Ladies and gentlemen, good day and welcome to the Tanla Platforms Q1 FY26 earnings call. As a reminder, all participant lines will be in the 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 touch-tone phone. I now hand the conference over to Ms. Ritu Mehta from Tanla Platforms. Thank you and over to you, ma'am.
Good afternoon and welcome to our Q1 FY26 earnings call. Joining us today are Uday Reddy, Founder Chairman and CEO, Deepak Goyal, Executive Director, Abhishek Jain, CFO, and Anubha Batra, CFO Designate. Uday will share his perspectives on business imperatives and strategic progress made. After his opening remarks, we'll be happy to engage with participants and address their questions. Before we start the call, let me draw your attention to the fact that today's discussion will feature statements that are forward-looking in nature. All statements, other than statements of historical facts, could be deemed forward-looking in nature. Such statements are inherently subject to risk and uncertainty, some of which cannot be quantified or predicted. A detailed disclosure in this regard is mentioned in the results presentation that is uploaded on the website. Audio recording and transcripts will be available. I now hand over to Uday for his opening remarks.
Thank you, Ritu. Good evening, everyone. A very warm welcome to this call. We appreciate you reviewing our investor presentation and shareholders' letter. We also hope you saw our recent announcement about our AI- native platform. This platform will be launched with the leading Southeast Asian telco in the coming weeks. We are excited about this AI- native platform, which uses scalable AI infrastructure and an agentic layer. We are developing multiple applications for both telcos and enterprises. Telcos have a vast, valuable, but fragmented data, which our platform addresses directly. Our platform is deeply embedded within the telco ecosystem, opening new use cases for both telcos and enterprises. Early results are promising, and we are confident this deployment is just the start.
We're also seeing a strong momentum in our enterprise business, focusing on increasing wallet share, securing new clients, and becoming the preferred partner in India's OTT space, supporting our goal of 20% EBITDA CAGR growth over the next two years. For Q1 FY26, we delivered our second consecutive quarter of revenue growth, with the revenue up 1.6% quarter- on- quarter, 3.8% year- on- year, to INR 1,041 crore on the path of INR 118 crore. We also announced a INR 175-crore buyback, bringing our total shareholder return to nearly INR 1,000 crore over the past five years through dividends and buybacks, all while maintaining a zero-debt balance sheet. I would like to welcome Anubha as our new CFO and also would like to thank Abhishek Jain for his contribution. We wish him all the best. Now, let us move to Q&A. The management and I are ready for your questions.
Ritu?
We can open up for the questions.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use their hands while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Sambhav Jain from Vardhman Investments
Good evening, respected members. I'm I now audible?
Yes, sir. Please go ahead with your question.
Yes. Sir, congratulations on your recent performance and results. Considering it was quite a challenging environment for most of the companies during this phase, we've managed to get decent numbers while maintaining business as usual. Sir, I just have a simple question on ValueFirst as to when will we be able to see ValueFirst numbers reflecting? Is there some delay regarding approvals or regulatory matters as to why we are not able to get the numbers of ValueFirst? It's been a while since we've been trying that. Just wanted to get some insight as to when we could expect ValueFirst numbers also coming in. My second question would be, since SBI started in the beginning of the quarter, SBI business, do the current numbers reflect SBI's business fully baked in, or it's just a bit of SBI's business on our top line? That's it from me. Thanks.
Thanks, Sambhav. This is Abhishek here. On your second question, right, SBI deal, as I said, it's a continuity of our services. We got the renewal of the RPN end this term. This is effective 1st April. The volumes that we see are for the full quarter, both in terms of the gross profit and the revenue top line. We should not see any incremental delta because of those. Of course, some volumes here and there would have a quarter variation, but it's in fact from the first day of the quarter. On your first question, we have completed the acquisition of ValueFirst India and ValueFirst Singapore. The other global companies of VF, while we intend to acquire, are impending RBI approval. We are working with them and clarifying all the questions that they have. We had earlier called out a date.
We don't want to call out the date because really the ball is not with us. As soon as we get any update or clarifications as to when we are going to go ahead, we will keep you guys posted. We are clarifying with all the questions that we are getting. We are hopeful that it should happen in some time, but right now it's difficult to give us the date on when the global acquisition.
Thank you. Thank you, sir.
Thank you.
Thank you. Our next question comes from the line of Balaji from IIFL. Please go ahead.
Thanks for taking my questions. In your opening remarks, you talked about 20% revenue CAGR over two years. What is the visibility on this? I can see that you have signed three new deals. One is the AI- native platform deal and there are two other MaaP deals as well. Just to get some color, how much will these two deal wins help towards achieving your 20% revenue figure? Once this question is answered, I'll come back with my follow-up.
