Ladies and gentlemen, good day, and welcome to Tanla Platforms Limited Q1 FY23 earnings conference call. As a reminder, all participant lines will be in a listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ritu Mehta from Tanla Platforms Limited. Thank you, and over to you.
Hello, everyone. I'm Ritu Mehta, and I lead investor relations for Tanla Platforms. On behalf of everyone at Tanla, I would like to welcome you to our Q1 earnings call. Joining us today are Uday Reddy, our Founder, Chairman, and CEO, Deepak Goyal, Executive Director and Chief Business Officer, and Aravind Viswanathan, our CFO. Uday Reddy, our Founder, Chairman, and CEO, will share his perspectives on business imperatives and strategic progress made by Tanla. After his opening remarks, we'll be happy to engage with the participants and address their questions. Before I hand it over to Uday, let me draw your attention to the fact that today's discussion may feature statements that are forward-looking in nature. All statements other than statements of historical fact could be deemed forward-looking in nature. Such statements are inherently subject to risk and uncertainty, some of which cannot be predicted or quantified.
A detailed disclosure in this regard is mentioned in the results presentation that is uploaded on our website. Now over to Uday.
Yes. Thanks, Ritu. Good afternoon, everyone. A very warm welcome to our Q1 earnings call. I hope you had a chance to see our results. I will specifically cover two areas in this call before we go to Q&A. The first one is I will talk about the Q1 performance, and I also would like to give a quick update on the areas of strategic focus. After many quarters of consistent performance, we have had operational headwind in Q1. We delivered 28% revenue growth in a seasonally weak quarter. We faced headwinds which affected our profitability.
We had internal and external factors affecting us, and let me give you a view of the same. We had some challenges with our Karix platform. We have seen significant growth over the past few years in terms of volumes, and we needed to upgrade our current infrastructure to meet the scale requirements and deliver top-notch customer experience. This caused some short-term impact on our EBITDA. However, I firmly believe this was the right thing to do from a longer-term perspective, and we don't see any EBITDA impact due to this going forward. The second aspect was unfavorable exchange movement between euro and dollar, and this affected our EBITDA by almost 1%.
We also had some market disruption with some customer, a specific impact, I mean, this was a specific impact affecting our profitability in Q1. In total, we had a cumulative impact on EBITDA of almost around 4.5% due to these factors. We expect that most of the impact is one-off, and we should get back to operating at the levels around 20% in the next two quarters. On the overall market, I'm quite excited about the potential here. We continue to grow our existing clients and add market new clients. Our platform business grow around 23% year-on-year and operated at 95%+ gross margins. We are making significant progress on our Wisely journey.
We have deployed our AI/ML based firewall with the VIL, and it went live in Q1 and it is expected to scale in Q2. We also have launched Wisely Insights. I have personally taken these insights and discussed this with the global tech giants, and I see tremendous traction with them, which should translate to more business for us in the coming quarters. We have launched Truecaller towards the end of Q1. Our beta launch was very successful, and we now see a lot of traction in Q2. We are seeing a lot of interest from enterprise customers and very excited by our potential here. We also announced our exclusive partnership with Kore.ai, a leading conversation platform around Wisely.
As you can see, multiple components of our strategy are coming together well, and we have built a solid foundation, and I'm confident we will deliver profitable growth in the coming quarters. Now, I would like to hand over to Ritu to carry our Q&A.
Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have the first question from the line of Aniket Pande from ICICI Securities. Please go ahead.
Hi. Thank you for the opportunity. I just wanted to get some clarity on margins actually. Apart from the currency headwinds, sir, are you seeing increased pricing cuts in the industry due to increased competitive intensity in the industry in last two-three quarters? Secondly, sir, in your PPT you have mentioned headwinds such as market disruption and modernization also. Can we know in detail exactly what are you referring to in that?
Sure. You know, you have two questions there, right? One in terms of the overall pricing environment in the market. I will ask Deepak to cover that. I will, you know, we will come to your second question on this entire platform modernization piece and we can cover that. So, Deepak?
Thank you.
Deepak, I think you're on mute. I request you to unmute and proceed.
Hi. Good evening, everyone. Deepak here. As the question about, you know, pricing environment in last two-three quarters. I would say, pricing environment per se is overall stable. You know, we, you know, overall, we don't see any, you know, pricing competition as such. Okay? Though it's, you know, though it's always a little bit of, you know, price erosions are there, but this is very normal for our industry.
