Ladies and gentlemen, good day and welcome to Tanla Platforms Limited Q2 FY 2026 earnings conference 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. Please note that this conference is being recorded. I now hand the conference over to Ms. Ritu Mehta. Thank you, and over to you, ma'am.
A very good morning and a warm welcome to our Q2 earnings call. Joining with us today are Uday Reddy, Founder, Chairman, and CEO, Deepak Goyal, Executive Director, and Anubhav Batra, CFO. Before we start the call, 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 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 our website. Audio recording and transcript will be available soon. Hope everybody got a chance to go through our investor presentation and shareholder letter. The management will be happy to answer any questions, and we will now open the floor for Q&A.
Thank you very much, ma'am. We will now begin with the question-and-answer session. Anyone who wishes to ask questions may please press star and one on the touch-tone phone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only the handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Amit Chandra from HDFC Securities. Please go ahead.
Tanla, thanks for the opportunity. I'm happy to be available to all. So the first question is on the uptick that we are seeing on the platform revenue. Obviously, Wisely.ai implementation has helped us to achieve this. So if you can elaborate a bit more, obviously you're given a very detailed presentation on that. But still, in terms of what is the contribution from Wisely.ai in this quarter, whether it's a full quarter kind of contribution, and also in terms of what are the other additional incremental revenue or how we can extend this partnership, you can give a more one-year kind of a view where how we can penetrate deeper into the client.
Hi, Amit. This is Anubhav. So basically, in this quarter, we see the benefit which has come from the platform deal that we had mentioned earlier in our calls where we have gone live with Indosat. So the quarter captures the benefit that has come from the deal. The contract, like Uday had mentioned in the past, is actually a SaaS-based model which is dependent on the number of subscribers and the value-add that we do for protecting the users from scam. So it is dependent on the commercials are dependent on the number of subscribers protected, and the benefit should continue in the coming quarters as well.
Okay. So in terms of cross-selling it within the existing client, that is one possibility. Plus, also in terms of expansion of this product across similar-sized telcos in terms of international expansion, you can also throw some light there. And what could be the sustained growth we can see in the platform and also the update in the other areas where we have invested in the platform business?
Yes. So Amit, the plan is to replicate the success that we have seen with Indosat to other telcos as well as with other enterprises. The results that we have seen from the deployment and the launch is very, very encouraging. The customer is benefiting out of the solution that we have deployed. And there are other solutions that are being discussed which are in the ancillary of the problem that we are solving for them. There would be more solutions coming in in the related areas with the same customers, which will obviously help in upselling more solutions to them. As well as we are trying to replicate the solution with other telcos globally. This is an awesome start for our global expansion. We have been making efforts, and now they have started translating into results for us. So definitely, it should multiply from here.
And also on the other, not just on the Wisely.ai front, but as well as on the other platforms like MaaP Platform, we should see success coming in from, or the success should grow on MaaP Platform as well in the coming quarters.
Okay. And so on the enterprise side, obviously, OTT is are going strong YoY, but on a sequential basis, there has been some softness. So what's causing that? Maybe I'm not seeing it on a quarterly basis, but what could be the volume growth that we can assume for the OTT channel? And also in terms of the enterprise mix of OTT, how is the domestic volumes and the international volumes panning out? And how one should see the inherent technological risk here in terms of shifting to alternate channels and whether we are seeing some cannibalization in terms of the domestic volume shifting to OTT? That's why we are not seeing aggregate growth numbers.
No, in fact, Amit, this quarter, honestly, while the OTT sequentially has been a little soft, but I would say it is not the softness in the long term. It is basically because of certain high volumes done in quarter one for seasonal promotional spend. That is what has led to softness in this quarter sequentially, but otherwise, OTT is going strong. Not just WhatsApp, but RCS is also growing month -on month, and it should continue, so definitely, OTT continues to be our focus area where the growth should come from, and not just OTT. In fact, this quarter, we have seen even the SMS volumes have always grown but kind of got cannibalized with the price erosion, but this quarter, the price has kind of behaved in a stable manner. The erosion is not that much.
