The recent dramatic drawdown and now the disappointing quarter!
I am afraid that possibly somebody else may be eating Tanla’s lunch.
“We are progressing well on our one platform strategy-Wisely. Q1 had some operational headwinds in the Enterprise business, but we have our building blocks in place to accelerate our momentum in the coming quarters. We have a strong balance sheet and excited by the opportunities ahead of us.” - Uday Reddy, Founder Chairman & CEO
“Market disruption: We saw market disruption of pricing both in NLD and ILD business in select customers which impacted our EBITDA. We have been quick to respond by taking an approach of making focused investments on our priority customers.”
Could somebody who speaks “management” decode this? To me, it appears competitors provided better pricing forcing Tanla to reduce their pricing? The usage of “priority customers” is very worrying. This means some big customers are bargaining hard on pricing.
If my understanding is correct, THIS SHOWS MINIMAL SWITCHING COST FOR CUSTOMERS- a definite negative for Tanla?
“From an internal perspective, we had some challenges in scaling our legacy infrastructure as our volumes have scaled substantially over the years.”
This is very worrying. Tanla keeps accumulating cash and does not upgrade infrastructure on a timely basis? Have they been boosting free cash flow at the expense of timely upgrade of computing infrastructure. Quite shocking tbh.
For now, my call is to sit tight. Will await Q2 results and take a call whether to REDUCE. I am afraid the stock will take a major beating in the coming days for sure.
Disc - Invested and hurting bad. Clearly, you should not take my words as
investment advice.