As Uday mentioned, we have seen in one of our large customers, you know, where we are getting significant volumes and, you know, there we have seen pricing, you know, being quoted much lower, which didn't make sense to us to work on those prices. We decided to scale down our volumes with that customer. While you know, the transition was taking place to the other providers, you know, we had to serve at those prices, you know, in Q1. Hence we saw, you know, our margins going down. That impact may be there for some part in Q2 as well, but going forward, I don't see any issue.
Thank you.
Thank you. The next question is from the line of Balaji Subramanian from IIFL. Please go ahead.
Thanks for taking my question. My first question would be on this pricing pressure aspect. We did see that one large customer was offered lower prices by one of your competitors. Is this one-off in nature or is there a risk that the same competitor, which I believe is a large telco with a fairly strong balance sheet and focusing aggressively on the enterprise segment, is there a risk that it offers, you know, similar pricing in other accounts and we will probably, you know, face incremental pressure even if this particular customer sees volume ramp down? That is number one.
Number two is with the scale down in volumes with the first customer that you mentioned, you know, what should one think about your as your revenue growth for going forward? Because we have been seeing that in the last two, three quarters, the revenues have been largely range bound between INR 800 crore and INR 900 crore. And the YOY numbers still look good because of the tailwind from the ILD SMS rate increase. But now going into 2Q, that will anniversarize and you know, the YOY comps might get difficult. That's from me.
Deepak, would you want to address that?
Yeah, sure. Hi, Balaji. I would like to say that, you know, we have seen, you know, multiple bids after this particular bid, okay? I've not seen anything like that. I would say this is a one-off, where, you know, our competitor just decided to quote whatever they quoted. I'm sure they must have realized, you know, what they have done because I've not seen anything happening afterwards. Because in Q1, you know, it generally after two or three years, there are so many bids get due from certain amount of customers. I don't see an issue going forward.
As far as our, you know, revenue is concerned, definitely you know when there is some sort of a price you know erosion then, you know, it impacts the revenues. We have been winning a lot of new businesses, lot of new customers, and you would see you know a growth in revenues in the coming quarters.
Okay. Deepak, that is helpful. Let me put the first question the other way. If I were the telco, which is, you know, wreaking havoc, and, you know, I have a fairly large enterprise business where, you know, CPaaS is one of the key elements, but I also have other offerings starting from connectivity, cloud, security, et cetera. You know, clearly there is some bit of flexibility on the CPaaS front because I can cross-subsidize some of this with some of my other offerings. What do you think would prevent such a large company from kind of, you know, going a little low on the competitive front going forward?
Because basically what I'm asking is: What gives you the comfort that, you know, they won't attempt something, like this, with more accounts?
Deepak, go ahead.
See, first of all, I cannot comment, you know, about their thought process. Okay? At the same time, as I said, that there are, you know, more bids have happened after that, and we have not seen something like this. I would say that this is one-off because the kind of prices were quoted, those are not viable for anybody to do that. It has nothing to do with what other offerings they have, because we also have other offerings, but we don't support such prices. I mean. Just to tell you, from the same account, we have won a very big WhatsApp business as well.
We feel that in the coming quarters, we would be back with the kind of, you know, revenues or the margins we are making, you know. We are very confident about it.
Okay. Thank you, Deepak. This is helpful. All the best.
Thank you.
Thank you.
Thank you. The next question is from the line of Ashish Rathi from Lucky Investments. Please go ahead.
Yeah, hi. Thanks for the opportunity. You know, in the media articles, we have read about this, NASSCOM making a case to RBI to change the regulation to include in-app notifications instead of SMS. You know, your understanding and take on the same, please, as it is a concern for us as investors in terms of overall sustainability and of our existing business model. Would love to get your perspective on this, please.
Yeah. Ashish, Uday here. See, this in-app message has been around for quite some time, right? This is not new technology which is available now, right? It has been there for quite some time. That's number one. Number two, it was never a successful model. In fact, if I'm allowed to name, all the tech giants have got the app sitting on the. For example, all the tech giants, their app sitting on your mobile phone. They can afford to use their in-app messaging, but still they use SMS, other channels to reach out to their customers because in-app messaging is not reliable. One should have data all the time for somebody to receive the messaging in terms of in-app. That's number one.
Number two, it is not reliable because SMS can deliver in less than 4 seconds from the time it leaves the enterprise to the handset. In terms of the in-app, we don't know. It may take a bit of time.
Yeah.
Okay? So I don't see any challenge there. Okay? In fact, the tech giants tried their best to use their apps to reach out to their consumers in India and globally, and they saw the result and they started using the SMS and other channels. I think it is blown out of proportion and we are quite indifferent to this article.