So there is an uptick in the gross margin in the enterprise communication space. Also, you would see the margins have improved. And in fact, on the OTT side, while the contribution from one or two major customers were lower because of promotional spend, it has improved our margin mix because the customer mix has changed in OTT, which has led to better margins. So we hope that the growth momentum and the price stability continues in enterprise communication, and it should definitely lead to growth going forward.
Okay. Just to add. Hi, Deepak here. Just to add what Anubhav has said, as you mentioned that in Q1, we had IPL, and that has ended. There are a lot of promotions happening on OTT, especially on WhatsApp, which was not there in Q2. And on the other side, there is an effort by the OTT players, especially as well as Google, to lower the marketing messages, which are very expensive, if you see that, and move more towards utility and transactions. So while the volumes are increasing, but there's a shift also happening, and which will continue. But overall, as you've seen, we have increased our overall market share in OTT. We have been awarded as Partner of the Year by Meta. We are the largest partner for RCS with Google, and that should continue. Okay.
And my last question on the margin side, obviously, we have seen good expansion on the gross margin, and we are at five quarters high there. So how do you see the gross margin panning out from here? And what's exactly causing the increase in the gross margins in the enterprise business despite there is pricing pressure from telcos?
[crosstalk] Anubhav, please.
Yes. So Amit, as I mentioned, it is actually the customer mix that changed our mix, which is causing, or translating into better gross margin in the enterprise communication space. It should continue. The erosion from the price decline has also kind of stabilized. So we hope that the trend continues and enterprise communication continues to contribute to the gross margins. And obviously, the major levers for gross margin uplift is the platform business, which operates at a much higher gross margin level. So the higher proportion of platform sales should translate into better gross margins, like we have seen already in this quarter. It should continue. The growth has to come. Accelerated growth has to come from the platforms' business, and that should definitely positively impact the gross margin going forward as well.
Okay, sir. Thank you and all the best.
Thank you.
Thank you. The next question is from the line of Deepak Chokhani from Rade Capital. Please go ahead.
Thank you. Happy Diwali to you all. I have three quick questions. I'll go one by one, and you can probably answer one by one. So Uday, in last quarter, you had guided for a 20% aspirational EBITDA growth. You think we are on track on this aspiration for this year, given that we may need additional INR 500 crore EBITDA in the next two quarters to achieve this aspiration?
Yes. Yes. Can you hear me?
Yes. Yes.
Yes, sir.
Yeah. Morning. Morning, Deepak. Yes. Yes. So in fact, we had a long debate in the board yesterday, and we have committed around INR 800 crores EBITDA this year. Okay? And so we see a bit of risk with around the INR 50 crores. The reason being, in fact, as Deepak explained so well yesterday, there are two reasons why we see a bit of risk with INR 50 crores EBITDA this year. Effectively, we may reach INR 750 crores very effectively, and we may miss, I'm not sure, but maximum we may miss INR 50 crores. The reason being two reasons. One is the gaming industry, the whole story. We are one of the biggest guys who have been impacted. For example, Dream11 is one of our largest customers, and the rest is history, right? So that's number one.
Number two is we see a bit of a slowdown in terms of WhatsApp incentives. Okay? So these two things are two items that are pulling down our aspiration number, but we are trying the best to recover in the next two quarters. Let's see how it goes.
Perfect, sir. Thank you. My next question is, Indosat revenue, sir, was for the entire quarter two or part of quarter two?
Yeah. So as Anubhav explained, we have captured for three months for the entire quarter. So let me explain. Anubhav explained very well, right? But let me also try to deep dive. So basically, this is a long-term deal, and it's a subscription model. That's number one. And we went ahead with the first two solutions, which are anti-spam and anti-scam. So for which we signed for a long-term deal. And this platform is centrally deployed with Indosat, wherein we are allowed to launch as many solutions as we can, of course. Of course, we are working very closely with the telco. And then, we launch one more solution. So you can see the uptick in our revenue stats. Number one. Number two, we're all long-term deals.
And number two is whenever we deploy this platform with other telcos, you can see the same upstick in terms of revenue. So one is we will land in telco, and we will try to grow. So we are landed in Indosat, which is doing phenomenally well, and we'll try to close even other telcos.
Perfect, sir. Thank you so much and all the best.
