Tanla Platforms Limited (TANLA) Q4 FY23 Earnings Concall Transcript

Tanla Platforms Limited (NSE:TANLA) Q4 FY23 Earnings Concall dated Apr. 27, 2023.

Corporate Participants:

Ritu Mehta — Head of Investor Relations

Uday Kumar Reddy — Founder, Chairman and Chief Executive Officer

Deepak Goyal — Executive Director and Chief Business Officer

Aravind Viswanathan — Chief Financial Officer

Analysts:

Roank Vora — AUM Fund Advisors LLP — Analyst

Balaji Subramanian — IIFL Capital Ltd. — Analyst

Amit Chandra — HDFC Securities — Analyst

Deepak Chokhani — N/A — Analyst

Mohit Motwani — Nuvama — Analyst

Milind Karmarkar — Dalal & Broacha PMS — Analyst

Sambhav Jain — Vardhaman — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to Q4 FY ’23 Earnings Conference Call of Tanla Platforms Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions]. Please note that this conference is being recorded.

I now hand the conference over to Ms. Ritu Mehta from Tanla. Thank you and over to you.

Ritu Mehta — Head of Investor Relations

Hello, everyone. I hope you and your families are safe and healthy. On behalf of everyone at Tanla, welcome to our Q4 earnings call, joining with us today are Uday Reddy, Chairman and CEO; Deepak Goyal, Executive Director and Chief Business Officer, and Aravind Viswanathan, CFO. Uday will share his perspectives of the business, and strategic progress made by the Company, followed by Deepak who will update us on the enterprise business and Aravind will provide an overview on financials. After opening remarks, we’ll be happy to engage with participants and address their questions.

Before I hand it over to Uday, let me draw your attention to the fact that today’s discussion may feature statements that are forward-looking in nature. All statements other than statements of historical facts could be deemed forward-looking in nature. Such statements are inheritingly subject to risks and uncertainties, some of which cannot be predicted or quantified. A detailed disclosure in this regard is mentioned in the results presentation that is uploaded on our website. Audio recording and transcript will be available on the website.

Now, I hand it over to Uday.

Uday Kumar Reddy — Founder, Chairman and Chief Executive Officer

Thank you, Ritu. Good evening, everyone. Thank you for all of you joining us today. I am joined with Deepak, our Chief Business Officer; and Aravind, our Chief Financial Officer. So we have shared detailed disclosures of our results yesterday and I’m sure all of you had an opportunity to go through the same. While we would be happy to take any questions on Q4 as part of Q&A, our focus in the opening remarks will be to give you a very strategic update on our platform, on the enterprise business. I have been — I’ve been talking about looking at our platform business and enterprise business very independently and we will report EBITDA for these businesses separately going forward. In my opening remarks, I would, I’ll give you a perspective on our platform business whereas Deepak would give a perspective on the enterprise business, and whereas Arvind will share the financial highlights.

So let me talk about the platform business here. So we see a significant secular tailwinds of digital interactions in India. We have seen 3x increase in digital interactions for the last three years and it is accelerating. For example, the number of UPI interactions grew from $1 billion in FY ’18 to $86 billion in FY ’23. Estimates of it will touch around 430 billion in FY ’28. So Tanla is strategically positioned to address this explosion in digital economy, our strategy is to address the entire lifecycle of customers our customers customer in digital plus one. We will help enterprises acquire, transact, retain, and service their end customers through our platform and solutions. This would require addressing multiple buying centers be it Chief Marketing Officer or the Chief Digital Officer who are focusing on acquiring new customers, up-sell, and cross-sell to existing customers, and it always quite high ROI on the marketing spend. The CICO and the Chief Risk Officer are keen on areas like data security, data privacy, spam, scam to ensure that customers are protected. Chief Operating Officer and business heads are focused on seamless transacting experiences for these customers. For example, the OTPs and the E-KYC, payments, etc.

So given our platforms today when we when we walk into any enterprise, every CXO enterprise is a potential customer for us. That is our thought process. We would like to service each and every buying center in an enterprise — in any enterprise. So, we expect the TAM, the total addressable market size for this space to be around 5 billion to 6 billion in India alone by 2027 and if we add a few adjacent emerging markets where we started making inroads such as Middle East and Southeast Asia, the TAM could be around 11 billion in 2027.

So in this backdrop, let me give you a perspective of where we are investing and what is the impact of these investments. I will start with where we are investing in the platform business. We have kind of invested. We have invested 175 crore in FY ’23 in innovations and improvements, which is in our platforms and we have invested a lot of money in the talent and infrastructure, and we have built a separate dedicated team for our customer success team and we are spending a lot of money on our Wisely brand. So we’ll continue to invest in this space going forward but separately in the coming quarters, we will report these investments separately on a quarterly basis.