Thanks, Balaji. Just to clarify to you and to all, what we said was we aspire to grow at 20% CAGR from EBITDA perspective. Of course, there has to be a top line growth which would converge back to EBITDA impact. What we are telling our aspiration is more from an EBITDA CAGR growth for two years. Yeah. Just to clarify on where we see things little promising at this stage is that if you see from last two quarters, it's a good last two consecutive quarters of growth. We see some momentum back. If I have to call out from an enterprise business, we continue to win new logos. We continue to mind the accounts that we are in and continue to win market share in our existing business and overall wallet share.
If you have to call out from an India domestic enterprise business perspective, we have also done a release in the last couple of weeks, in one or two quarters, and the last couple of months on two large deal wins. One was AI- native platform, which we have talked a bit detailed yesterday and deemed for yesterday. I think that's a good deal that we live on, and we believe that we'll go live in by first week or sometime mid-August. That will start generating revenue and profit from quarter two onwards. Similarly, our MaaP platform, which we have deployed with the two large telcos outside India, should go live in soon in coming weeks. That should also start giving us a revenue share from a market perspective. Third, in general, our global business, even from an enterprise perspective, is doing well.
These are the opportunities that we see ourselves, which gives us the confidence that that will help us to inspire the numbers that we have laid out at the beginning of the quarter.
Yeah.
Just to clarify to all that, you know it's not a guidance, right? It's an aspiration that all of the management team has come together. To be honest, we are putting pressure on ourselves because we are taking the stretch target to achieve those. It's kind of a little bit of a forward-looking statement, but this is the aspiration that management is driving towards achieving that goal in the next two years in terms of CAGR.
Yes, absolutely. Absolutely. Yeah.
Thanks, Balaji.
Thanks. Yeah?
Balaji,
[Crosstalk].
Actually, I have two more if I have the time. One is on this India revenue contribution. It was, you know, the volumes were falling because of the price hikes that they were taken, and there was migration that was happening to OTT channels. Is it fair to say that the entire ILD- led drag is now behind? What would be the proportion of ILD as a percentage of your enterprise revenue or consolidated revenue?
If you ask me, I think India revenue has been pretty consistent for the last one or two quarters now. It is a higher single- digit from a revenue contribution perspective and lower single- digit from a gross margin contribution perspective. It's not a significant number for us now. I don't see any major impact from an ILD perspective in the next two quarters.
Got it. The last question is on the platform revenue. I can see that from 3Q levels, the platform revenues are down in 4Q as well as 1Q. While I do understand that there is a bit of seasonality, is it fair to say that this is down despite the SBI deal now contributing from April? If that is the case, is there any legacy deal that is coming off? How should one look at these numbers?
The SBI deal is largely on the enterprise side. Of course, we do have a revenue share and a few things. That could be a blip in the last one or two quarters from a platform business perspective, I would say. I don't think we have lost any large or any of the deals from the platform side. Rather, we believe we are very strongly placed at this stage. Based on the last two announcements and the commentaries that I just made in terms of RCS platform going live from a global perspective, as well as our AI- native platform launch from the current quarter, I think platform business looks really promising. I would say it was a blip and a small minor drop in the last two quarters. No major customer exits or no major business that has fallen.
Got it. Thanks and all the best.
Thank you.
Thank you. Our next question comes from the line of Amit Chandra from HDFC Securities. Please go ahead.
Yeah, thanks for the opportunity. My first question is on the enterprise growth. Most of the growth of the enterprise is being now driven by the OTT revenue. If I ask the OTT revenue, there is still the enterprise ex of OTT has been declining both sequentially and YoY over the last three quarters now. This decline is despite the new deals that we have signed in this quarter and those ramping up. It's not reflecting in terms of the enterprise revenue. How to read this and do we expect an increase in the enterprise revenue, which is ex of the OTT from here on? Also, on the pricing front, both on the WhatsApp pricing and the telco pricing, domestic telco pricing, what is the view and what are the changes in the pricing that have happened in the recent past?
In terms of the margins, what we have been seeing is that the margin has been dragging downwards. Obviously, there has been investment that has been going on to the international expansion. Still, most of the new deals that we're getting, are these the deals that are very low margin?