Thank you. Before we take the next question, a reminder to all the participants that you may please press star one to ask questions. The next question is from the line of Ram Tava from Capita Investments. Please go ahead.
Good afternoon, all. So my question is, does Wisely.ai remain prospective clients in your offering for the next quarter or next couple of quarters, which are almost on the verge of translating into signed deals? So anything prospective in Indonesia or even outside Indonesia, within India, anywhere other than the Indosat?
Hi, Ram. Anubhav is aside. We have a very strong pipeline on Wisely.ai, which is not just post the Indosat deployment, but also from the efforts that have gone to it in the past in India as well as globally. So there is definitely a very strong pipeline where a couple of leads are hot. We are very, very optimistic in platform revenue growing and contributing to the EBITDA aspirations. So definitely, we can see some conversions in the near term and obviously in the long term.
Okay. So I just want to understand why the net profit has grown negative YoY. The top line has increased. In other aspects, gross profit has increased. Any specific reason that the net profit has come down?
So on quarter-on-quarter, it is positive. Year on year, the negative is because of the less efficiency in terms of overhead, and that is primarily because of the measured investment that we have been doing in talent and technology. And it should kind of continue because we have to motivate people. We have to hire the right talent to fuel growth. And I think the actions of those investments, which we have made in the last few quarters, have started to show in this quarter. So if you compare YoY, the reason is indirect cost going up as percentage of sales. But I think as the gross margin profile improves, the efficiency will improve because the investments have been made, and we will continue to make some measured investment. But with growing gross margin, the efficiency should improve as well.
I'm not sure whether this question has been asked because I joined late. So in the AGM meeting, a 20% guidance has been given on the net profit. So still, we abide by the guidance because there's a huge void between what we are now. And if I say, "Should that 20% net profit increase." Do you still abide, or is there any amendment to that?
So Ram, Uday did answer this in the previous question. But first of all, the guidance is actually an aspiration. We are just off its internal target that we have taken on ourselves, and we are running for it. It is an aspiration. And second is, it is an aspiration on the EBITDA level for 20% CAGR. So the efforts are definitely aligned. There may be, as we have done some work internally, we see that the targets, if you have to meet the targets, it is actually quite steep. So there may be a little bit of variation which may come in. But realistically, there may be a slip, but we are actually believing that we will deliver it, and all the teams are coming towards that. So having said that, the target is steep, and there may be a little bit of miss.
Right. Thank you. That's all from us.
Thank you. The next question is from the line of Mahek from Max. Please go ahead.
Yeah. Hello. Good morning. I wanted to ask that, are we covering all subscribers of Indosat right now, or only some of them? Is the deployment phase by phase, or have we covered all the subscribers right now?
Sorry, sir. Please proceed.
Yeah. The question was a little unclear. I was going to say that the voice was not very clear.
Yes, sir. The voice got you.
I'm trying to use my handset. Yeah, I'm using my handset. Hello. Can you hear me now?
You're on the speaker. Please use your handset.
Can you hear me now?
Hello.
But try speaking now.
Let me join back in the queue then. Hello.
Yes, sir. Please join back.
Yeah, I'll join back in the queue.
Thank you.
No, no, no. I can answer that question. I understood that question, right? What he's trying to ask you is, is the Wisely.ai, which is deployed with Indosat right now, is covering all subscribers or not yet? The answer is yes. This deployment is to cover all the subscribers, and we went live with all the subscribers. Ritu, my voice is clear?
Yes, it is much better. Please continue.
Yes. Yes, it is. We could hear you.
Yeah, yeah. So I already answered the question. Let's move on.
Yes.
Thank you, sir. We'll take the next question from the line of Bhavin Salva from BK Corporation. Please go ahead.
Hello. Very good afternoon to each and everyone. Last time, I had a question on buyback, and I was told that you guys would be getting back to me. Till now, I have not received any email or phone call. And the second thing, today also I had joined on time, but I was not able to hear the management's guidance or whatever they talked about. Directly, the music was going on. And when the question-and-answer session started, that time only, we were able to hear. So please, please see to it that.
Sure. Anubhav, what is this question on the buyback? I didn't understand. If you understood, please answer.
There is no question. Yeah.