So let me talk about what we invested and what we have built under-investment, sorry, under innovation, and improvements. So we are focusing on four segments within the digital interaction space which covers all buying centers within an enterprise. So we call it as Wisely Communicate then Wisely Engage then Wisely Protect and Wisely Experience. So when it comes to Wisely Communicate the segment is all about orchestrating and delivering omnichannel safe and encrypted communication to our customers, customers. So when it comes to engagement this segment works across entire customer lifecycle management be it acquisition, cross-sell, upsell, and retention. This segment is mainly targeting a Chief Digital Officer or Chief Marketing Officer of any enterprise. And when it comes to Protect, Wisely Protect, the segment addresses the areas with data security and data privacy, spam and scam and — so especially making all-digital interaction safe and complaint. So when it comes to Wisely Experience providing rich and seamless and delightful customer experience in the collateral digital economy is the focus of this segment. So we have six platforms across these four segments, four subsegments. So our and all our platforms have a specific DNA. They are built for greenfield opportunities. They are built by — they’re getting this entire ecosystem together. They are built for scale; they are built with the appropriate technology and they are built as asset-light platform that are easy to deploy. These are deployed. These are deeply embedded with our customers and it’s very hard to replace our platforms.

So all the platforms are built on Wisely which we have been discussing for the last couple of years. So Wisely is a single platform, a platform on which every other platform is built. This provides us with tremendous speed, agility to develop a new platform. For example, we took 15 months, to build Wisely Communicate, but we took only four months launch Wisely ATP, our anti-phishing platform. Wisely ATP is our patented platform to go phishing and scam and the biggest minus that are threatening the digital economy today. It is our biggest innovation in our history. And the proof-of-concept with the three large banks have been encouraging early results in parallel, we have also showcased the fantastic results of sandbox deployment of ATP platform to TRAI and other regulators, and I am personally very confident with this. This Made in India for World platform will be a game changer to protect one billion-plus users of digitlal economy.

In addition to Wisely ATP, we have delivered 30-plus innovations and improvements across our platform over the past six months. We have witnessed in the state-of-art Kaizen centre to drive continuous improvement in our existing platforms by deploying best-in-class monitoring tools to deliver excellent customer experience, once they are onboard our platforms. So, secondly, we are investing on talent and infrastructure, we have recently invested in building a state of art innovation and experience center in Hyderabad that cost houses around 150 of the India’s top talent in cutting-edge across blockchain, cryptographic and a very big focus on A1/ML. Built over 100,000 square feet area this centre is unique hub of innovation with five garages environment which fuels innovation.

So the third biggest area that we’re investing is the customer success brand. We believe customer access and/or slightly, sorry significantly investing in the dedicated team from the industry to be custodians of our business impact and delight to our enterprise customers. We are also making purposeful investments in building our product brands wisely to stand out as the most trusted brand in digital interactions.

So our significant investments are delivering business and financial impact. Let me elaborate here. So when it comes to business impact collectively, our platforms touch more than one billion lives in India, around 30% of our top 30 — 70 customers use three out of six of our platforms. We have a very high customer retention rate. Increased customer adoption is accelerating in our platform lifecycle. Our first platform SMSC took five years to reach INR25 crores gross margin per annum, our DLT platform the Trubloq reached the INR100 crores milestone in two years whereas Wisely Network which is deployed with Vodafone Idea network reached INR100 crores gross margin within one year and so our Wisely OTT platform, I’m sure will reach INR100 gross margin club in less than 12 months. So we’re pretty excited about these platforms.

So, let me also talk about the financial impact of our investments. Our gross profit in the platform business are growing 20% plus for last the 12 quarters. Our EBITDA margins are upwards of 70%, so we have delivered strong growth at high margins. The platform companies are expected to operate at Rule of 60, which is revenue growth plus EBITDA margin percentage, should be greater than 60%. We are operating at the levels significantly higher Rule of 60 today, but our vision is to operate at least at the Rule of 60 at scale.

In summary, we have a clear strategy that is working. I wanted to leave behind four messages for our platform business. One, we are an evergreen market with a large total addressable market. The second point, we have a track record of successful innovations and cutting-edge technologies like AI/ML, blockchain, and cryptography. The innovation and experience center is accelerating this further. The third point we have shown massive customer adoption addressing the needs of several buying centers in enterprise. Fourth point, our platform business demonstrates all SaaS platforms characteristics, which are Rule of 60, consistent, predictable growth rate, 70% plus EBITDA profile, high lifetime value for its platform. Interestingly, SaaS companies such as ServiceNow are typically valued at the P multiple of 100 plus. So that is the power of platform business and we continue to report as I said earlier, both platforms and enterprise business separately from this — from the quarter onwards

With this. I would like to hand it over to Deepak to talk about enterprise business.

Deepak Goyal — Executive Director and Chief Business Officer

Thanks, Uday. Hello everyone, thanks for joining for this call. Uday has given an overview of the industry and our approach to the platform business. Let me give you an overview of the enterprise business. We are India’s largest CPaaS player with over 20 years of leadership in the communication space. Fundamentally, our business is about helping enterprises engage with their end customers across communication channels. So when a bank is sending OTP or a notification to it customer goes through our platform. If an enterprise is engaging in a two-way conversation with their customer, go through our platform. We are behind the scenes touching over one billion people enabling their digital journey. Our business model is pay-as-you-grow. So as the volume of communication between enterprises and their end customers grow, we grow. And in fact, our business is very closely coupled with the growth of digital economy as the digital interaction grow we will grow. I’m very optimistic on the growth prospects of the enterprise business.

