Tanla Platforms ~ Leading player in the fast-growing CPaaS market

Some more updates on the acquisition based on Uday Reddy’s CNBC interview:

• Incremental revenue addition to Tanla upon consolidation will be 650Cr out of the 950Cr as VF was an existing customer of Tanla

• This also means that the VF biz quality was better than it seemed at first glance. They were doing a 52Cr EBITDA on a value addition of 650Cr at 8% EBITDAM with 300Cr being pass through revenues via Tanla

• Plans to improve VF EBITDAM from 5% to double digits in 2-3 quarters via sourcing consolidation and higher bargaining power – This effectively means improving VF margins from 8% to double digits, that doesn’t sound outlandish or unachievable in the given timelines. If they do manage 10% EBITDA for VF and a 15% growth, VF may contribute 75Cr EBITDA in the first full year pre-ESOP costs. Post ESOP EBITDA should be around 50Cr.

• VF India to be consolidated from Q2 onwards, VF Middle East may be consolidated Q3 onwards