Tanla Platforms Ltd · NSE:TANLA
Tanla Platforms — Q3 FY2021-22 Earnings Presentation
56 slides from Tanla Platforms's earnings presentation, Jan 21, 2022
Slide 1: Cover letter to stock exchanges
Tanla Platforms Limited T: +91-40-40099999 (Formerly known as Tanla Solutions Limited) info@tanla.com Tanla Technology Center www.tanla.com Hi-tech city Road, Madhapur, Hyderabad, India - 500081 CIN: L72200TG1995PLC021262 January 21, 2022 To, BSE Limited National Stock Exchange of India Ltd. Phiroze
Slide 2: Investor Update Q3 21-22
January 21, 2022 Investor Update Q3 21-22 Ashok Everything I do will be about creating great results and making great business! Team Tanla
Slide 3: Safe Harbor
Safe Harbor The CPaaS business is evolving at a fast pace in India with very little information available in the public domain on the overall market. The financial community has always sought a response on the total market size, key drivers of the industry and the competitive landscape in this space
Slide 4: State of the business: leading innovation, growth and value creation
State of the business: leading innovation, growth and value creation High Growth Best in Class Accelerated Innovation Enterprise segment market leader margins and free cash flow profile TRUBLOQ • 3 patents awarded • World’s first block chain 30%+ 4x 8x • • Exclusive multiyear partnership with VIL Co
Slide 5: Solid performance across all metrics
Solid performance across all metrics Key financial metrics (₹ million) Revenue grew 35% EBITDA grew 60% PAT grew 69% EPS grew 70% year-over-year to year-over-year to year-over-year to year-over-year to ₹8,849 million ₹2,028 million ₹1,580 million ₹11.66 ₹ 9,500 8,849 ₹ 8,500 ₹ 14 +35% 2,028 ₹ 2,100
Slide 6: CPaaS platform offering a digital marketplace for enterprises and suppliers
CPaaS platform offering a digital marketplace for enterprises and suppliers, with a global edge-to-edge network delivering private, secure and trusted experiences Onboarded 2 of the top 10 Indian banks for secure and critical notification service. Successfully integrated and started processing messa
Slide 7: TRUBLOQ
TRUBLOQ Largest blockchain platform in the world in-terms of scale, transactions, and capacity. Protecting billion+ mobile subscribers from unsolicited commercial communication including spam & fraud • • Daily average of 1bn Volume market share-63% No of transactions (bn per quarter) 100.00 90.00 80
Slide 8: How Rapido empowers customers through engagement solutions
Building better conversations: How Rapido empowers customers through a suite of engagement solutions • Integrated driver on-boarding process on WhatsApp • Conversational promotional campaigns to maximize bookings • 60%-70% increase in number of people who engaged with WhatsApp • 52% increase in App
Slide 9: Dhani Loans and Services customer engagement with SMS & Voice
Dhani Loans and Services, a leading next gen online financial services company built a great customer engagement with SMS & Voice • High volume campaigns with 24X7 support • Scalable infrastructure: Increase daily traffic to 20-24mn with 80% average successful deliverables • Spot early warning and p
Slide 10: Tanla's solutions help one of the largest PSU banks
Tanla’s solutions help one of the largest PSU bank to deliver meaningful experiences and better engagement for its customers • Launched “Virtual Connect” on WhatsApp which is their “Always on” service for information and service on demand • This has been made available in 4 different Indian language
Slide 11: Revenue expansion across customers segments