Let me tell you why we are best positioned to build on our leadership in this space. Number one, scale, we have unmatched scale with over 30% enterprise market share in India. Our scale is not just reflected in volumes, but also in terms of our customer profile. We sell over 1,300 enterprises in India, eight out of Top 10 brands across all industry segments or I would say across all large industry segments from banking, insurance, retail, e-commerce, travel, digital natives, etc are our customers. We are the largest partner with the government and played an active role in enabling vaccination in India by providing authentication messages to Aarogya Setu app as well as CoWIN app through OTP to schedule vaccine appointments and notifications.

Our scale helps us deliver large campaigns for customers have short notice and provides tremendous references for our new customer acquisition. We acquired over 200 new customers every year as enterprises are keen to work with market leaders. Number two is customer stickiness. Once we acquire customers they continue for perpetuity. Our business is not about just providing a gateway for enterprises to the telco, it is about significant integration coupled with 24/7 surveys requiring tremendous agility. We have built a culture of customer first and our turnaround time to meet our customer comments is the industry benchmark. Let me give you a few examples. We have given more than 10,000 customized APIs to integrate with our customers in certain large customers we have done more than 100 APIs in divisions across the different systems. This is a constant process and is a key requirement to scale.

Our strength in banking is due to our middleware application being deployed within the bank’s environment. Banks today deploy multiple CRM software to provide multiple service to their customers be it banking, loans, cards, insurance, mutual funds, and other products. To deliver notifications to their customers our middleware is connected to their multiple CRM systems. We support over 1,000 types of different use cases where customers receive omnichannel messages based on their engagement. This middleware process more than two billion messages per month for various banks. We are deeply integrated with all the major CRM systems across different verticals to enable enterprises and multi-channel messages to their customers. It is impossible to ramp up in any customer without these integrations. We have a huge headstart and it is not easy to displace incumbents. This is reflected in the fact that more than 50 out of our top 100 accounts have been with us for more than five years. If you look at our customer cohorts every cohort has grown double digits the CAGR from inception.

New use cases, we are constantly seeing new use cases evolve in our business. UPI is a great example. As Uday mentioned the number of UPI Interventions grew from one billion in FY ’18 to 86 billion in FY ’23, estimates are that it touch 420 billion mark in FY ’28. This provides a huge opportunity for us and we are addressing this with the banks. There are a lot more such opportunities.

Let me give you some examples. AI/ML-based solutions for a leading bank. We help automate relevant promotional messages based on user card swipe activity using machine-learning technology, relevant offers that trigger to user basis his transaction amount, location, and card type. This program has resulted in two ways, increase in loyalty offers for the bank. We pioneered voice OTP. If the customer. Is in a remote location where SMS deliveries are low we can enable a retry mechanism with OTP getting delivered through call. These are a few examples in terms of how traditional channels are seeing new use cases and fueling growth beyond OTP and notifications.

So I’ll talk about new channels. We are seeing new channels like WhatsApp provides a big opportunity for us. These are coming out with completely new use cases and not really the substituting the use cases of SMS. We have made significant investments in WhatsApp and it is reflected in our results. We have grown our business over 3.5x from Q4 of last year to Q4 of this year and we have reason an annualized run-rate of INR150 crores in this business.

Let me give you a couple of examples of what we’re doing here. Commerce on WhatsApp. We have enabled highly personalized customer experiences by WhatsApp for our brands. This business is not only to differentiate themselves but also to gain a sustainable competitive advantage. One of the use cases is leveraging cab booking over WhatsApp instead of booking a cab via various cab aggregators at airport. We have worked out with an online travel company to provide a very simple user experience to book a cab to their destination from the airport whether it is in integration with various care provider over Google Google Maps, or even a payment gateway, the whole journey is very seamless, and liberates the users from downloading different apps for cab booking.

Another example is solving one big logistics last-mile delivery problem. We created a solution for our logistics player who provided a 24/7 process of handling shipments-related queries, customer interaction compliance, and other support use cases. This helped the customer in solving real customer problems using our WhatsApp services. Customer feedback increased by 20% as the logistic player was able to identify and resolve customer pinpoints where shipments got undelivered. Just to tell you we are powering State Bank of India WhatsApp banking service over WhatsApp. Now they are over 300 million customers who will now be able to engage WhatsApp with SBI for all their banking requests. This is another new channel which is RCS and we are equally engaged in RCS and taking the lead there as well as signing up customers.

So in summary, we have a very solid business and are well-positioned to benefit from the digital interaction boom as we have all the building blocks required. FY ’23 has been a challenging year as the pricing environment deteriorated in the first half of the year. We are now seeing more stability as there is a realization that pricing alone is not sustainable differentiation. Customers realize that having a few minutes of downtime in OTP can disrupt their business. Customer service around two-way communication is our core business and we are available 24/7 to solve the problem and provide new solutions.

We are constantly innovating. I do not believe one can disrupt this business on price alone. I have seen multiple cycles in the industry in the past, we have seen price increases in the industry two times in the last five years on our domestic business and around three to four times on international side. My personal experience being in the industry for over two decades is the pricing environment stabilizes after a challenging year. I’m hopeful that history will repeat itself here. As the business environment has become stable, we have seen our Enterprise margins come back to 20% levels. We think what is behind us and we are looking at growth in FY ’24.

That’s it from my side. Thank you. And I will pass it on to Aravind.

