Tanla Platforms Ltd · NSE:TANLA
Tanla Platforms — Q2 FY23 Earnings Presentation
38 slides from Tanla Platforms's earnings presentation, Oct 20, 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 October 20, 2022 To, BSE Limited National Stock Exchange of India Ltd. Phiroze
Slide 2: Q2 FY23 Investor Update
Q2 FY23 Investor Update Tanla Platforms Limited
Slide 3: Disclaimer
Disclaimer 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: Q2 FY23 Results: Snapshot
Q2 FY23 Results: Snapshot Revenue Gross Profit EBITDA Operating cash flow ₹ 8,510 Mn ₹ 2,056 Mn ₹ 1,395 Mn ₹ 41 Mn 1% Growth 11% De-growth 16.4% Margin 4% of PAT PAT Earnings Per Share Cash ₹ 1,104 Mn ₹ 8.14 ₹ 8,552 Mn 13.0% Margin Up by ₹100 Mn 3
Slide 5: Innovation
Innovation Business Financials Corporate 4
Slide 6: Platform Innovation: Evidence of success
Platform Innovation: Evidence of success … driven by significant Platform business delivered robust financial performance in Q2 FY23 momentum across key modules Q2 FY22 Q2 FY23 Exclusive multi-year partnership Gross margin 578 724 Largest DLT scrubbing platform in India – 64% volume (₹ Mn.) Exclusiv
Slide 7: Wisely Trust: blockchain compliance platform
1. Key Details Evidence of our success Gap to World’s first blockchain-enabled competition compliance platform GM growth 29% (Y-O-Y) Customer Largest DLT scrubbing platform in India ₹ – 64% volume ₹ adoption ₹ 100% volume in UAE Partnership with 7 telcos across UAE Volume 85 bn (Q2) and India Impact
Slide 8: Wisely Communicate
2. Wisely Communicate: Our differentiated proposition for enterprises Progress so far 1 End-user data 4 Real time settlement Customers Scaling up two banking protection through 100% reports for zero E2E encryption through dispute settlements customers cryptographic Active discussions with top algori
Slide 9: Wisely OTT
3. Wisely OTT Customers already closed / in advanced Delivering a market beating proposition with advanced conversations on Truecaller features and functionalities • Q2 volume of ~700 Mn across existing Superior user experience Advanced messaging customers customers capabilities • No. of customers i
Slide 10: Wisely Network
4. Wisely Network ILD leakage VIL to be a lighthouse case for replication of intelligent Firewall solution with prevention for Telcos prominent telcos globally for ILD leakage prevention AI/ML based firewall to prevent ILD leakages deployed AI-ML-NLP backed Firewall processing over 35Bn messages acr
Slide 11: Wisely Engage
5. Wisely Engage Re-imagining our vision for performance marketing Progress so far Automated Multiple Unique AI/ML Last mile platform channels data backed Attribution Features built on Self-serve Large audiences on both 800+ attributes Best in class Attribute 2,000+ attributes campaign online and
Slide 12: Business
Innovation Business Financials Corporate 11
Slide 13: Expanding customer relationships
Expanding customer relationships Number of customers 208 ₹10 Mn-<₹100 Mn customers at 152, 175 grew by 20% 19 >₹100 Mn-<₹500 >₹500Mn 19 Mn customers at 37, grew by 28% 37 >₹100Mn-<₹500Mn 29 208 customers contributing >10 Mn annual revenue >₹10Mn-<₹100Mn 127 152 Q2 FY22 Q2 FY23 1. Customer segments a
Slide 14: Customer Segments
Customer Segments (₹ Million) 36% revenue Growth in ₹10 Mn- 8,266 <₹100 Mn 8,188 Decline in revenue 5,037 of customers >₹ 500 Mn due to lower volumes – count of >₹500Mn 5,382 customers remain same 1,902 >₹100Mn-<₹500Mn 1,824 Product penetration of 2 >₹10Mn-<₹100Mn 982 1,327 improved from 1.6 a year