Sure. The whole case in point we are making is mostly about the pricing where the media article suggests that it's INR 0.12 per message versus in-app notification is like INR 0.001. You know, it could there be a case of a downward pressure on the revenues or the pricing that we have and that is something what the previous person also kind of indicated towards? What is your sense in the pricing at the company level in terms of SMS going forward? Is it something that is sustainable over a longer period of time or something that could possibly go down as a business?
Ashish, you know, we are in this business for more than 20 years, like, okay. So, SMS is a very secure d and more reliable as a channel, and it will remain in this space. In fact, as we speak, the volumes are going through the roof in the last couple of years. I don't see any challenge in terms of the channel per se. That's number one. In terms of price, Gautam, sorry, Deepak has already explained about the price. We don't see any challenge there. Everybody has to service their customer. Everybody has to earn their margins.
The couple of customers, for some reasons best known to them, may try to disrupt for one or two customers, but w e don't see any challenge with any other customers, either in terms of the price or in terms of anything other than that. We don't see any challenge. Absolutely no challenge at all. We will definitely grow. Our volumes are growing. We are growing much faster than industry. We don't see any challenge.
Thank you. The second question is on, you know, can you give us an indication of what percentage of revenue presently comes from SMS for banks and fintechs combined?
I'm afraid we cannot share. We have a bit of NDA with it on the bank. Yeah. Sorry?
30%. Roughly around 30%. We're not calling out the exact numbers, but that's the largest v ertical for us. That is where it is. The other point I would just make, Ashish, is that, you know, probably SMS is still one of the lowest costs in India compared to any other market, even if you take Asian markets. Some of this noise about, you know, for SMS being very expensive is not in congruence with what is happening in the globe.
In fact, Ashish, to put it into perspective, let's talk about the ILD prices in general in Asia, forget about other parts of world. Right from Sri Lanka to Bangladesh to Philippines, Indonesia, Vietnam, Middle East, Russia, like, you know, they are varying from $0.06 to almost $0.20. Okay? We are still at $0.03 until end of July. The Indian telcos made it to $0.04 recently. There is a long way to cover in terms of pricing, both domestic as well as international pricing. We are one of the lowest. I mean, our prices are very, very low when compared with the global markets.
Sure. The case in point then is about security. Like, in terms of in-app notifications versus the SMS, which one is more secure? And is there something, you know, which cannot be done by, say, an SMS in a foolproof manner, which maybe can be handled better by an in-app notification? Just technically, if you could help us understand.
I think it is proven that like, you know, SMS is more secure, both in terms of technology and so on, so forth, like, you know. That's the reason like, you know, RBI has mandated only SMS as a channel to use for the OTPs and other notifications, right? It clearly says that it's more secure channel than any other channel.
Also SMS effectively becomes a second level of security. It's not a standalone, right? Many cases the app talks to the SMS. Definitely it is more regulated, it's more secure. There are enough instances of that being documented across the globe.
Thank you. Thank you so much for the clarity. All the best.
Thank you.
Thank you. The next question is from the line of Anil Sarin from Centrum Wealth. Please go ahead.
Good evening, everybody. I wanted some clarity that this technology upgradation that has been done, how much money has been spent on that? Again, and the rest of the year, is there more money to be spent on technology upgradation? That is part one of my question. The second part is, you know, in continuation to the earlier, you know, the earlier person, is that despite this setback, for the full year, if you can give a rough estimate of revenue growth. You know, there are few pressures and pulls in terms of some disruptive pricing by somebody, the ILD tailwind going away, new clients getting added. It is quite a complex thing.
Like most IT services companies, they like to give out, you know, whatever revenue guidance. We would really appreciate if you can give us some revenue guidance, taking into account all the pluses and the minuses that you are currently seeing. These are the two questions that I have.
Anil, Uday here. Anil, I think we made it very clear a number of times, we don't give the guidance. That's number one. Having said that, I made it very clear today. We went back almost 16% levels in terms of EBITDA, but we should get back to operating at levels around 20% in the next couple of quarters. We are pretty confident we will come back to the 20% EBITDA margins in the next couple of quarters.
For the full year it will be 20% or you will recover to that level in the coming two quarters or for the full year? If we close the year fiscal 2023, that would be total EBITDA margin would be 20%.
Sorry, Anil, I lost a little bit. Can you please repeat?
My question was, will it be for the full year when we close the books of account for this financial year, 2023, it will be 20% margin or it is 16% this quarter, then improving and ultimately reaching 20%? Which of the two will it be?