Aravind Viswanathan — Chief Financial Officer

Thanks, Deepak. Welcome, everyone, and thanks for joining our call. You heard Uday and Deepak give an overview on the Platform and Enterprise business. I would like to cover two areas from my side. A quick overview on the year gone by and the way we are looking at the Enterprise and Platform business going forward from a reporting standpoint, right? We ended FY ’23 with revenues of over INR3,350 crores and PAT of around INR450 crores.

We had a slow start to the year and saw a drop-in profitability but like we mentioned then, over the past three quarters, we’ve seen a steady improvement in our profitability. Deepak alluded to it with gross margins of the enterprise business back to 20% and overall company-level EBITDA also back to 20% in Q4 ’23, right? We generated over INR200 crores of operating cash flow in Q4. I think the big takeaway for us is that we’ve stayed very-very disciplined in a tough environment, right? We’ve not — we have not gone aggressively, we have not made mistakes we kind of remain very disciplined and we stuck to our commitment to return cash to shareholders, right, we announced a dividend policy of 30% of consolidated PAT to be paid out as a dividend every year, we announced a final dividend of INR4 per share, this is on top of INR6 interim dividend that we announced in August ’22. We also completed our third consecutive buyback of INR170 crores if we include the buyback back the total outflows of INR210 crores in January of this year. So we have been returning A sizeable amount of cash back to shareholders.

Going forward, as Uday mentioned, we have two businesses, Enterprise and Platform. Both of these businesses are part of our CPaaS market, but we will break down the financials, right up to EBITDA from Q1 of FY ’24 on a management reporting basis. So there is a better understanding of these businesses for investors and analysts. These businesses have slightly different drivers, so we will look at metrics across investments, business impact, and financial impact. To give you a sense for the platform business we would share business metrics along customer adoption, customer churn, and platform segmentation. Rule of 60 as Uday kind of alluded to would be applicable to the platform business.

For the Enterprise business, we have continued to give new customers a breakdown of customer segmentation and customer concentration. From a financial metric standpoint, we already give breakdown of the gross margins, we would start sharing EBITDA from these two businesses. This is one more step as part of our disclosure process, right. We have been constantly adding our disclosures and we think this will help investors understand our business better.

With this, I would request that we open the floor for Q&A, we will be happy to take questions.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] We have our first question from the line of Ronak Vora from AUM Fund Advisors LLP. Please go ahead.

Roank Vora — AUM Fund Advisors LLP — Analyst

Hello. Hello.

Operator

We can hear you, sir.

Uday Kumar Reddy — Founder, Chairman and Chief Executive Officer

Yes, Ronak. Please go forward.

Roank Vora — AUM Fund Advisors LLP — Analyst

Yeah, you said that we are back on the part of growth from FY ’24 onwards. So what kind of growth we expect in the Enterprise and Platform business separately?

Uday Kumar Reddy — Founder, Chairman and Chief Executive Officer

Deepak, do you want to give a color on the Enterprise business first?

Deepak Goyal — Executive Director and Chief Business Officer

Yeah, sure. So Ronak, as I mentioned the worst is behind us. Yeah, and we are seeing good growth in FY ’24. So, we don’t provide any forward-looking guidance, but what I can tell you is that our existing business, our existing customers they are intact, they are with us, they are very happy with us with our solutions and about service and they are growing. Apart from that, I mentioned in my previous earnings call that we have embarked on a very aggressive campaign to acquire new customers and we are very focused on that and we have seen some real good results in Q4, where we have acquired more than 50 customers, which are large and we are onboarding them. So overall, I’m very hopeful for a good growth coming in in FY ’24.

Roank Vora — AUM Fund Advisors LLP — Analyst

Okay. Because in the last three quarters, even though a number of customers have increased revenue cancellation and enterprise business has been hardly flattish. So then my question comes in that is onboarded around with 50 customers and are in the process of onboarding 50 customers than the current quarter. So going ahead. So when do these 50 customers translate into revenue? So, generally what’s our time cycle, if you can please help?

Deepak Goyal — Executive Director and Chief Business Officer

So, Ronak usually it takes about six to eight months for customers to fully ramp up their volumes and their transactions on us and this is the time frame that we’re looking at, but we would see that some amount of their business would start trickling in from Q1 itself.

Roank Vora — AUM Fund Advisors LLP — Analyst

Okay. And on the platform business.

Uday Kumar Reddy — Founder, Chairman and Chief Executive Officer

Ronak, Uday here. On the platform side, as I promised you earlier like we closely track Rule of 60. So definitely we are very conscious about the growth, as well as the revenue growth as well as the EBITDA margins. As I mentioned in my call, we would our revenue — our EBITDA margins on our platforms are very high, which is upwards of 70%. So yes, we — our base is small as on today when we compare with the enterprise business. So I think since we have the six platforms, which are been kind of dipped.

Roank Vora — AUM Fund Advisors LLP — Analyst

Okay. And so even though. I understand that.

Uday Kumar Reddy — Founder, Chairman and Chief Executive Officer

The two platforms have already reached INR100 crores club and the third platform should be able to reach in the next one or two quarters. The remaining three platforms, at least, there’ll be around 0 to INR50 crores by end of this year. So all six platforms, so we’ll be contributing something rather in this financial year.