Slide 15: New customer addition
New customer addition Revenue (₹ Million) Number of customers 160 143 45% of new customers on non-SMS 170 channels like WhatsApp 126 ₹ Targeted focus on new customers in the ₹ digital native segment ₹ H1 FY22 H1 FY23 14 1. New customers include every unique contracting entity added during the year
Slide 16: Reduction in customer concentration
Reduction in customer concentration Revenue from top 20 customers (₹ Million) 66 % 60% ₹ ₹ ₹ 14 out of 20 customers of last year continue to be in Top 20, 17 remain in Top 30 5,504 5,146 Q2 FY22 Q2 FY23 1. New customers include every unique contracting entity added during the year 15 2. Customer seg
Slide 17: Financials
Innovation Market Financials Corporate 16
Slide 18: Revenue growth on a sequential basis
Revenue growth on a sequential basis (₹ Million) Y-o-Y growth 44% 35% Revenue grew by 1% in Q2 32% 28% FY23. QoQ revenue grew by 6% 1% 8,849 8,531 8,510 8,001 8,416 Growth led by Platforms and WhatsApp but impacted by lower revenues from our Top customers in Enterprise business Q2 FY22 Q3 FY22 Q4 FY
Slide 19: Gross Margins on improving trajectory from Q1
Gross Margins on improving trajectory from Q1 (₹ Million) Y-o-Y growth Improvement in gross margins by 1.1% QoQ 71% 62% 38% 7% Enterprise business (11%) ₹ improved gross margins – 2,610 2,434 ₹ we are on an improving 2,302 ₹ trajectory 1,850 2,056 Platform business gross margin grew by 25% at ₹ 724
Slide 20: Gross margin mix
Gross margin mix B A Decrease in gross Platform margin by 319 bps business 95% 96% 96% 91% 93% Overall margin B Platform business A Q2 Q3 Q4 Q1 Q2 FY22 FY22 FY22 FY23 FY23 gross margin contribution to total 27% 29% 29% 23% 24% at 35%, improved by 10% Q2 Q3 Q4 Q1 Q2 C FY22 FY22 FY22 FY23 FY23 C QoQ e
Slide 21: Efficiency metrics
Efficiency metrics EBITDA Gross Profit EBITDA to Gross Profit conversion Salary cost at 19% of gross 78% 68% profit in Q2 FY23 as against 14% in Q2 FY22 impacted by yearly salary increments and RSU cost 2,302 2,056 1,787 Other indirect cost at 14% of gross profit (up from 8% last 1,395 year) impacte
Slide 22: EBITDA and EBIT
EBITDA and EBIT (₹ Million) EBITDA Salary cost increased by ₹ 50 Mn on ₹ 2,028 1,841 ₹ YoY, driven by salary increments and 1,787 ₹ RSU cost 1,307 1,395 Euro depreciated at 6% on QoQ, Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 resulting in translation loss of ₹ 68 Mn EBIT 1,917 1,739 1,214 Platform cos
Slide 23: Free cash flow
Free cash flow (₹ Million) Operating cash flow at 4% of PAT. Lower generation of operating cash flow due to investments made towards 2,217 strategic partnerships of around ₹680MN 718 444 Decrease in DSO days 74 days in Q1 302 FY23 to 61 days in Q2 FY23 (416) Investments in platforms and tax payouts
Slide 24: Cash generated utilized for distribution to shareholders & capital investments
Cash generated utilized for distribution to shareholders & Capital investments (₹ Million) 138 11 (48) (1,086) (1,092) 2,172 8,552 8,457 Opening Operating Interest & Issue of Lease Dividend Capital Closing CCE (Sep cash flow other shares liabilities - paid investments CCE (Sep 30 2021) income net 30
Slide 25: Significant cash utilization towards return to shareholders
Significant cash utilization towards return to shareholders CCE (₹ Million) Q1 FY23 Q2 FY23 Return of cash to shareholder in form of dividend pay-out of ₹1,086 Mn including taxes Decrease in U.S. Dollar current balance due to payment of dividend by 5,957 subsidiary to the parent and working 5,763 ca
