Release Date: January 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Tanla Platforms Ltd (BOM:532790, Financial) reported a significant increase in OTT business contribution, moving from 15% to 23% of overall revenue.
- The company received the RCS Growth Partner of the Year Award, highlighting its strong performance in the RCS segment.
- Tanla Platforms Ltd (BOM:532790) achieved a free cash flow of 180% of PAT, marking the highest in recent quarters.
- The company declared an interim dividend of INR6 per share, continuing its policy of returning 30% to shareholders.
- The MaaP platform has shown promising results, achieving 1 billion volumes in a month post-launch.
Negative Points
- The international business, particularly ILD, continues to face challenges, impacting the enterprise business negatively.
- There is significant pricing pressure in the market, particularly in the OTT space, affecting revenue growth.
- The company faces competition from telcos entering the OTT space, leading to a price war and reduced margins.
- Tanla Platforms Ltd (BOM:532790) experienced a one-time Forex loss due to euro currency depreciation, impacting financial results.
- Concerns were raised about the company's capital allocation strategy, with suggestions for share buybacks instead of dividends to improve tax efficiency for shareholders.
Q & A Highlights
Q: How long before we see industry tailwinds to do away with, and how do we plan to grow our revenues? Also, when do you expect VF International approvals, and how do you plan to deploy the cash?
A: Abhishek Jain, CFO, explained that the market is evolving with good volume growth from an NLD perspective, though it's price-sensitive. Stability in pricing should lead to growth momentum. The OTT business is performing well, with RCS seeing significant growth. VF International approvals are awaited, and cash will be invested in innovation, talent, and shareholder returns, including a declared interim dividend of INR6 per share.
Q: With OTT volumes increasing, how do you plan to handle the price competition from telcos and OTT players?
A: Deepak Goyal, Chief Business Officer, noted that while WhatsApp reduced prices for utility messages, promotional messages, which form the bulk of revenue, saw price increases. The company is focusing on creating stickiness with enterprise customers through integrated solutions, which should mitigate pricing pressures.
Q: Can you explain the increase in the platform's internally developed number on the balance sheet?
A: Abhishek Jain, CFO, clarified that as a SaaS company, Tanla capitalizes costs related to platform development, including employee costs directly involved in creating long-term platforms. The increase is due to the successful deployment of the MaaP platform.
Q: What is the impact of ILD volume shifts to WhatsApp on gross margins, and how do you see this evolving?
A: Abhishek Jain, CFO, stated that while ILD volumes have decreased, the shift to OTT channels like WhatsApp is helping maintain revenue. Gross margins have remained stable, and the company aims to sustain this level despite pricing changes.
Q: With the loss of the Vodafone firewall deal, how do you plan to grow the top line?
A: Abhishek Jain, CFO, emphasized that the company is focused on growth through platforms, OTT channels, and global expansion. Despite external challenges, the management is committed to leveraging all available levers to drive growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
