about markets outside India. Uday Reddy CEO replied that as of today none of the video platform or products have been integrated. However, in future, TANLA said it will be 100%; video is going to pick up a lot, but a timeline cannot be given.

• Amit Mishra also asked about the tender business, how TANLA is faring there. Deepak Goyal, Chief Business Officer replied that TANLA is doing fairly okay in tender business. TANLA is present in most of the top 10 tech giants. And on pricing, TANLA added that looking at its stable margins, it’s understood that everything is fine.

• Amit Mishra queried if TANLA is losing business because of margins in some places. Deepak Goyal, Chief Business Officer said it’s not losing a business, it’s part and parcel of the business and TANLA is committed to the Rule of 60 and that’s what matters to the company.

• Amit Mishra asked about the revenue model of Truecaller partnership. Deepak Goyal, Chief Business Officer replied that TANLA charges its customers on per transaction basis and it has a revenue share model with Truecaller. On the benefit, the 300 million user base of Truecaller is a very niche segment and Truecaller business messaging sits between SMS and WhatsApp. TANLA added that it’s going to solve lot of business problems of its enterprise customers with Truecaller coming in.

• Amit Mishra also asked about the timeline of the Truecaller partnership contributing to the topline. Deepak Goyal, Chief Business Officer answered that TANLA is going commercially live very soon. So the impact could be seen in the subsequent quarters, probably 2Q23 also.