Roank Vora — AUM Fund Advisors LLP — Analyst

Okay. Thank you.

Operator

Thank you. We have our next question from the line of Balaji Subramanian from IIFL. Please go ahead.

Balaji Subramanian — IIFL Capital Ltd. — Analyst

Good afternoon, thanks for taking my question. I had two questions. The first one is on where are we on the consent management module for Trubloq. So this was something which was expected to be approved by the regulator and any progress on that. The second thing is on again related to TRAI. Last week there was a news item that TRAI had called telcos and discussed the issue of spam calls, especially on the voice front. So do we see some opportunity there, just like how we have kind of moved ahead with Trubloq for SMS?

Uday Kumar Reddy — Founder, Chairman and Chief Executive Officer

So, Balaji. Hi, Uday here. So in terms of content management, it is the regulator and it is the telcos who has to take the call but as far our platform is concerned, we have been ready for quite some time. So it is up to the regulator and telcos to decide when they want to launch, so we are not the one who is going to launch, right? So that’s the number one and number two about the spam calls, we are busy deploying our SMS phishing solution as we speak. So first, we would like to concentrate on SMS phishing before you really more to the voice.

And If I’m allowed to say at the right solution for, I mean voice phishing is not that easy to deploy. We don’t have any benchmarking products, not that we have benchmarking product for SMS phishing but it’s too early to comment on voice solutions.

Balaji Subramanian — IIFL Capital Ltd. — Analyst

Okay, got it. Those were my questions. Thanks and all the best. Thank you.

Operator

Thank you. We have our next question from the line of Amit Chandra from HDFC Securities. Please go ahead.

Amit Chandra — HDFC Securities — Analyst

Yeah, hi, and thanks for the opportunity. So, my first question is on the enterprise business. So you mentioned that enterprise business we are going to see a better growth in FY ’24, so the assumption for this growth is only, I know based on the reversal in volume growth and if you can break it down, what’s happening with transactional and promotional volume because I think promotional volume for ’23 has been down significantly. And also are we also baking in price hikes in the NLD side or any further price hikes and pricing on the NLD on the enterprise business? And secondly on the enterprise business, margin expansion, can you please provide us with any kind of walk that you have that what led to this margin expansion? And I know, is it more risk, is it the new base or is there something that is like a one-off in this?

Deepak Goyal — Executive Director and Chief Business Officer

Yeah, Amit, it’s Deepak here. So first of all, I spoke about growth in enterprise business. So it will come through two counts, one from existing customers, and another with new customers, which we have recently acquired. And let me tell you the customers that we acquired they are very large insights. So we are very hopeful that we would — that they would ramp up very well with us, but you asked a very good question that how what will happen with promotions and the transactions. Yes, I agree, in the last couple of quarters we have seen that banks have not been spending so much what they used to do it earlier on the marketing campaigns and promotional campaigns, we have seen some sort of — some sort of degrowth, I can say on those volumes but let me tell you our focus and our majority of our business is on transaction-based and we have seen good growth coming in on transaction side, as I mentioned about just about UPI itself, that itself is a use-case, which has been growing tremendously and it’s growing in a very big-time and we are seeing overall, as I’ve said banks will grow, the number of transactions go up, our business will also go up if. If e-commerce companies they sell more and they do more transactions we do more transactions. So it is straightway related with our customers growth and we see that the growth is coming because digital adoption is increasing. So that is that.

As far as pricing is concerned, as I mentioned in last five years we have, we were able to increase our reset the prices twice. One it was, if, I am right it was in 2018, and then it was 2020 and we have seen what as I’ve said last year, and I’m pretty sure. I’m hopeful, I would say that things will reset again in near future and we would be able to see some price hike and better margins.

And to answer to your last question that no it is not a one-off. Our margins have improved, that is largely due to two factors, one, overall prices have stabilized. We are not seeing that kind of competition basis prices because even our competition and everyone has realized that price as I mentioned in my, earlier also in my statement, that price is not the one through which you can actually win the customers. You need to provide, you need to have domain expertise, you need to have.

Operator

I’m sorry sir, we are unable to hear you.

Uday Kumar Reddy — Founder, Chairman and Chief Executive Officer

I think we lost, Deepak.

Deepak Goyal — Executive Director and Chief Business Officer

The prices have stabilized and we were able to bring down our cost as well our input costs as well, and these two factors, we were able to increase our margins in Q4. Hope I’ve answered your questions, Amit.

Amit Chandra — HDFC Securities — Analyst

Okay. It was helpful, sir. And on the platform business, Uday you mentioned that the Rule of 60, so currently we are operating well above that. So the margins are pretty high in the platform business. So should we assume that with scale coming in in the platform business because we have like-kind of four to five major products which are either in incubation stage or either to gain scale? So with the scale coming in the margins that we’re operating at present, it will come down or is it fair to assume that we will operate within that Rule of 60 rule band when we reach scale or like in Wisely ATP kind of a product, if it gained scale then what margins can we assume for that?