Revenue expansion across customers segments (₹ million) • Customers with revenue > ₹10M+ 8,589 have grown 36% YoY 5,048 • Customers with revenue > ₹500M +36% +59% contributed 57% in Q3 21-22 as 6,326 against 49% in Q3 20-21 2,466 3,175 +11% 2,226 +16% 1,075 925 Q3 20-21 Q3 21-22 Q3 20-21 Q3 21-22 Q3
Slide 12: Deepening existing customer relationships
Deepening existing customer relationships (No of customers) • 189 customers with annual revenue of ₹ 10M+ up from 159 189 customers in Q3 20-21 128 +19% 43 +14% • 18 customers with revenue > 112 +19% 159 36 ₹ 500M up from 11 in Q3 20-21 18 +64% 11 • Increase in count due to smaller customers scaling
Slide 13: Average ₹10M+ customers continue to grow
Average ₹10M+ customers continue to grow (₹ million) Average revenue from ₹ 10M+ ₹ 49 customers at ₹ 45 million, growth 45 ₹ 44 of 14% YoY +14% 40 ₹ 39 ₹ 34 ₹ 29 ₹ 24 Q3 20-21 Q3 21-22 Customer segments are arrived at on a quarterly annualized basis (quarter revenue multiplied by four) 12
Slide 14: New customers addition driving growth momentum
New customers addition driving growth momentum (No of customers) (₹ million) In 9M 21-22, we added 237 new Revenue from new customers for customers as against 206 9M 21-22 at ₹ 571 million as against additions in 9M 20-21 ₹ 504 million in 9M 20-21 571 237 +13% +15% 504 206 9M 20-21 9M 21-22 9M 20-21
Slide 15: Reducing customer concentration
Reducing customer concentration Revenue from our top 20 customers Top 20 customer concentration as a % is increasing of revenue is decreasing (₹ million) 66% 63% 6,000 5,295 +28% 60% 4,500 4,123 60% 3,000 54% 1,500 Q3 20-21 Q3 21-22 48% Q3 20-21 Q3 21-22 Revenue Percentage of revenue 14
Slide 16: Operating above Rule of 40
Operating above Rule of 40 60% 65% 58% 45% • SaaS companies target to 31% 37% 40% operate at Rule of 40 (revenue growth + EBITDA%) 44% 38% 35% • Consistently operating at levels significantly higher than 24% 22% 23% 20% 21% 21% 21% Rule of 40 15% 16% 17% 19% Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21
Slide 17: Strong consistent Revenue growth
Strong consistent Revenue growth 44% 38% 35% • Revenue growth led by increased 15% 20% 21% 24% 8,849 volumes, price increase and 8,416 growth in OTT channel 6,541 6,486 6,264 5,832 • Growth driven by BFSI, Wholesale 4,555 and Government Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22 Q2 21-22 Q3 21-22
Slide 18: Continued expansion in Gross Profit
Continued expansion in Gross Profit (₹ million) 37% 36% 55% 58% 65% 71% 62% • Gross Profit growth of 62% YoY 2610 • Gross margin % has improved 486 2,302 29.5% basis points year-over-year in 1,769 27.4% 1,734 Q3 21-22 1,612 27.3% 27.7% 1,343 24.6% 1,053 23.0% • Platform business gross margin 23.1% c
Slide 19: Gross margin mix
Gross margin mix • Enterprise business gross 17% 23% 28% 25% 31% 25% 23% margin at ₹ 2012 million in Q3 21-22, up 73% YoY 83% • Platform business gross 77% 72% 75% 69% 75% 77% margin at ₹ 598 million in Q3 21-22, up 33% YoY Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22 Q2 21-22 Q3 21-22 Enterprise Pl
Slide 20: Improving efficiency metrices
Improving efficiency metrices (₹ million) 78.8% 77.5% 77.6% 77.7% 75.7% • Consistent conversion of Gross 71.2% 72.6% profit to EBITDA • Salary cost at 14.5% of gross profit 2,610 in Q3 21-22, as against 12.4% in 2,302 2,028 Q3 20-21 1,769 1,734 1,787 1,612 1,343 1,269 1,340 1,345 • Other indirect co
Slide 21: Quarterly EBITDA cross ₹ 2Bn