I'm not confirming either, Anil. All I said was, we were operating at more than 20% for the last six quarters. Our priority is to get back to 20% as soon as possible. We have very clear strategy. We have lot to leverage, and we have seen this action in the Q2 itself. I think our top priority is to go back to 20% as soon as possible. Okay? I don't want really. I'm not saying that we're going to go back in the Q2 itself, but in the next two quarters, we are going to definitely reach 20%. That's our top first target.
Once you reach 20%, then we see how it goes from there.
Okay. On a related note, you know, any update you can give us about Wisely, post the two names that you had shared with us in terms of Vodafone and Truecaller? Any further update? Because the thinking that we have is that as Wisely gathers momentum, naturally the margins would go up.
Absolutely, Anil. Absolutely. I completely agree with you. The Truecaller, as I mentioned in that part of my speech, that beta launch was very, very successful. We went commercially live in Q2. All I can say is it's doing phenomenally well. It has really surprised all of us. Truecaller team and our teams are working very, very closely to take this Truecaller Wisely to the next level. I think we are pretty happy on the Truecaller relationships. That's number one. Number two, in terms of Wisely Vi network deployment, it got delayed a little bit because it's a very complex product. It is a gigantic product which we have to integrate it at different levels.
It got a bit delayed. Though we went live, still the bit of integration is still pending. We have started clocking the revenues in the Q1 itself, but we are expecting the momentum in Q2. To be honest with you, I'm pretty happy about Wisely journey so far.
Okay, one further.
This will definitely add to the better margin in total.
Okay, great. Yeah, just as a follow on, there was a note brought out by a broking firm, I think HDFC Securities, where they have mentioned that the market size, the total addressable market for Wisely is, you know, INR 1 billion-2 billion, basically in Indian rupee terms, INR 100-INR 200 crores. Now, I surely think that is a, it is a typo or, I mean, is that the market size that one is looking at for Truecaller, for Wisely?
Anil, I don't think HDFC said what you're referring to. I don't think they have mentioned INR 200 crores is the market, the TAM for Wisely. I don't think they mentioned that unless and until I missed out the point, which is not true, right? Total, if the CPaaS is 1.5 billion , which INR 10,000 crores market TAM in India alone. The total, INR 10,000 crore itself is a TAM for Wisely, the way I would like to look at. It's not only just INR 200 crore, it is complete, the complete market is a TAM for Wisely.
Okay, thanks for the clarification. Just one point that, like what was spent on the tech upgradation, and is it everything has been captured in the first quarter or more to come in the coming quarters?
Anil, what happens is like, you know, we continue to augment our platforms, because whenever we see it, we closely monitor our efficiencies of our platforms. Probably at the 60%, we always augment our platforms. What happened this time was, our volumes have gone through the roof in the Q4. By the time we were able to augment our Karix platforms, it took a little longer than what we expected to source software and hardware from outside India. That's where it completely derailed, but that was fixed then and there. You asked what is the investment that we made. I think around INR 15-INR 20 crores, which is already capitalized in Q1.
That's a big investment. Karix has now got a new platform which is pretty stable and it's holding well. Our customers are extremely happy with the new platform. It's a continuous work. We don't need to keep investing. It's one of the expenses, Anil.
Thanks so much. Just one last thing about it. Is it capitalized or is it expensed during the first quarter?
It's capitalized, Anil. Capitalized. Anil, the impact for the quarter is also because some of the disruptions that we had when we had those issues while upgrading, that flows into GM. Some of the operational costs flows into GM, but the big CapEx investment flows into depreciation, right? It's a combination of multiple line items here.
Okay. Okay. So the gross margin decline that the enterprise business has seen from 23% to 17%, that it contains both the impact of this software upgrade platform strengthening as well as that disruptive action taken by competition. Both of them are there.
Yes. Yes.
Okay. Part of it will not recur. The second part is obviously that is subject to how the market evolves.
Absolutely.
Okay. Thank you so much, and all the very best.
Thank you.
Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your question to two per participant. If time permits, you may join the queue for any follow-ups. Thank you. We have the next question from the line of Miraj Shah from Dalal & Broacha. Also, participants, please press star and one if you wish to ask a question. Thank you.
Thank you for taking my question. My question, sir, is regarding in the beginning of the call you mentioned that there was a one-time, one-off client impact, and you expect to recoup this revenue loss. You are expecting to recoup this from the same customer or from new customer addition?
Couple of things the way Deepak explained earlier is one, from the same customer, we have one, the WhatsApp business. In fact, the CMG went on live and they have mentioned that they're going to go live on the WhatsApp. We are the one who's going to provide the solutions and services to this largest bank. I think for time being, though we lost a bit of margin and the revenues, and we are pretty confident that we're going to
Recover revenue and margins from the same banks through different services. That's what Deepak has mentioned.
