IT Sector Midcap Stock Trading 3.67% Away From 52-Week High, Buy For TP Of Rs 1350: HDFC Securities

IT Sector Midcap stock Tanla Platforms Ltd gets a Buy from HDFC Securities for a target price of Rs 1350 per share. The stock is showing 22% upside potential with the estimated target price. The stock hit a new 52-week high on July 17, 2023, at Rs 1,157 per share, currently trading 3.67% away from its 52-week high. The stock has a market cap of Rs 14,986.98 Crore.

Buy for a target price of Rs 1350

According to HDFC Securities, Tanla is expected to witness growth acceleration, led by a revival in the Enterprise business (volume uptick and ILD price hike) and traction in the Platform business (new product launches). The growth in Enterprise business will be driven by (1) a continued surge in transactional SMS traffic, led by UPI and OTP; (2) a price hike of ~30% in ILD rates in Q1; (3) the acquisition of ValueFirst, which will lead to market share gains and pricing power; and (4) client-specific issues being over and enterprise gross margins back at 20% level.

The growth in the platform segment will be powered by Wisely platforms and continued strength in Trubloq. Wisely Anti-phishing (ATP) is a promising product, which has received Sandbox approval from TRAI and is under POC with three large banks. The EBITDA margin which was impacted in Q1FY23 has returned to normal level in Q4FY23. The ValueFirst integration in Q2FY24E will impact margins by ~150bps but cost synergies will lead to gradual margin expansion.

"We expect revenue/EPS CAGR of 24/26% (organic 18/20%) over FY23-26E and upgrade our EPS estimate by 11/12% for FY24/25E to factor in acquisition and growth uptick. We maintain our BUY rating and assign a TP of INR 1,350, based on 23x June-25E EPS. The stock is trading at a P/E of 20x FY25E," the brokerage has said.

Stock Outlook

Tanla Platform Stock's current market price (CMP) is Rs 1115.10 per share, up 0.78% from its previous close. It is trading 3.67% down from its 52-week high, which it hit on July 17, 2023, at Rs 1157 per share. It traded at its 52-week low is Rs 506.10 per share. The stock's market cap is Rs 14,986.98 Crore.

It gave 2.61% positive return in 1 week, 6.22% in 1 month, and 12.64% in 3 months, respectively. It jumped 22.51% in 1 year, 27.67% in 2 years, 81.25% in 3 years, and 84.58% in 5 years, respectively.

Disclaimer - The stock has been picked from the brokerage report of HDFC Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.