Quarterly EBITDA cross ₹ 2Bn (₹ million) 210% 140% 129% • EBITDA growth of 60% YoY 99% 79% 83% 60% • Salary cost has increased to 4.3% of 2,028 revenue from 3.1% in Q3 20-21, 1,787 22.9% primarily driven by new additions and 21.2% RSU cost 1,269 1,340 1,345 975 19.4% 20.7% 21.5% • Other expenses hav
Slide 22: EBIT grew by 62% YoY
EBIT grew by 62% YoY (₹ million) 1,917 21.7% • EBIT has improved 363 bps in 1,683 20.0% Q3 21-22 1,248 1,254 1,180 19.2% 20.0% 18.0% • Depreciation increased primarily 876 15.0% 635 due to capitalization of Wisely 13.9% Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22 Q2 21-22 Q3 21-22 EBIT EBIT margin
Slide 23: Free cash flow profile
Free cash flow profile (₹ million) • Free cash flow at ₹ 302 million for Q3 21-22 is lower on the back of very strong cash flows in Q2 21-22 2,217 2,147 • Combined free cash flow for 9M 21-22 would be at 95% of profit after tax 1,534 1,361 1,285 • Lower cash flow due to: o Increase in DSO from 48 da
Slide 24: Cash & cash equivalents
Cash & cash equivalents (₹ million) CCE • Restricted cash balance 8,457 8,807 7,171 decreased due to revision in 5,841 4,493 cash credit limits held across 2,470 2,339 various banks Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22 Q2 21-22 Q3 21-22 CCE composition 5,287 4,055 3,698 3,295 3,006 2,167 843
Slide 25: Cash & cash equivalents break up
Cash & cash equivalents break up Current Current Fixed Restricted In ₹ millions, unless otherwise stated Total accounts-INR accounts-USD Deposits cash HDFC Bank 349 358 2,601 78 3,386 HDFC Limited - - 1,600 - 1,600 LIC Housing Limited - - 200 - 200 State Bank of India 7 - 418 - 425 Axis Bank 36 - 34
Slide 26: Profit after tax grew by 69% year-over-year
Profit after tax grew by 69% year-over-year (₹ million) 1,580 17.9% • Profit after tax at ₹ 1,580 million in 1,362 16.2% Q3 21-22, up 69% from Q3 20-21 1,045 1,025 935 16.7% 815 15.8% • Profit after tax margin improved by 786 14.0% 14.3% 17.3% 356 basis points to 17.9% in Q3 21-22 Q1 20-21 Q2 20-21
Slide 27: EPS grew 70%
EPS grew 70% (₹) 11.66 • Earnings per share at ₹ 11.66 in 10.04 Q3 21-22, up 70% from Q3 20-21 7.54 7.68 6.87 5.85 5.17 • EPS growth driven by combination of PAT growth and lower equity shares due to buyback Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22 Q2 21-22 Q3 21-22 EPS 26
Slide 28: Strong ROCE
Strong ROCE • ROCE at 170% excluding cash ROCE (excluding CCE) ROCE( including CCE) • Reflects cloud focused innovation led business model 170% 51% 101% 45% 9M 20-21 9M 21-22 9M 20-21 9M 21-22 ROCE- Return on capital employed CCE- Cash & cash equivalents 27
Slide 29: Strong balance sheet
Strong balance sheet ₹ 12,057 million Strong Equity and Reserves ₹ 8,807 million Robust build up of cash & cash equivalents 170% ROCE (excluding cash & cash equivalents) Debt free 28
Slide 30: ESG achievements in Q3 21-22
ESG achievements in Q3 21-22 Environmental Social Governance Steps towards creating a greener and Giving back to the society and developing Integrating ESG in our business and cleaner tomorrow our employees formally committing to ESG principles Towards Net-zero For our employees Transparency & Good
Slide 31: ESG targets in Q4 21-22
ESG targets in Q4 21-22 Environmental Social Governance Steps towards creating a greener and Giving back to the society and developing Integrating ESG in our business and cleaner tomorrow our employees formally committing to ESG principles Towards Net-zero For our employees Transparency & Good Gover
Slide 32: Welcome to the future of CX
Every interaction is an opportunity, and every experience matters Welcome to the future of CX. Sonia I am motivated by a common purpose: delivering a stellar customer experience. Team Tanla.