Slide 26: Cash & cash equivalents break up
Cash & cash equivalents break up In ₹ Million, unless Current Current Fixed Deposits Restricted otherwise stated accounts-INR accounts-USD cash Total 480 60 3,020 156 3,716 - - 2,000 - 2,000 20 - 295 - 315 80 - 396 - 476 24 - 166 - 190 - 138 - - 138 - 1,492 - 29 1,521 110 - 54 - 164 Others 6 - 26 -
Slide 27: Profit after tax and EPS
Profit after tax and EPS PAT (₹ Million) 1,580 1,362 1,406 Profit after tax margin at 13%, 1,004 1,104 decreased by 321 bps due to drop in EBITDA Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 EPS (₹) ₹ Effective tax rate at 21% ₹ ₹ 10.04 11.66 10.36 7.40 8.14 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 26
Slide 28: ROCE
ROCE 54% 51% 47% ROCE at 74% excluding CCE as against 247% last year 32% 33% Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 ROCE- Return on capital employed CCE- Cash & cash equivalents 27
Slide 29: Strong balance sheet
₹ 14,867 Mn Strong Equity and Reserves ₹ 8,552 Mn Strong Cash & cash equivalents balance sheet 74% ROCE (excluding cash & cash equivalents) Debt free 28
Slide 30: Rule of 40
Rule of 40 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Organic 44% 35% 32% 28% 1% revenue growth EBITDA Margin 22% 23% 22% 16% 16% 66% 58% 53% 44% 17% 29
Slide 31: Corporate
Innovation Market Financials Corporate 30
Slide 32: ESG Update in Q2 FY23
ESG Update in Q2 FY23 S&P Global ESG 2022 Tanla S&P Global ESG Score : 32 pts Percentile: 93-94 Score 2022 (Industry Average Score: 18 points) Environmental Social Governance Steps towards creating a Giving back to the society and developing our Integrating ESG in greener & cleaner tomorrow employee
Slide 33: Update on corporate action
Update on corporate action Dividend Final dividend for FY22 and interim dividend for FY23 has been approved and disbursed to shareholders. Total payouts of ₹1,086 Mn including taxes The Company proposes to buyback shares at ₹ 1,200 per share for an aggregate amount not exceeding ₹ 1,700 Mn Buyba
Slide 34: Appendix
Appendix 33
Slide 35: Profit & Loss account: Q2 FY23
Profit & Loss account: Q2 FY23 In ₹ Million, unless otherwise stated Q2 FY23 Q2 FY22 ∆% Q1 FY23 Revenue from operations 8,510 8,416 1 8,001 Cost of services (6,454) (6,114) 6 (6,151) Gross profit 2,056 2,302 (11) 1,850 Operating expenses (661) (515) 28 (543) EBITDA 1,395 1,787 (22) 1,307 Depreciatio
Slide 36: Unaudited Balance sheet - Sep 30, 2022
Unaudited Balance sheet- Sep 30,2022 In ₹ Million, unless otherwise In ₹ Million, unless otherwise Sep 30, 2022 Sep 30,2021 Sep 30, 2022 Sep 30,2021 stated stated ASSETS EQUITY AND LIABILITIES Non-current assets Equity share capital 136 135 Property, plant and equipment 492 317 Other equity 14,731 1
Slide 37: Condensed Cash flow
In ₹ Million, unless otherwise stated Q2 FY23 Q1 FY23 Cash flow before changes in working capital 1,449 1,513 Changes in working capital (1,046) (278) Cash generated from operations 403 1,235 Taxes (362) (270) Cash flow from operating activities 41 965 Net investments in tangible and intangible asse
Slide 38: Free Cash flow
Free Cash flow In ₹ Million, unless otherwise stated Q2 FY23 Q2 FY22 ∆% Q1 FY23 Operating cash flow 41 2,356 (98) 965 Capital expenditure (457) (139) 228 (247) Free cash flow (416) 2,217 (118) 718 Free cash flow in percent of total - 26% - 9% revenue Free cash flow as % of PAT - 162% - 71% 37