Last time only I had given my question, and the management was not able to answer it, and I was told that you guys would be getting back to me.
Now, can you please repeat that question?
Last time, I had asked the question that what are the financial calculations that we did before going for a buyback? Because certainly, they answered me in that way that it is in favor of the investors, and while taxation, it is only and only your rate of buying which is considered. And I was offering a clear opinion that our buyback rate is only the rate which matters and not our purchase rate. So they were like, "No, we have done the calculations, and we'll get back to you." But till today, no one has got back to me.
No, no, no. So we were advised by the Kotak bankers, and we were told to repeat it all.
That was told to me. But after that thing also, I was told that you guys will be getting back to me.
There is no need to get back to you. Okay? So we were guided by the Kotak, and they understand the regulations very well. Okay? And if you have any questions, please send them to investors at the channel. Then we'll reply. Okay? Thank you.
Okay. Great. Thank you.
The next question is from the line of Ram Tava, who has rejoined the queue from Capita Investments. Please go ahead.
Yeah. Thank you, so I just want to hear about Wisely ATP that happens to be a very potential product for us, and are you seeing any green shoots around that, or is it a product which is no more we are banking upon? Now we are more focusing on Wisely.ai?
It's a good question. Anubhav, let me answer that.
Yes.
Yes. Ram, can you hear me?
Yes, sir, so I can hear you. Please go ahead.
Yeah, yeah, yeah. So the way we should look at this, Wisely ATP is a solution which we launched in India quite some time back. That is a solution. Okay? So that solution is there to protect the end subscribers. So we call it as anti-scam for a solution like that. Okay? And the one we launched in Indosat is more a platform, which we call it as Wisely.ai. Okay? On top of the platform, we are supposed to launch, we have launched two solutions, including Wisely ATP, which we don't want to call it as Wisely ATP on top of Wisely.ai. We call it the anti-scam solution. And the second solution is anti-scam solution. So going forward, we deploy only Wisely.ai wherever we get a chance to deploy with the telcos. So Wisely ATP, whatever we launch in India, we'd like to restrict ourselves only to India.
But for the global market, we will end up deploying only Wisely.ai.
Yes. Understood, and so it's a question from my sort of feedback. I'm not sure with managing the Investor Relations for you, but there will be hardly any response. Last two years, I might have written three to four emails to them, but not in a single email I got a response from them. They didn't bother to acknowledge the email, so I request to look into that investor relations team, whoever is managing that, so that will be helpful for us to resolve our queries.
Ritu, do you want to comment on that? You are the one who has to reflect all these mails.
Sure.
Ritu?
Yeah, yeah, there, I will check. We've been responding, but I will recheck the mail that has not been responded.
Yeah.
So thanks. Thanks.
Thank you. Participants who wishes to ask questions may please press star and one on the touch-tone phone. We'll take the next question from the line of Vaishnavi Gurung from Craving Alpha. Please go ahead.
Hi. Thank you for this opportunity, sir. Three or four questions from my side. My first question is on the top line growth. If we see from the last three or four quarters, there has been little to no growth on a year-on-year basis. So if you can share a realistic revenue growth target?
So, Vaishnavi, you would have seen that there are three quarters of consecutive growth in top line. So we think obviously we feel that it should continue, but obviously we can't comment on the numbers on a going forward basis. But there has been growth in the last three quarters, and we are expecting it to continue.
So sir, if you can give a broad range?
Can't comment on the range as well. Vaishnavi, looking forward, statement can't be given.
Okay, sir. So the second question is on the EBITDA side. As you mentioned that you will miss the guidance and given the current H126 performance, we have not performed very well on the EBITDA side, and we may miss the margin. So sir, if you can share the expected EBITDA margin for FY 2026, or if you want to revise the guidance, that would be ideal.
Yes. We have not given a guidance. It is actually an internal target which we indicated to the market. It is not a guidance given. We have taken an internal aspirational target which we are trying to achieve. If you look at H1, break it into two quarters, definitely the second quarter we have seen another gain. So.
Anubhav, let me answer that correctly.
Yes.