Deepak Goyal — Executive Director and Chief Business Officer

So Amit, basically like definitely our intent is to operate at Rule of 60 but As you rightly mentioned the scale is pretty small as we speak, but I don’t see any challenge even when all six platforms go live and they start contributing like. So they should — they should able to operate at a Rule of 60, so that’s all we — that’s how — that’s all. In fact, the way we work in innovation and center is each platform is housed in one garage and it affords a dedicated team, right, and it has it’s own budget and it got its own roadmap, so and everybody is mandated to operate at a scale and KPIs. So the whole team is pretty clear about what they’re supposed to deliver. So our intent is to deliver minimum 60, if that’s what you want me to commit. So our intent is to operate at a minimum.

Amit Chandra — HDFC Securities — Analyst

Okay. And sir, I don’t like one last thing, so I don’t obviously, the platform is a growth driver for us, but how do you see the competition evolving here because I know right now we are not at scale, but still there are similar products being launched by the competition. So how do you see the pricing here, is it more capability driven or it is more pricing-driven? So like these factors are success driven for any product.

Uday Kumar Reddy — Founder, Chairman and Chief Executive Officer

So, Amit, it is a very, very good question like. So, I will let Uday to clarify at this point. So we have some evidence here in the sense like we were the one who has developed and deployed the Trubloq BLT platform, which is our biggest blockchain use-case in the world, and be one minimum and there might be one their 60% market share consistently for the last two years, right. In fact, we are gaining market-share every quarter. The reason being, we are we don’t just innovate and forget it. We keep innovating, we keep improving our platforms. Okay, So that’s, that’s where our that’s what our DNA is like, right? So, we, in fact, we don’t copy anybody if somebody wants to copy us, most welcome, right, it’s not that easy and we have created the second dividends, which is Wisely Communicate which we launched with Microsoft. So the third dividend is Wisely ATP. So we are always ahead of the curve. We are always good at identifying the opportunities, we are good at identifiying the greenfield opportunities, and we are good at building the solution or the platforms on time and delivering that customer — the impact to our customers. So, we have evidence here. So, I don’t really care about competitor. We are much, much ahead of the curve. So I would like to leave it there.

Amit Chandra — HDFC Securities — Analyst

Okay, Uday. Thank you and all the best for the future. Thank you.

Operator

Thank you. We have our next question from the line of Deepak Chokhani, an Individual Investor. Please go ahead.

Deepak Chokhani — N/A — Analyst

Hello. I have a couple of questions on Wisely ATP. First is, when can we expect it to move to the next stage, and is this product something which is mandatory for the banks or are they adopting it voluntarily, and third is the patent in India or abroad?

Uday Kumar Reddy — Founder, Chairman and Chief Executive Officer

Yeah, Deepak, Uday here. So good question. So, sorry what is Kotak, ICICI, HDFC are on this platform and they are extremely happy with the results and in fact, we should able to get into commercial discussions, very soon. That’s number one. Number two, is it regulated as of today, no but the problem is so big, which all of us are fully aware of it, like, okay, whether regulation comes or not the banks and all the enterprises are looking for this kind of solution like, okay. They have to, it is the responsibility of the Board, it is the responsibility of the CX source to protect their users. So as of today, in fact, each and every bank, each and every enterprise have lot of budgets for — towards the cyber security and they’re willing to spend the money on a solution like. So as long as you deliver the impact to the users in terms of protecting their users, I don’t see any much challenge commercializing this product. So please allow us to update in the next one, one and a half month time but the problem here only here is it’s a greenfield opportunity. This first-of-its-kind of solution in the world. So the pricing when we have to price to our customers. So we don’t have any benchmarking product line. So it takes a bit of time for us to close the deals but once we close with one or two banks that will become the benchmark for other enterprises to follow. So first one or two deals are very important for us.

Deepak Chokhani — N/A — Analyst

Sure, sure. And do you think Q1 will have some bit of it?

Uday Kumar Reddy — Founder, Chairman and Chief Executive Officer

And before I answer that, Deepak. Let me I’ll update you like recently TRAI from the group has formed a group where the Ministry of Home Affairs, Reserve Bank of India SEBI, and all the regulators in India, including insurance regulator came together and they are looking for this kind of solution like that where we have demonstrated our platform a month ago and they fully accepted the solution. So, yeah, we don’t see any challenge in commercializing this platform. Don’t worry too much about this quarter and next quarter, but as I told you earlier this is the biggest innovation that came out of Tanla in the last two decades. So you know what I mean by that.

Deepak Chokhani — N/A — Analyst

That’s helpful, sir. Last question on this, is this patented in India or abroad?

Uday Kumar Reddy — Founder, Chairman and Chief Executive Officer

We have applied in all markets in important markets. That’s how we always do, India, Europe and the US.

Deepak Chokhani — N/A — Analyst

Perfect, thank you so much. Thank you.

Uday Kumar Reddy — Founder, Chairman and Chief Executive Officer

Thank you.

Operator

Thank you. [Operator Instructions]. We have our next question from the line of Mohit Motwani from Nuvama. Please go ahead.

Mohit Motwani — Nuvama — Analyst

Hi, thanks for the opportunity. I have three questions. One is around, you spoke in the last quarter about integrating some of the large banks and e-commerce companies in the coming quarters. So just wanted to get a sense of where are we from that standpoint, have the revenues started flowing in and what’s the scale of that?

