Tanla Platforms Q1 profit up 20% as digital platforms, enterprise communications fuel growth

Tanla Platforms Ltd on Wednesday (July 22) reported a 20.1% year-on-year increase in consolidated net profit to ₹142.2 crore for the first quarter ended June 30, compared with ₹118.4 crore in the corresponding quarter last year.

Revenue from operations rose 17.8% year-on-year to ₹1,226.4 crore from ₹1,040.7 crore. On a sequential basis, revenue increased 4.1%.

The company reported earnings before interest, taxes, depreciation and amortisation (EBITDA) of ₹201.1 crore, up 22.7% year-on-year from ₹163.9 crore and 4.9% quarter-on-quarter. EBITDA margin improved to 16.4% from 15.8% in the year-ago quarter.

Gross profit stood at ₹326 crore, registering a 25.1% year-on-year increase and a 2.6% quarter-on-quarter rise. Profit after tax increased 5.8% sequentially to ₹142.2 crore during the quarter.

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The company's earnings per share (EPS) for the quarter stood at ₹10.77. Tanla Platforms generated free cash flow of ₹126 crore during the quarter, equivalent to 89% of its profit after tax.

Digital Platforms contributed 8.4% of Tanla Platforms' overall revenue during the first quarter of FY27, while the Enterprise Communications business accounted for the remaining 91.6%.

The company said year-on-year growth in its Digital Platforms business was led by Wisely.ai, the Rich Communication Services (RCS) MaaP Platform, and Trubloq. Growth in the Enterprise Communications business, both sequentially and year-on-year, was primarily driven by a higher wallet share from existing customers.

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Overall gross margin contracted by 40 basis points during the quarter due to a change in customer mix. However, the Digital Platforms business continued to operate at an approximately 98% gross margin, while Enterprise Communications maintained a gross margin of around 20%.

Tanla said the year-on-year increase in profit after tax was primarily driven by higher EBITDA, partly offset by an increase in depreciation and a higher effective tax rate. The company ended the quarter with equity and reserves of ₹2,557.3 crore and cash and cash equivalents of ₹1,197 crore.

The annualised revenue generated from customers contributing more than ₹1 crore each grew 4.5% quarter-on-quarter and 16.7% year-on-year to ₹1,180.5 crore. Within this group, customers generating ₹10 crore to ₹50 crore in annualised revenue increased 10.8% sequentially and 43.9% year-on-year. Customers contributing more than ₹50 crore in annualised revenue grew 1.6% quarter-on-quarter and 5.4% year-on-year.

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Uday Reddy, founder, Chairman and CEO, said, "Q1 FY27 is a strong start to the year. Revenue grew 17.8% YoY, with gross profit and EBITDA growing even faster, reflecting an improving quality of growth. Our objective isn't revenue growth at any cost. It's profitable growth that consistently converts into cash."

Separately, Tanla Platforms said its board considered a proposal to acquire the overseas entity of ValueFirst at its meeting held on July 22. However, the board decided to defer the proposal for consideration at a subsequent board meeting.

Shares of Tanla Platforms Ltd ended at ₹565.80, down by ₹0.80, or 0.14%, on the BSE.

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