Slide 33: Appendix
Appendix
Slide 34: Profit & Loss account: Third Quarter & 9M 21-22
Profit & Loss account: Third Quarter & 9M 21-22 In ₹ million, unless otherwise stated Q3 21-22 Q3 20-21 ∆% 9M 21-22 9M 20-21 ∆% Revenue from operations 8,849 6,541 35 23,529 16,929 39 Cost of services (6,239) (4,930) 27 (16,882) (12,921) 31 Gross profit 2,610 1,611 62 6,647 4,008 66 Operating expens
Slide 35: Balance sheet- December 31, 2021
Balance sheet- December 31,2021 In ₹ million, unless otherwise stated Dec 31, 2021 Dec 31, 2020 In ₹million, unless otherwise Dec 31, 2021 Dec 31, 2020S (Unaudited) (Unaudited) stated (Unaudited) (Unaudited) ASSETS EQUITY AND LIABILITIES Non-current assets Equity share capital 136 136 Property, plan
Slide 36: Condensed Cash flow statement
Condensed Cash flow statement In ₹ million, unless otherwise stated Q3 21-22 Q2 21-22 Q1 21-22 Cash flow before changes in working capital 2,125 1,836 1,381 Changes in working capital (1,527) 846 137 Cash generated from operations 598 2,682 1,518 Taxes (180) (326) (142) Cash flow from operating acti
Slide 37: Free cash flow profile
Free cash flow profile In ₹ million, unless otherwise stated Q3 21-22 Q3 20-21 ∆% Operating cash flow 418 2,252 (81) Capital expenditure (116) (105) +11 Free cash flow 302 2,147 (86) Free cash flow in percent of total revenue 3.4% 33% - Free cash flow conversion rate 15% 169% - 36
Slide 38: Key metrics: Third Quarter 21-22
Key metrics: Third Quarter 21-22 Gross Profit EBITDA PAT Gross Profit to ROCE EBITDA conversion (excluding CCE) +486bps +352 bps +356bps -105 bps +6,900 bps 29.5% 22.9% 17.9% 77.7% 170% Q3 20-21 Q3 21-22 Q3 20-21 Q3 21-22 Q3 20-21 Q3 21-22 Q3 20-21 Q3 21-22 Q3 20-21 Q3 21-22 37
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Slide 40: Q3 Shareholder Report: April - December 2021
Q3 TANLA.COM Shareholder Report: April - December 2021 October - December 2021 April - December 2021 y Revenue increased by 35% year-over-year to ₹8,849 million. y Revenue increased by 39% year-over-year to ₹23,529 million. y Gross profit increased by 62% year-over-year to ₹2,610 million. y Gross pr
Slide 41: Message from Chairman
Message from Chairman “Wish you all a very happy, healthy and prosperous New year. We have delivered year-on-year growth for 22 quarters in a row. Our revenues have gone up 9X during this period. I am proud to say that growth is a habit for Tanla. Q3 21-22 further demonstrated this trend with Revenu
Slide 42: Tanla Overview
Tanla Overview For the list of definitions please refer to page 16 Three months Ended Nine months Ended (In ₹ million, unless otherwise stated) December 31 December 31 21-22 20-21 21-22 20-21 20-21 R12M (Unaudited) (Unaudited) (Audited) Revenue from operations 8,849 6,541 23,529 16,929 23,415 30,015
Slide 43: Quarterly Trends
Quarterly Trends Revenue Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 (In ₹ million) 19-20 19-20 20-21 20-21 20-21 20-21 21-22 21-22 21-22 Platform 236 209 185 327 477 463 555 624 658 Enterprise 5,154 5,012 4,370 5,505 6,064 6,023 5,709 7,792 8,191 Total 5,390 5,221 4,555 5,832 6,541 6,486 6,264 8,416 8,849 Gross pro
Slide 44: Profit/(loss) after tax
Profit/(loss) Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 after tax 19-20 19-20 20-21 20-21 20-21 20-21 21-22 21-22 21-22 (In ₹ million) Profit/(loss) 7 (891) 786 815 935 1,025 1,045 1,362 1,580 after tax Profit after tax 0.1% - 17.3% 14.0% 14.3% 15.8% 16.7% 16.2% 17.9% margin Earnings per Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 45: Management Discussion & Analysis
Management Discussion & Analysis October - December 21-22 Revenue Revenue grew by 35% year-over-year to ₹ 8,849 million, driven by increased volumes in existing business verticals of BFSI, Wholesale and Government, price change and growth in OTT channels. Platform revenue grew by 38% year-over-year
