Momentum Pick: Trading at 53% discount, Tanla Platforms has 25% upside

Stock of Tanla Platforms has reversed its losses after hitting a 52-week low of Rs 493 on March 28, 2023, and is currently trading at a discount of 53% from its 52-week high. The stock has underperformed the Nifty50 and given returns of negative 52% over a 1 year period versus 11% returned by the 50-stock index. However, the current pattern on the technical chart indicates an upward move in the short to medium term.

Tanla Platforms is the largest communication platform as a Service (CPaaS) player in India with two major businesses - enterprise and platform, both using blockchain technology to reduce spam and fraud activities and make it easy to integrate with enterprise applications.

Tanla Platforms shares ended at Rs 683 on the NSE on Tuesday and were up by Rs 4.55 or 0.67% from the Monday closing price.

Technical View
Tanla Platforms stock has been trending lower, forming a series of lower tops and lower bottoms since January 2022, Rajesh Palviya, Senior Vice President - Technical and Derivatives Research at Axis Securities said.

In the past couple of months, the stock has witnessed a sharp bounceback and rising volumes representing the fastest recovery, Palviya said, adding that a one-year down-sloping trendline breakout at Rs 635 level signals a trend reversal.

In addition, the weekly price action and RSI shows a positive divergence, indicating rising strength at lower levels, he said.

On the downside, the crucial support zones are around 635-490 levels, the Axis Securities expert said. The stock is well placed above 20, 50, and 100 SMA's, which reconfirms the short, medium-term bullish scenario, he added.

Technical analyst Nilesh Jain recommends a buy on this stock with a price target of Rs 750, estimating a 10% upside from the current level.

“Tanla looks positive for pullback to continue towards 750 and has a support at 660,” Jain said. He is Assistant Vice President (AVP), Equity Research Technical and Derivatives at Centrum Broking.

Fundamental View

Geojit: Buy | Target: Rs 848 | Upside: 25% | View: 12 months
Brokerage firm Geojit Financial Services recommends a 'buy' on Tanla Platforms shares for a price target of Rs 848. It sees a potential upside of 25% from the levels of Rs 678 at which this small cap stock was recommended. It has a 12-month view on this stock.

"We expect revenue to grow at a CAGR of 15% in FY23-25E, relying on new client additions, increased realisation from new and existing customers, price hikes and an increase in UPI transactions. The increasing adoption of the Wisely platform is expected to drive revenue and margin growth. We expect earnings to grow at a CAGR of 22% during FY23–25E," Vinod TP, Senior Analyst at Geojit told ETMarkets.

The stock is valued at a PE of 17X FY25E of adjusted EPS.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)