Right. Sir, related to that, the question was, are the switching costs so low pertaining to this business? Because, as far as we remember, in the earlier conference call, we had mentioned that switching costs are extremely high in this business.
You know, two points there, right? Even if you look at, you know, the switching costs are high here. In a sense that, even in this case, we continue to be a vendor, partner to the customer here, right? Although we've just chosen to scale down volumes. This is an industry which operates with a multi-vendor approach, and to that extent, you know, there is always switch once you integrate, right? We continue to be with the customer, although we have lower volumes. It's not that we are out of any customer. That way, you know, once you're integrated, you're integrated, but the volume split across the multiple partners can fluctuate between, you know, at times. Deepak, do you want to add anything more on this?
No, Arvind, you covered it. Yeah. There are, you know, always two to three vendors with any large customer. It just so happened that, you know, one of the vendors just decided to, of course, go very, very low on the prices to gain a larger share from that particular customer.
Ashish, let's be clear that, like, no, we've not lost this customer. We have been serving this customer, but we have decided not to service at the levels that they want us to service. We are still getting the traffic, but like, you know, we're not happy with the current commercials.
Sure. Sure. Thank you so much and best of luck for the future.
Thank you.
Thank you.
Thank you. The next question is from the line of Amit Chandra from HDFC Securities. Please go ahead.
Yeah, hi sir, and thanks for the opportunity. My first question is on the margin decline. Apart from the cross-currency headwind that you mentioned. If you can give more clarity on what was the margin impact from in the enterprise business, especially from the ILD and the NLD front. Most of the impact, as you said, is from one large customer that is mostly ILD. Are we seeing, you know, some pricing pressure in other pockets also apart from that large customer in the enterprise business? And also, you know, as you're saying that we will actually normalize to 20% in the next two quarters.
Is it, you know, also having some seasonality impact because, you know, quarter two, quarter three generally is a strong quarter? Is it because of seasonality or is it, you know, also because, you know, we are not seeing any pricing pressure in other accounts? You know, if you can provide some clarity on that, it would be great. Secondly, on the platform business, you know, we have seen that the platform business gross margins have been, you know, mostly maintained. Can we see similar pricing war or some similar pricing pressure on the platform business as well? You know, there the margins can decline.
Because in terms of competition, they have also acquired a company which is into DLT, and they're also planning to launch something there. If you can, you know, throw some light there.
You know, Amit, maybe let me start answering your first question, right? Your question is whether the impact was very topical specific or much more broad-based. The impact of the customer in discussion is on the NLD and not on the ILD. Just for getting that clarity on, right? It's not. That was more specific, and that is one of the reasons. In ILD, you know, there are always pockets, but you know, that is getting addressed more as business as usual. Uday kind of mentioned about it, that we are actually on a path of increasing prices in ILD in Q2 to drive our profitability. That is definitely another variable which is baked in to our assessment, right?
I would say that from the journey standpoint, there are two, three things. One is there are one-timers that we are trying to offset. You know, some of them will be really immediate, some of them may take a couple of quarters. Two is a lot of our new initiatives, new business will also kick in, which will help drive profitability, right? There are multiple factors in play. It would be difficult to, you know, peel out individual factors, but collectively, we have enough tools and plans in terms of how to get back there. It's not just blind seasonality because the drop here was not fully seasonality, right? To that extent, that's how we are seeing it.
Yeah, in terms of platforms, I think, the DLT is a consortium between Tanla, IBM and Tech Mahindra. IBM and Tech Mahindra has deployed with other telcos, and we deployed with most of the telcos. We don't see any challenge out there. In fact, we see absolutely no challenge there.
Okay. On the Wisely platform, you know, as the previous participant was mentioning, just to provide clarification. The 1 billion-2 billion that I mentioned in the report was specifically for the revenue potential for the Wisely platform. It was not the TAM, right? In terms of the revenue potential, you know, what we are assessing is it can be another INR 100-INR 200 crore. You know, what is going to drive that and is it the deals that we have won?
I know those deals are having the potential to scale it to that level or, you know, we will have to, like, win more or it has to be more broad-based or it will take, you know, like, much more time to scale to those levels. If you can provide, you know, in terms of roadmap, how we are seeing, you know, the Wisely roadmap over the next one year .