Slide 46: Cash & cash equivalents composition
Average fixed deposit balance for the quarter was ₹4,263 million, generating 3.8% average yield on fixed deposits with HDFC Bank, Axis Bank, State Bank of India, Kotak Bank, IDBI bank, HDFC Limited and LIC Housing Limited which is in line with our investment policy. We were able to implement sweep-i
Slide 47: Cash flow, Customers, Customer segment
Cash flow On a year-over-year basis, Cash and cash equivalents (CCE) increased from ₹4,493 million in Q3 20-21 to ₹8,807 million in Q3 21-22. CCE increase is primarily driven by robust growth in revenue and effective working capital management. Cash generated from operations at ₹ 4,149 million and F
Slide 48: April to December 2021
April to December 2021 Revenue Revenue grew by 39% year-over-year to ₹23,529 million, led by combination of increased volumes our existing business, new customers, change in price, growth in OTT channel, and new use cases. Platform revenue grew by 86% to ₹1,836 million, benefited by creation of new
Slide 49: Condensed Income Statement
Condensed Income Statement Three months Ended Nine months Ended (In ₹ million, unless otherwise stated) December 31 December 31 20-21 R12M 21-22 20-21 21-22 20-21 (Unaudited) (Unaudited) (Audited) (Unaudited) Revenue from operations 8,849 6,541 23,529 16,929 23,415 30,015 Cost of services (6,239) (4
Slide 50: Condensed Balance Sheet
Condensed Balance Sheet Particulars Dec 31, 2021 Dec 31, 2020 (In ₹ million) (Unaudited) (Unaudited) ASSETS Non-current assets Property, plant and equipment 270 289 Platforms 560 97 Customer Relationships 288 413 Brands 12 48 Technology 19 47 Non-Compete 32 38 Intangible assets under development 277
Slide 51: Condensed Statement of Cash Flow
Condensed change in equity statement Equity Statement Retained Other Share capital Reserves Total (In ₹ million) earnings contributions Opening balance 146 6,877 (164) 159 7,017 01 April 2020 Profit for the period - - 2,536 - 2,536 Other comprehensive - - - (51) (51) income Issue of equity shares 7
Slide 52: Key Ratios and Equity Capital
Key Ratios Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Key financial ratios 19-20 19-20 20-21 20-21 20-21 20-21 20-22 21-22 21-22 Rule of 40 103.1% 75.4% 31.9% 36.4% 40.7% 44.9% 60.0% 65.5% 58.2% Revenue growth 91.3% 64.2% 15.5% 19.7% 21.3% 24.2% 38.0% 44.3% 35.3% Gross margin 19.3% 21.4% 23.1% 23.0% 24.6% 27.3% 27.
Slide 53: Key Policies
Key Policies Basis for preparation of financial statements The Consolidated financial statements of the Group have been prepared in accordance with Indian Accounting Standards (“Ind AS”) as notified under Section 133 of the Companies Act, 2013 (the “Act”) read with Rule 3 of the Companies (Indian Ac
Slide 54: Risk Management policy and Related Party Transaction Policy
Risk Management policy: We are affected by general economic, financial, and regulatory developments at the domestic and international level, as well as by condi- tions specific to certain countries or regions. We have put in place a structure, procedures, and control systems to detect risks and impl
Slide 55: Definitions
Definitions Platform business segment Free cash flow Platform business segment refers to all revenue generated Free cash flow is derived by reducing capital expenditure from from “Platform as a service offering” where only cloud and operating cash flow. It measures how much cash is at disposal hosti
Slide 56: About Tanla: Forward-looking statements
About Tanla: Forward-looking statements Tanla Platforms Limited transforms the way the world collabo- This document might contain statements that are forward look- rates and communicates through innovative CPaaS solutions. ing in nature. All statements other than statements of historical Founded in