Sure. Thanks, Amit. I think it's a lot of questions. I'll take a short thought and then I'll request Deepak to add to what I missed. From an, I think it would be unfair in this era to see our enterprise business ex of OTT, right? We are all pivoting. We are talking about AI. We are talking about smart communications and so forth. Hence, keeping OTT channel out would be a little unfair in some sense, right? Having said that, what we see from an enterprise SMS, purely SMS perspective, is that A, the volume continues to grow, B, we continue to win new RFPs and wallet share, as I said, and three, it's not reflecting on the revenue stream because of the price sensitivity, right? We have seen a lot of price aggressiveness with our completion.
Some of those have settled, but there are still players, one or two, which are a little bit competitive, which has eroded our realization versus the volume growth. There is a volume growth, but because of the price realization being lower, we see that not reflected in our SMS business as we speak. However, we feel very confident with the mix of OTT and the domestic SMS and international business, with the mix of business that we have in the plan. We have earlier called out that we will be happy in operating an operating margin of a gross margin of 25%– 26%. With the new ambition that we have set for ourselves, I think it has to slowly improve from here on to meet our targets as well, right?
The new deals, I would say it is competitive, but it's not coming at a very unreasonable pricing, at least the last couple of wins. Of course, it's a price-sensitive market from a domestic SMS perspective, which continues to be there. From a WhatsApp perspective, I think the WhatsApp continues to do fairly well. Both WhatsApp, RCS, and Truecaller, all three as a channel from an OTT perspective, is contributing for the growth. I think it will continue to be a good stream of growth even going forward. Deepak, you think you want to add anything on the pricing?
Yeah, Abhishek, actually, you have answered everything, but just to add to whatever you said. Amit, it's like this: when we go to the customer, we offer omnichannel experience. When I say omnichannel, it is SMS, it is all the OTT channels that are RCS, WhatsApp, even Truecaller, right? Email, voice, everything is, as a bouquet of services, offered to the customer. Based on the use cases, we, along with the customer, decide which channel to choose. Now, because we have multiple channels available, definitely some traffic has moved from SMS to OTT channels because of a better user experience. For example, I'll just give you an example. Earlier, when you send a message, SMS, this is your payment reminder, right? Now, if you send the same message via WhatsApp or RCS, you can attach the PDF bill also. You can, in fact, give them a payment button also.
The entire transaction can be done immediately, right? It is far more easy for the customer to do that transaction. It's good for enterprise also. That way, wherever we see there's a better use case, we move that particular use case to the OTT, right? This is how it has been done. As I said, when we go to the customer, we say, "Hey, we are here to increase, enhance your user experience," right? That is the buzzword today. We are continuously working on that today.
Okay. Anu, just to follow- up on that, Deepak. Do we see the volume shifting from the traditional SMS channel to the OTT because after the pricing reset or the pricing changes in WhatsApp, it has become even cheaper or even competitive to the traditional SMS now? Earlier, most of the enterprises, larger ones, were using all the channels, SMS, WhatsApp, at the same time for communication with the clients. Do you see a case where they choose only WhatsApp and don't choose SMS, and we see a cannibalization of our SMS revenues to WhatsApp?
If you really see, effectively, WhatsApp utility price, we call it utility, which is the piece of transactions, right? It has not come down, okay? Earlier, WhatsApp was offering a 24-hour window where an enterprise could send unlimited messages. Let's say, for example, earlier the price was maybe INR 12 or INR 13 for a WhatsApp message, but with a 24-hour window. Most of our enterprises send more than two messages to one particular number in a 24-hour window. Now the price, they have reduced the price maybe by 20%, but now it is just like SMS. They charge per transaction, right? Effectively, price has not come down. In fact, it has gone up, if you really see. This is how it is. As I said, as far as price is concerned, that is not an issue at all.
There are definitely use cases where, for a better user experience, customers would move to WhatsApp, and they are moving. At the same time, the overall number of transactions are going up. SMS volumes are also growing. Just like that.
Okay. Lastly, on the margin front, obviously, you have an escalation of 20% EBITDA CAGR. Is it mostly top- line driven, or do we also see a margin expansion happening from here on because margins right now are at like multi-quarter low?
I take that, Amit. If you see from the last couple of quarters, I've been highlighting that we have been investing in go-to-market, in building up new platforms, in upgrading our technologies, and so forth. If you see each line item of our expenditure has gone up despite revenue being flattish, I think that was a conscious call by the management team. Both today, Deepak, and other leaders have taken this conscious call on making those investments. Having said that, it would be a combination of both. The top line has to grow, but at the same time, the efficiency has to kick in, right? In terms of, for example, all the investments that we made, whether it be from a go-to-market perspective on AI, you give me an example, the revenue streams should start immediately as we speak, right, from next week as we go live.
