Why Tanla Platforms Share Price is Rising

Share price of Tanla Platforms has skyrocketed from Rs 30.3 to Rs 978.3 in the past five years, representing a remarkable increase of about 3,138.7%.

An investment of Rs 10,000 in Tanla Platforms five years ago would now be valued at an impressive Rs 313,870.

But this was long term. What about the current state of the SaaS stock?

Well, the positive momentum has continued in recent days with shares rallying around 22% in the past five days.

Here are the key factors driving Tanla Platforms shares higher.

#1 ValueFirst India acquisition

On 9 June 2023, Tanla Platforms announced its plan to acquire a 100% stake in ValueFirst Digital Media from Twilio for US$ 42 million (m) (Rs 3.5 bn) in an all-cash deal.

The closure of this acquisition is expected to take place in July 2023.

Additionally, Tanla will acquire ValueFirst Middle East FZC for Rs 200 m, with the deal closure expected in September 2023.

This strategic move is expected to significantly boost Tanla's market share and revenue growth.

With ValueFirst's strong presence in communication and customer experience management, its revenue of Rs 9.5 bn (billion) is expected to bring an incremental revenue of Rs 6.5 bn, according to the company's CEO, Uday Reddy.

Further, the acquisition will not only strengthen Tanla's position in the domestic market but also expand its international influence, particularly by securing a 10% market share in the UAE.

This increased earnings potential from ValueFirst's operations serves as a reason for the recent rally in the stock.

#2 Growth in Digital Interactions and UPI Transactions

Another driving force could be the company's strong growth in digital interactions and Unified Payments Interface (UPI) transactions.

This growth was due to the increasing adoption of digital technologies and the seamless integration of Tanla's services with enterprise applications, positioning the company favourably to capitalise on this ongoing trend.

Further, the rise in UPI transactions, facilitated through popular channels such as WhatsApp and Truecaller, has played a vital role in expanding Tanla's customer base and unlocking its growth potential.

Further, industry reports indicate a compound annual growth rate (CAGR) of 29% for the global CPaaS market between 2020 to 2025.

To capitalise on this growing adoption, Tanla Platform plans to tap into this by offering innovative solutions for multichannel communication.

With a strong focus on the CPaaS sector, Tanla is well-positioned to capitalise on the upcoming opportunities and further enhance its growth trajectory.

What next?

Going forward, the company's management anticipates improved revenue in the Enterprise segment, driven by the addition of new communication channels and potential price hikes.

Additionally, the company anticipates stable growth in its Wisely products, benefiting from favourable trends in digital interactions and easy-to-deploy models.

It is worth noting that in FY23, approximately 32% of platform revenue was contributed by Wisely, indicating its growing acceptance in the market.

In addition to revenue growth, Tanla also foresees an improvement in margins due to higher profitability and improved volumes in both the Enterprise and Platform business segments.

How Tanla Platforms shares have performed recently

Shares of Tanla Platforms have surged over 41% in the past month. Over the past five days, the stock is up 22%.

Tanla Platforms shares touched a 52-week high of Rs 1,235 on 13 June 2022 and a 52 -week low of Rs 493 on 28 March 2023.

It currently trades at a PBV (Price to Book Value) of 23.5 times.

About Tanla Platforms

Tanla Platforms is a technology company based in India that specialises in providing communication solutions and services.

The company operates in the Communication Platform as a Service (CPaaS) sector, offering a range of products and platforms that enable enterprises to communicate effectively with their customers.

Tanla's key offerings include cloud communication solutions, enterprise messaging, and application-to-peer (A2P) messaging services.

These services leverage advanced technologies such as artificial intelligence (AI), machine learning (ML), and blockchain to ensure secure and reliable communication channels.

The company has established a strong foothold in the market, catering to various industries, including e-commerce, banking and finance, retail, and healthcare. Tanla serves domestic and international clients, expanding its reach and influence across different geographies.

To know more about Tanla, check out Tanla Platforms' financial factsheet and Tanla Platforms news and analysis.

You can also compare Tanla with its peers:

Tanla Platforms vs Route Mobile

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Also check out the detailed comparison article on Tanla Platforms vs Route Mobile where we arrive at a conclusion about which stock is better.

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