Amit, I completely agree with you in the sense like, you know, as we speak, the market is around the INR 45 billion, including government per month. The transactions from SMS per month. The INR 45 billion is the TAM for Wisely. As we speak, we are holding around INR 2 billion. So there is a huge potential to grow. Out of INR 45 billion, including government, we have just onboarded only INR 2 billion. There's a long way to cover. There's huge potential for Wisely platform. Yes, once the enterprises and the telcos see the value in Wisely, it is pretty easy to scale the volume.
Okay. Okay, sir. Thanks and all the best.
Yeah. Thanks, Amit.
Thank you. The next question is from the line of Pranav Kshatriya from Edelweiss. Please go ahead.
Yeah, hi. Thanks for the opportunity. I have three questions. First question is regarding, you know, the gross margin for the enterprises. If you can provide the bridge because it's a fairly sharp jump. You have attributed two to three reasons for the 600 basis points. Which factor contributed how much fall in the gross margin that will be useful? And also, you know, for that particular customer, if you can tell us, you know, even the ballpark range of revenue which was impacted because of that would be useful because the difference in the margin is pretty high, just to understand the scale of it. My second question is regarding the platform business.
How, you know, that seems to be, you know, sort of stagnating considering given Wisely rollout and, you know, inherent quality of the business. You know, there was an expectation that that growth will, you know, be much stronger and much sustained. How should we see this going forward? My last question is, you know, as there was some base effect into the, you know, the pricing increase in the previous quarter. If you can comment on how we are seeing the volume growth in the on a YOY basis in the current season. This is for enterprise business. These are my three questions. Thank you.
You know, to your first question, just in terms of a bridge, right? We talked about Forex being about 1%, right? Which is the impact on the EBITDA side. We have a specific impact on the overall impact is about 4.5 at EBITDA. The balance 3.5 is split between, you know, the platform modernization piece, maybe around 1%, and the balance will be in terms of the customer specific one, right? I don't want to give an individual size of a customer, but they were one of our top five customers, Pranav. You know, you have the metrics.
Yeah.
I can give you a sense of that impact. That was your first question, right? Your second question was in terms of the platform. See, I, as Uday kind of mentioned, right? Platform business operates at a slightly different momentum, right? You roll out a platform, it takes some time to stabilize, you know. Just to give you a sense, Trubloq is probably one of the most profitable platforms in the world today, right? Probably from the time it was launched to the time you started scaling its full potential was about 12-18 months, right? You know, it is not a business which you will see movement in a slope kind of way. It will be more like a step kind of way, right? You've seen us launch multiple aspects of our platform.
You know the building blocks are in, right? We talked about Truecaller scaling up in Q2. We talked about, you know, Vi scaling up in Q2. As this happens, you know, you will suddenly see a bump up till the next platform kind of gets commercialized and scaled. You will have to look at this business with a little more patience because, you know, it's much more profitable, but it takes a little more time because obviously the integrations are deeper. It's more embedded in the customer ecosystem, so they're more complex. So that's really how you should read it. You know, the potential is high.
Sure.
It takes some time. You know, that's why we keep giving you these updates in terms of what we are doing. It's not static. Now, as you know, now what has happened is we've got a momentum build in terms of our rollout. So you have seen something coming from Vi. You'll see something coming from Truecaller. You know, by the time these stabilize, you know, something will come in from Kore.ai, and then you'll keep adding to it. After a point of time, you'll find that there is some product kicking in every quarter, but we've not reached that rhythm yet, Pranav. You will have to be patient on that. You know, all the building blocks are doing very, very well, and I think we will scale well on that.
Sure.
Your first question, right? I want to clarify one point that, you know, it's when we look at our YOY growth, our YOY growth is not driven by ILD, right? It's driven, in fact, rest of the businesses have actually grown faster even in the enterprise business. To kind of attribute pricing as a reason for YOY growth is probably mistaken, right? You know, this business, if you look at last year, we had similar questions where, you know, there is seasonality, where numbers are a little horizontal between Q2, Q3, Q4, and that's the kind of trend that we've seen over the past two years. I think that is how this momentum is in the business, and that's how we are going to kind of track it. We've talked about increasing prices in ILD in Q2.
We want to build and execute on that, on the opportunities we have, and that is what is giving us some amount of confidence in terms of how we are looking at rest of the year.
Sure. Thank you. That's it from my side.
Thank you. The next question is from the line of Deepak Shepani as an individual investor. Please go ahead.
Hello, sir. I've got two questions. What are the key levers to push international business? Is it just the technology by Wisely along with the various partnerships you are entering, or will it be some kind of cost advantage? That's number one. Number two, is any idea when voice DLT could be launched by the regulator?
DLT. Two questions.
Deepak, Uday, here.