Deepak Goyal — Executive Director and Chief Business Officer

Yeah, so Deepak here. So as I said, we have completed the integration with some of the large customers and it takes time because then there is a testing phase which usually go on for about eight to 10 weeks, where we get some percentage of their business, and once that testing is complete, and all the integrations are done and then slowly volumes ramp up. So that’s the life cycle of onboarding any customer. So we, I mean, as I mentioned, we would see some amount of revenues coming in Q1 but overall, the real impact will come maybe in about six months’ time.

Mohit Motwani — Nuvama — Analyst

Sure. And can you give a sense of what is the contribution from NLD, and ILD, I believe this was a 95% from NLD, two years ago, and has that mix shifted or it remains the same as of FY ’23?

Aravind Viswanathan — Chief Financial Officer

It’s Aravind here. We have not called out, Mohit, in terms of NLD, ILD contribution.

Mohit Motwani — Nuvama — Analyst

So, sorry, in the analyst meet there was 160 billion of NLD transactions and 9 billion of

Aravind Viswanathan — Chief Financial Officer

Volume. Okay, okay. No-no, so pricing is very different, right? So if you look at it roughly about 30-odd percent of the enterprise business, one-third of the enterprise business would be NLD, ILD, sorry.

Mohit Motwani — Nuvama — Analyst

This is volume basis, right?

Aravind Viswanathan — Chief Financial Officer

No, revenue basis.

Mohit Motwani — Nuvama — Analyst

Revenue basis. Okay, okay. And one more last question was have you considered entering the new product, think like e-mail, and if yes, then would you be pursuing any inorganic opportunity for the same or it will be more in-house?

Deepak Goyal — Executive Director and Chief Business Officer

So Deepak here. So, we do provide e-mail services to a select few customers that is primarily for transactions. Let’s say for a couple of very large private banks, they do send, they use our email services and but we are not too focused on email. We are focused on newer channels as I mentioned in my statement like WhatsApp, like Truecaller, like RCS, so these are the channels, which are really ciders and we feel that we can build a lot of new cases, new use cases using these channels because they provide two-way communication and we can achieve a lot through these and they can complement to our overall SMS business.

Mohit Motwani — Nuvama — Analyst

Sure, and the last one if I may squeeze in, so your contribution from WhatsApp has been increasing very heavily over the last year. Do you see this increasing move forward because it might be enjoying higher margins? Do you believe that in the company-level margins, WhatsApp can aid and improve it further?

Deepak Goyal — Executive Director and Chief Business Officer

Yeah, definitely it is more like building the use cases around WhatsApp. Okay. Building some interesting user journeys. So some complex user journeys, which can help enterprises to interact with their customers, and when we do that we definitely make more money. Customers are happy to pay us more and happy to pay us for solutions and that goes into our margins. Definitely, yes, and FY ’24 we have some big plans on that.

Mohit Motwani — Nuvama — Analyst

Sure, that’s all helpful. Thank you so much.

Operator

Thank you. We have our next question from the line of Milind Karmarkar from Dalal and Broacha PMS. Please go ahead.

Milind Karmarkar — Dalal & Broacha PMS — Analyst

Hi, gentlemen. Hi, Uday. Thank you very much. I think the results were quite good and congratulations for delivering on the 20% promise which you had given a few quarters back on the — on EBITDA. I had one basic question about as we increase our platform business, I’m sure there will be an improvement in margins. So just wanted to hear from you that do we have sufficient scope for growth in the margin. That was my first question. My second question was on, the use cases like the one which you which was talked about, which was a travel company using the cab aggregator and making it easier for booking of caps, what kind of sort of commercial opportunity do you think in these type of use cases? So that was, that where my two questions.

Uday Kumar Reddy — Founder, Chairman and Chief Executive Officer

Hi, Milind, Uday here, thank you.

Milind Karmarkar — Dalal & Broacha PMS — Analyst

Hi.

Uday Kumar Reddy — Founder, Chairman and Chief Executive Officer

Aravind, do you want to take the first question? Then the second one goes to.

Aravind Viswanathan — Chief Financial Officer

Sure, sure. I can. So, Milind like Uday said, right, we have six platforms. Some of them have already scaled and all of them we are confident of scaling, right? So from a market potential standpoint, there is a lot of headroom, right? We have to obviously, execute and scale them up, but clearly, we are not opportunity constrained from a platform standpoint, right? Each of these platforms are platforms of scale, right? The timing is obviously what one is looking at, but definitely, Uday kind of talked about it in his opening remarks. So one good direction is that our scale of platforms is gaining scale. That speed is actually accelerating. This is a good positive. So from that perspective, definitely there is headroom and obviously, once you look at it, the integrated company margins may will play out but we still look at these two very differently and individually, Milind, but yes there is headroom on this, right? Maybe on the second let me ask, Deepak to give you a perspective on that.

Deepak Goyal — Executive Director and Chief Business Officer

Yeah. Hi, Milind. So you asked for how we, I think your question was how we charge our customers, how we make money on such kind of solutions. Am I right?

Milind Karmarkar — Dalal & Broacha PMS — Analyst

Correct. That’s absolutely correct.

Deepak Goyal — Executive Director and Chief Business Officer

So, see, one this comes under our solutioning part, okay, WhatsApp is a channel which provides two-way communication, SMS is another channel, which drives every one-way channel, one-way communication. So, now we have to provide solutions on it and so we have to sit with our customers, understand their business problems and see how it can be resolved by using different channels. So what — how we resolve for this particular case. So how we charge them? We charge them for our solution, then we’d be maybe our fee would be for the bots, what we have made, for the users we have made. When the users start using this channel, we charge them for usage also. So those are the WhatsApp charges, right.