Similarly, the RCS platform that we have deployed outside India has gone through a lot of GTM investments. That should also start deploying it. These are just a couple of examples that I'm giving. I would say it would be a combination of both, the top line growth, as well as efficiency-driven gross margin improvement and indirect costing.
Is it fair to assume that we move back to the previous range of 18– 19%, or will it be more like a gradual kind of a move in terms of margins.
Amit, if I have to achieve EBITDA of 20% CAGR, you are smart enough to do that math even better than me. I can only say that we have aspired and taken a bold decision, and it's already creating a lot of tremendous pressure internally. We'll stick by that right now and put our all mighty to achieve that.
Okay. Thank you for the opportunity and all the best.
Thank you.
Thank you.
Our next question comes from the line of Ram Tavva with Equinox Capital. Please go ahead.
Yeah, hi. Can you all hear me?
Yes, sir.
Good afternoon. This is pertaining to the AI- native platform, which you have disclosed during the AGM in the recent past, right? I just want to understand what is the industry benchmark for ARPU, not necessarily for Tanla, but broadly across the market, what is the kind of ARPU we can expect from this AI kind of tool, AI- native tool.
Hi. Hello. Hi. Uday here.
Okay. Yeah, Uday.
The way we have closed the deal with the telco is we get a share per user per month. It is more of a subscription model. We have closed a deal for three and a half years, starting from this quarter onwards.
Ladies and gentlemen, may I request you to stay connected while we reconnect the management line? Thank you. Yes, sir. Please go ahead.
Yeah, Uday. Can you hear me? Ram here.
Sir, one moment, please. We have the management line reconnected now. Mr. Ram, can you repeat your question, please?
Hi. This is Ritu Mehta.
Uday, can you hear me?
Battery cut.
Yes, sir. One moment, please.
Nothing.
Mr. Ram, do you have the management line reconnected? Yes, Uday, sir?
Battery cut.
Yes.
Uday, can you hear me?
I'm back here.
Yes, yes. I can hear you, Ram. I can hear you.
Uday, do you want me to repeat the question, or?
No, no. I understood your question. All I'm trying to say is we are deploying, I mean, basically, let me explain about the bit about the platform and the solution that we are trying to build on top of this AI- native platform. This platform is basically an AI- native platform, which is being deployed as part of the core network. What I mean by that is, like, you know, we will have access to the entire data of this telco, of the users and enterprises, and so on and so forth. Once we gather this data into the AI- native platform, which is sitting as part of the core AI layer/ data layer, we are going to build, we are building the solutions on top of the AI platform.
The first solution is going to go live, wherein we sign this solution for the next three and a half years, wherein we get paid per user per month. It is more of a subscription model. Secondly, as and when we launch some more applications, which we are planning to launch some more applications in the next one year's time, we get paid separately for that solution again. It has nothing to do with the ARPU. It is more to do with the subscription fees that are being paid every month for the next three and a half years. Sorry. Ram, am I clear?
Yeah, you are clear. This AI- native platform, when compared to other existing competitors in this space, how different it is and what are the key entry barriers or moats that we can expect of it? I remember you were saying during the AGM that there is no competition for this product, subject to correction. I don't firmly remember like you made that statement, but I want to understand the moat and what kind of competition we have in this space.
Ram, the way I look at this, I think I would like to do one more call, probably, or we will come out with one more announcement once the platform goes live. I don't want to hijack this from our esteemed customer. I want them to speak. This is going to be a major announcement. Okay? You get to see the announcement coming from the customer directly. They probably should be able to explain well. Probably around the second week or around the 10th of August, we should also give you some updates on this platform. I would like to leave it here now. We are very, very excited about this platform.
Okay. Pertaining to this MaaP platform, you are saying that you have implemented this MaaP for Google RCS, Google RCS in India. Is it confined only to India, or is it across the globe?
No. The platform that we won is with the Indosat telcos. There are three telcos in Indonesia: Indosat, Telkomsel, and Axiata. We closed the deal with two telcos, which is Telkomsel and Indosat. Telkomsel represents around 52%, and Indosat represents around 25%. The remaining is with Axiata. We have not closed, rather, Google has not closed the deal with Axiata so far. I hope they will close a deal with Axiata very soon. Once Google closes the deal, we also would like to go and deploy our platform. Once we close the deal with Axiata, we should be able to go live. We are just eagerly waiting for Google to close with Axiata, which is the third operator.
Okay. I'm referring the other one, actually. The MaaP platform, you're saying that from 10 million users, it got increased to a few billions during the AGM. You were saying that is where RCS. Is it in India?
Yeah, Ram, it is basically from India. Yes.
