30,500% return in 8 years! Brokerages see up to 60% upside in this multibagger

A Hyderabad-based cloud computing firm has changed the fortunes of many investors in the past eight years. The scrip jumped 30,556 per cent to Rs 1,321.30 on March 28, 2022 from just Rs 4.31 on March 28, 2014. This shows an investment of Rs 1 lakh has now turned into over Rs 3 crore at present during the same period. The stock is Tanla Platforms, formerly known as Tanla Solutions.

Going ahead, market watchers believe that Tanla Platforms will continue to deliver a robust return, citing robust earnings growth on account of the addition of enterprise clients and continued growth in enterprise messaging volumes, among others.

For the financial year ended March 31, 2021, the company posted a profit of Rs 356.14 crore against a net loss of Rs 209.48 crore a year ago. On the other hand, gross sales increased 20 per cent year-on-year (YoY) to Rs 2,341.47 crore during the same period. Overall, the top line of the company has grown by over 29 per cent annually in the past 10 years.
 
Tanla Platforms is a leading communications provider, enabling businesses to communicate with their customers and stakeholders. Its cloud-based platforms provide ease of connectivity to enterprises and aggregators with a plug-and-play approach. Tanla recently expanded the bouquet of services by acquiring Karix, the market leader in the Indian CPaaS space (or communication platform as a service), and Gamooga, a marketing automation company, in FY20. It launched Trubloq, a blockchain-based solution to filter spam SMSs. Trubloq processes 63 per cent of India’s SMS traffic. Of late, it also launched the Wisely platform in collaboration with Microsoft.

Vishal Wagh, head of research, Bonanza Portfolio is positive on Tanla Platforms with a target price of Rs 1,907. He believes that the global CPaaS industry is expected to grow at a 27.5 per cent CAGR over FY21-24E.

“We have estimated over 27.5 per cent and 28.9 per cent topline growth and EPS CAGRs over FY21-24E for Tanla on account of the addition of enterprise clients, continued growth in enterprise messaging volumes, increasing Trubloq platform volumes (higher margins) and the ability of Wisely to scale with more partnerships,” Wagh said, adding the stock is available at a significant discount to its peers considering higher return ratios, excellent cash generation and free cash flow.

The company on February 28 announced an exclusive partnership with Truecaller at MWC’22, Barcelona. “Truecaller Business Messaging will be exclusively powered by Tanla’s Wisely CPaaS platform,” the company said in a release. Wisely is one of the world’s largest blockchain-enabled CPaaS platforms, secured by e2e cryptographic encryption.

Truecaller has 300 million monthly active users, of which 220 million are in India, according to IIFL Securities. The brokerage is also positive on Tanla Platforms with a price target of Rs 2,123, indicating an upside of 60.67 per cent from the current market price of Rs 1,321.30 on March 28.

“We expect Tanla to post 18 per cent EPS CAGR over FY22-24, after witnessing around 53 per cent EPS growth in FY22,” IIFL Securities said in a report on March 2.