Milind Karmarkar — Dalal & Broacha PMS — Analyst

Okay. Yeah.

Deepak Goyal — Executive Director and Chief Business Officer

So what is very important, Milind here is more than that, okay, it’s about the kind of thought leadership, the kind of experience we bring in, okay? So what happens is customers start feeling the customer feel with us. So these are the guys who are actually solving my problems. So rather keep my entire business with these guys, okay, whether it is SMS, whether it is everything else, just I’ll give you an example of which is a real example, I mean of Wisely ATP, right? So we got a call from a bank and which I think mentioned in the last earnings call also and they said, hey, our users are getting scammed all the time. Do you have a solution? And because of this, what is happening is that maybe that could be one of the reasons why they are thinking whether they should be sending too much of marketing messages or not because sometimes customers feel it’s our phishing method, right?

Milind Karmarkar — Dalal & Broacha PMS — Analyst

Correct.

Deepak Goyal — Executive Director and Chief Business Officer

So we started working on it and we launched Wisely ATP and we have gone through the same very bank and said, listen, we are ready and this a solution, and they and we have started the POC, they’re very happy with us. So once we have that kind of relationship, right, it helps us not just on our new product, which helps us in our overall business also because that creates immense credibility for us in front of the customer and they would like to be with us forever and so this is how it works.

Milind Karmarkar — Dalal & Broacha PMS — Analyst

Okay, got it. Thank you so much, gentlemen. Wish you all the best. Thank you.

Deepak Goyal — Executive Director and Chief Business Officer

Thank you.

Operator

Thank you. We will take last question from the line of Sambhav Jain from Vardhaman. Please go ahead. Mr. Sambhav Jain.

Sambhav Jain — Vardhaman — Analyst

Good evening, sir. Good evening, Uday, sir. Good evening, Deepak, sir, and good evening to the CFO as well.

Uday Kumar Reddy — Founder, Chairman and Chief Executive Officer

Hey, good evening, Sambhav.

Sambhav Jain — Vardhaman — Analyst

Sir, my first question is regarding our basically, loss in revenue in this quarter. And just wanted to get an insight about — after the whole SBI fiasco, I just wanted to get an insight if you are picking up on the WhatsApp channels with them and how are the new customers contributing towards our top-line now.

Aravind Viswanathan — Chief Financial Officer

So I’ll take this question. If you would have seen Q4 is historically from a revenue point of view from the volumes side is slightly weaker compared to our Q3 and this is what we have seen in Q4, also because Q3 is full of festivals, a lot of festival spend happens, and in Q4, there are no festivals, number of days are less than in the quarter, maybe, I mean it’s back two or three days that also impacts and there are certain brands, certain customers who are already done with their budgets. So overall, if you have seen the marketing side, the numbers are a little on the lower side. So all that has impacted the revenue a little bit, but yeah, so this is what the reason for lower revenues in Q4.

Sambhav Jain — Vardhaman — Analyst

Thank you, sir, My second question is regarding our new geographies, sir. How, what is the traction and how are you seeing the response in new areas that we are planning to expand or we have already started expanding like the Middle East and like Uday, sir mentioned, certain parts of Southeast Asia as well. So just wanted to get a feeler of how things are shaping up for the same.

Aravind Viswanathan — Chief Financial Officer

We have. We have started our operations in UAE, a couple of years back, and now I would say. I would say that the UAE is doing reasonably well for us and we have in FY ’24, we would see a good amount of revenues coming in from there on the enterprise side. But if you look at, we were looking for a major differentiator and I think we’ve got it in Wisely ATP and we participated in Mobile World Congress in Barcelona and we met the regulators from UAE, from Saudi, from a lot of other countries, we met telcos, they’re shown keen interest in this product and I am pretty sure that you would see slow growth coming in from their, business coming in from their rather and we would report about it in the next earnings call.

Sambhav Jain — Vardhaman — Analyst

That’s wonderful to know sir. Thank you. Thanks a lot. One large out of context question, sir. The day Uday, sir had tweeted about Starbucks logo and about the new innovation center. He had also casually said he invited me to come down sometime in Feb. I did, right, the management. I do live in Hyderabad and it would be nice to this come say hi to all of you and just see all you guys in person and say hello. So, whenever that happens, looking forward.

Uday Kumar Reddy — Founder, Chairman and Chief Executive Officer

Sure. Sure. Sure. We will definitely arrange this trip very soon. Yeah.

Sambhav Jain — Vardhaman — Analyst

Alright, sir. Thank you. Thanks a lot. Thank you.

Uday Kumar Reddy — Founder, Chairman and Chief Executive Officer

Thank you.

Operator

Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to Ritu Mehta for closing comments. Over to you.

Ritu Mehta — Head of Investor Relations

Thank you, everyone, for joining the call today. In case any of your questions remain unanswered, you can write to the Investor Relations team. Have a good day. Thank you.

Uday Kumar Reddy — Founder, Chairman and Chief Executive Officer

Thank you.

Operator

[Operator Closing Remarks].