When the TCCCPR 2008 came sometime in June, the regulation covers both SMS and voice. This platform is built for both SMS and voice, and as we speak, the operators went live only in SMS. But our platform is ready with even voice capabilities. Whenever the telcos and regulator decided to launch voice services, we are up gain . That is answer number two. What was the first question?
Whether Wisely is a cost play or a different technology, what will make us succeed in the global?
You know, Deepak, let me take a shot and Uday can add on that. Clearly it's a technology play, right? It's a differentiation play. It's a value proposition play, right? It's not a cost play because it's not a low-cost platform, right? Value proposition is around the features of Wisely. It is not around it being cheaper because, you know, the basic telco costs anyway are what they are in different markets. You know, that per se is not a differentiation. I think what we are trying to do with Wisely is a little different. It is about being a single, you know, a platform of platforms for digital interaction, a one stop shop for any customer with trust, with blockchain, with all of those capabilities built in.
That's really how what is resonating with customers. Uday talked about, you know, how Wisely Insights was received and we have multiple people from, you know, from who's who from a global tech major perspective, right? Giants coming and interacting with us on the kind of output that Wisely throws. That's really the differentiation. They are all looking at it, you know, not India specific, but on a global basis. So we will have to execute and build on those conversations, but clearly it's not a cost play, it's a differentiation play.
Okay. Got it. Thank you so much.
Thanks, Deepak.
Thank you. The next question is from the line of Amit Mishra, as an individual investor. Please go ahead.
Hello.
Yes, Amit. Good afternoon.
You're audible. Please go ahead.
Good afternoon. Thank you for giving me an opportunity to ask questions. Firstly, congrats on yet another quarter with healthy year-on-year growth. At the same time, we saw loss in wallet share from big clients and big margin erosion as well. It's quite disturbing when we had the guidance in previous quarter to increase and able to maintain the margins. I don't generally talk about stock price, but you must have seen how stock was beaten today. This comes from the background of, like, big correction in last one and a half month. It's a high concern for us. If there are any other factors at play, because the result was not so bad despite the margin erosion. I want to hear your thoughts on that.
Second question I want to check with you about the global GTM and what's the timeframe we are having. Because we discussed this thing in last October when we hired like one of the biggest consulting firm you know for the GTM strategy. Now it's eight months, and Vi has been in operations for last three months, and we must be interfacing with them for the last six months. It's just like, hey, what's your timeframe there, because things keep on shifting. How would you like to scale your thoughts?
Sorry, Mr. Mishra, your voice is breaking now.
You want me to repeat the second question or from the start?
No, just the second question. Yeah.
Just the second question, Amit. We heard your first question. Just the second question.
Second question. Last leg. Yeah.
On the second question about. I talked about the time we have taken with this consulting firm. It's since October, November last year, so it's like eight-nine months. With Vi, we have been doing this interfacing for the last five-six months, and we have been operational for last three months. We were talking about case studies. Now we should have it. We want to hear something tangible, so that we can see and we can anticipate things. What we are doing in this regard. If you can answer these two, and then I can ask more if there's still time.
Amit, Uday here. Okay.
Yeah.
All I can say is I don't invest in any stock, so I cannot really comment on the stock movement.
The biggest investor in Tanla.
Yeah. Absolutely. I'm talking about other than Tanla. I don't invest, right?
Yeah. Yeah. That's right.
My point is very simple, right? What you need to appreciate, all of the investors, like what you really need to appreciate is, we have back to back, we have closed three largest partnerships in the last nine months. The first one is VIL. We have a huge competition. We hands down, we won that contract purely on the merit basis, not on any other basis. It's a long-term deal. Once you kickstart the revenues and the margins, it's a very long term deal. In fact, let me go back. Let me step back now.
I know when we deployed our platforms with some of the telcos in India, probably more than one decade, once we deploy the platform, that will go for a long, long time. Okay. We don't deploy the platform for six months or one or two years, right. Winning the VIL is not easy. Hands down, we won the deal. We are being deploying. We are facing a bit of challenges because there are too many integration points with the VIL, because Vodafone and Idea came together. There are a lot of network components are there, a lot of moving parts are there. It is gone live. It is not fully gone live, but once it's fully go live, it's a long-term deal. That's number one, right?
Number two, in Truecaller, you know they're a pretty large company from Stockholm. They have more than 300 million users. A pretty large company, right? They're available only on Wisely. Okay? It is not that like, you know, each and every player in India or global have access to Truecaller. It is exclusively available on Wisely, right? That's number two. Number three, we have closed our Kore.ai partnerships, again, exclusive for six markets. One can go and read Gartner's quadrant report. They are in the top end quadrant. They're the market leaders, as informed to the market. They have deployed a couple of largest deployments on the planet.