India. Any plans to replicate it across the globe for Google with other countries, or is it just confined to India itself?
This is what I just told you. Like, you know, the one I referred to about the traffic is from India. Meanwhile, we went ahead and deployed the same platform with the Indonesian two operators. We had to close up with a third operator. Once we close the third operator, we will have 100% revenue market share with Indonesia. The one I'm referring to is the two things. One, the 10 billion or 8 billion traffic that I'm talking about per month is from India. Another one, the platform, the deployment we are referring to, Indonesia. That is going to go live sometime in the quarter. That platform.
There's potential to replicate to other countries also in the future?
Obviously, yes, because Indonesia is a separate deployment, and we can do the same thing with other operators and other countries. Yes.
Wonderful. Thank you. Thank you so much. That's all from my side.
Thank you.
Thank you. The next question comes from the line of Deepak Chokhani with Rate Capital. Please go ahead.
Hi, Uday. Thank you for this opportunity. I have two questions. First is, how confident are we of achieving the 20% EBITDA growth numbers? Will it largely be back-ended towards the end of the year or broadly equally spread over the next three quarters? That's my first question.
Deepak, go ahead with the other questions.
Yeah, the next question is, what other geographies are we planning to, other than India, Middle East, and Southeast Asia? Are we planning to enter any other geographies for now? That's it from my side. Thanks.
In terms of other geographies, Deepak, I think we would like to quickly consolidate in Indonesia. That's where we're going live with our MaaP platform, and we're also planning to set up an office there in this quarter. We are investing in Indonesia in a big way. We have recruited people, and we are planning to open the office there. We are betting big on Indonesia to start with. We would like to see, at least, how it goes with Indonesia in the next two quarters, quarter two and quarter three, before you look at another geography. That's number one. Number two, the 20% CAGR growth. Yes, we have a solid plan from this quarter, Q2, onwards. You will see the growth. You will see the numbers kicking off from Q2 onwards. I think we should be able to throw some more light during the Q2 call, Deepak.
I would like to leave it there.
Perfect, sir. Thank you.
Thank you. Our next question comes from the line of Aravind Viswanathan with PK Corporation. Please go ahead.
Congratulations to Tanla Limited on the new deployment and new beginnings. I would just like to know about a buyback. A basic thing, how do we consider that? Are we going to go open for market buybacks or tendering? Why did we consider tender and not the market buyback?
Thanks, Balaji. Open market offers no more there as part of the regulations. Hence, we have gone ahead with the tender route. The window would be open between 29th– 4th of August. Post that, within one week or around that timeframe, the cash disbursement will happen. We should send out the email soon in terms of the entitlement and so forth, providing all the details in this email. That's the details from my perspective.
Is it tax-friendly after the new guidelines came for the income tax?
It will depend on the purchase price and the effective tax rate for the respective individual. It definitely doesn't make sense.
It doesn't. It doesn't.
No, no.
That's what I'm telling, have you gone through the new guidelines before putting in buyback? In this, your buying price is not considered. It is only the money which you get in your account. The full money is considered as your income, and you have to pay income tax on the full amount. That's the reason buybacks have stopped. We are talking that our buying price is considered. Have we gone through this?
Yes, we have gone through it. Based on the portfolio of shareholders and mix of shareholders that we have, and the premium that we have given based on the spot price at the date of the announcement, there was a very clear delta and the premium that we offered. Any buyback, whether the pre-regime or now, may not be, it depends on what the investor is looking for, right? They are with the company for the EPS growth and so forth. Basically.
Question failed.
Hello?
Yes, sir. Please go ahead.
Okay. Based on the current mix of shareholders and their average buying price and others, I think based on our evaluation, it does make sense to a good portion of our shareholders base.
I will request if you can share your calculations and all because I think that is a big mistake. Last time also, before a few years, I had told that we had calculated that our money was in liquid fund, but it was not in liquid fund. It was in debt funds, which we had lost it. This time, it seems that there is some mistake. Please, please check it out and do give me the calculations of what we had done. I'll be very happy to get it.
No issues, Balin. I'm happy to clarify that. I don't believe there is any mistake. We have evaluated through our merchant backers as well.
Kotak is our merchant backer, right? We have done a lot of meetings with them, so we have done it.
We are happy to get into a call with you and clarify. Thanks.
Great, great. Thanks. We're waiting for a call. Thank you.
Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to Ms. Ritu Mehta for closing comments.
Thank you, everyone. In case you have any other questions, you can reach out to Investor Relations. Thank you.
Thank you. On behalf of Tanla Platforms Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.