Okay. So Vaishnavi, the way it works is, when we worked on the annual operating plan, we shared with the board with certain assumptions. Okay? So we have, in fact, we have conducted one of the board meetings only to consider certain assumptions. So a lot of assumptions are there. So based on the assumptions, we have built an annual operating plan, and that's what we shared with the market. We call it as aspiration, right? That's the number one. Okay? So when we considered the aspirations with certain, what do you call this thing? So where we went wrong was we never realized that the gaming industry would be in trouble, right? So the gaming industry, you know the history, including Dream11, which is one of our biggest clients, which Deepak will explain now. Okay? So that has really pulled down a number. Okay? So that's number one, right?
So the second line item, again, Deepak would explain now, is on the incentives of WhatsApp, Meta, okay? Because of that, we see a bit of risk with INR 50 crores, okay? So we should be able to achieve a minimum of INR 750 crores EBITDA this year. So we're not going to revise any aspirations we were trying to achieve, but there is a bit of limitation here. Deepak, do you want to add anything here?
Yes, yes, okay. So I just want to say one more time, as we have mentioned several times in the past, that in the enterprise market, we lead in each and every vertical. So we are present in each and every vertical, and we are the leaders. So if any vertical is growing very fast, the number of transactions are increasing, very likely tarrifs and ValueFirst business, our enterprise business will also grow.
But if any vertical is under threat, then that business will take a hit for us as well. So having said that, we were the market leaders in the gaming industry. Dream11 was our largest customer in gaming. And then we had another customer like My11Circle, the RummyCircle, and there are so many of them, right? You must have seen so many gaming companies doing either they are into cricket or they are into poker and stuff like that. So all these customers were our customers. And overnightly, with one regulation, the entire business has gone. So that has impacted us, and that will impact us in the future. And on the other side, about Meta, though we are doing very well with the OTT business, we are doing very well with WhatsApp business.
But in the middle of the year, Meta has taken away certain incentives, which we forecasted as a part of our gross margin calculations. So that has put us a little bit on the back foot, but we are working on it. And we are working very closely with Meta and how we can make up for that, how we can compensate, how we can make more money. And we are closely working with them, and we are very hopeful to find some solutions over there.
Thank you, sir. Just one follow-up question. How big of an impact do you see from the incentive from Meta side that you mentioned on the margin side?
Anubhav.
So Vaishnavi, I would suggest that I would basically say that Uday has already given an indication of the numbers that it may slip, and anyways, he mentioned that it's a target. So the quantum of miss that he has mentioned has the elements of assumptions which have gone in a negative way, like the impact of gaming, impact of WhatsApp incentives, and a couple of other things. The delta has already been mentioned.
Okay. So my next question is on the AI side. So how is Tanla adapting to AI, and how are we seeing demand on the AI side? And versus with bigger companies evolving and doing things internally, how are we planning to tackle that?
So Vaishnavi, we have already launched Wisely.ai platform. I think we are the only company in the world which is on CPaaS, has taken AI very, very seriously. We have spent a lot of investments on this platform for the last one year, and our platform is live with Indosat. And the solution that we deployed on top of this platform are massive market expectations. Okay? So we are here to invest on AI, not only for our solutions, products, and platforms, but also we're trying to see how we can use AI for our internal process. So we are the biggest believers of AI, and we continue to invest on AI.
Okay. And on the second question?
What is the second question?
So the second question was on the companies. As bigger companies evolve, and they are planning to do things internally. So how are we going to do that?
That's what I told you, right? I already answered that question. Our internal process also, we are trying to see where we can deploy our AI. So we are the biggest believers of AI. That's what I told you.
Okay, sir. Last question on.
Sorry, we can't hear you.
I'm sorry.
Last question.
Sir, I'm sorry. Ma'am, sir, she has left the queue now. We'll take that as the last question.
Okay. Okay.
Ladies and gentlemen, as that was the last question for today, I would now like to hand the conference over to Ms. Ritu Mehta for closing comments. Thank you, and over to you, ma'am.
Thank you very much. In case any questions are still not answered, please reach out to Investor Help Desk. Wish you all a very happy Diwali, and thank you.
Thank you, guys. Happy Diwali. Thank you. Bye-bye.
Thank you, sir.
Thank you.
Thank you, members of the management. Thank you. Ladies and gentlemen, on behalf of Tanla Platforms Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.