If I'm allowed to say, in fact, it is available out there in the public domain. They deployed with the biggest banks in the world, including the Citibank. It is again available only with us, only on Wisely. It demonstrates the power of Wisely, okay? One cannot doubt even for one second. That's the first point, right? The second point is coming back to the consulting firm. Yes, they have been working with us. With their help, we have closed three larger deals. It takes a bit of time. It's not that like we close the deal and generate the revenue from next day. That's not possible. We are extremely happy with the arrangement that we have with this consulting firm. It is working well for us. We're extremely happy about it.
In fact, we are fully fired up. Yes, we are, I think, being penalized today. I don't want to really comment on that. We are fully geared up. Our strategy is working. We are fully fired up and we are going to come back, get back to 20% EBITDA margins as soon as possible. We are fully geared up for that.
Sir, just one question on Vi. How much of migration has happened for Idea traffic?
It's not a question of traffic, like, you know, it is fully divested in terms of traffic. But unless and until we fully integrate, the 100% traffic doesn't come to us. It may go to other telcos from there. It may go somewhere. There's a lot of leakage in the market. One of the biggest advantages with our firewall is 100% of legitimate traffic has to come to VIL consumers. That's the reason VIL has chose to deploy Wisely deployment with them. I cannot really say, talk in terms of percentages, but we are more or less there.
In the next probably two weeks, we should be able to complete our integration with VIL network.
Sir, on the GTM, for global markets, I didn't get the answer. What time frame we are looking at?
Amit, like, you know, see when the strategy works for India that strategy works for a global market, right? Nowadays, like, you know, once the Wisely is available on the cloud, okay, for me to launch the services outside India, it's a matter of two days, okay? I don't need to go and deploy the platform in those countries. I just need to set up the cloud in the global market and everything is switched on the next two days, right? In terms of platform deployment, it's pretty easy because Wisely is completely developed on the cloud. That's number one.
Number two, in terms of GTM, when it is working with the Indian markets, it is pretty easy to replicate in the global market. We're not in a great hurry to expand just for the sake of it. We're not that kind of company. We want to be very cautious about our expansion plans. In India itself is a big market for healthcare. As I told you earlier, 40-45 billion messages per month, and we are handling only less than 2 billion messages. There is long ground to cover in India itself, right? Expanding to global market is not an issue.
It's a question of time before we see the success and that will help us to expand.
Thank you. Our next question is from the line of Deepak Poddar from Sapphire Capital. Please go ahead.
Hello.
Hey. Hey, good evening.
Yes, Deepak, please go ahead.
Thank you very much, sir, for the opportunity. Sir, I just wanted to understand, I mean, the last quarter we have been committed to the Rule of 60, right? Now with the current market condition changes and the margin pressure also that we are seeing. What sort of rule we are committed to as we speak now?
Deepak, that's a good question. In fact, I was pretty vocal on the CNBC also when I was there last time. This is the Rule of 40, that's where most of the SaaS companies, successful SaaS companies do operate at Rule of 40. We have been operating at almost 59%-60% last year. Our intent is to operate at 60%. We had a bit of a headwinds in Q1. We're not going to shy away. Our target is to go back to our targets. I cannot really comment right now, but we are very cautious about the Rule of 40 and Rule of 60.
Okay. Our target is to go back to Rule of 60, right? That's what you're saying.
Absolutely. All I said was like the biggest. If you look at. Deepak , if you look at the biggest tech companies in the world, okay, they operate at Rule of 40. Okay, right? But we have been operating at better levels. We crossed 40s, then we crossed 50s, then we always got close to Rule of 60. Definitely since we are going to be the platform company, definitely we are very cautious about Rule of 40, and we will definitely would like to stick to that. Like, our intent is to stick to Rule of 40, though we are operating at Rule of 60.
I'm not giving you any guidance whether it is Rule of 40 or Rule of 60, but we are very cautious about Rule of 40 and Rule of 60.
Okay. I understood. Yeah, I think that's it from my side. All the very best.
Thank you.
Thank you so much.
Thank you. Ladies and gentlemen, due to paucity of time, that would be our last question for today. I now hand the conference over to Ms. Ritu Mehta for closing comments. Thank you, and over to you.
Thank you, everyone. That was the last question for today. In case we couldn't take your questions due to time constraints, please feel free to reach out to investor relations team. Have a good evening.
Okay. Thank you. Bye.