Multibagger IT stock rose 2,100% in five years; buy, sell or hold?

Shares of Tanla Platforms have delivered multibagger returns in the last five years. The shares of the cloud communications firm closed at Rs 933.35, up 0.18% on Friday. Market cap of Tanla Platforms stood at Rs 12, 549 crore. The multibagger stock was trading flat at  Rs 934.75 on BSE today. The IT stock opened higher at Rs 944.65 in the current session. Tanla Platforms stock has lost 15.61%  this year and risen 48.42 % in the last one year. The stock delivered multibagger returns  of 2104% in five years.

Total 0.21 lakh shares of the firm changed hands amounting to a turnover of Rs 1.95 crore on BSE. The stock hit a 52 week high of Rs 1317.70 on July 24, 2023 and fell to a 52 week low of Rs 615.05 on April 24, 2023.

Ganesh Dongre, Senior Manager - Technical Research Analyst, Anand Rathi Shares and Stock Brokers said, "On the daily chart, the stock has seen support at the price level of Rs 880–890. We have also seen a fresh breakout in this counter at the price level of Rs 880 as a channel breakout. Looking toward the other technical parameter, MACD is also turning up for this stock. So traders can buy this stock at the current market price of Rs 930 with a stop loss of Rs 870 for the target price of Rs 1030."

HDFC Securities expects the Tanla Platforms stock to reach the Rs 1,300 mark in a year.  It has maintained a buy call on the IT stock.

“We expect revenue/EPS CAGR of 19/20% over FY24-26E. We reduce our EPS estimate by 3% for FY25/26E to factor in near-term weakness. We maintain our BUY ratings and assign a target price of Rs 1,300 based on 23x FY26E EPS. The stock trades at a P/E of 20/16x FY25/26E and generates RoE of 30%,” said the brokerage.

The stock has a beta of 1, indicating average volatility in a year.

In terms of technicals, the relative strength index (RSI) of Tanla Platforms stock stands at 52.3, signaling it's trading neither in the overbought nor in the oversold zone. Tanla Platforms stock is trading higher than the 20 day, 30 day but lower than the 5 day, 10 day, 50 day, 100 day and 200 day moving averages.   

In the third quarter of the last fiscal, the software services firm reported a 20.3 percent on-year rise in net profit at Rs 140.1 crore against Rs 116.5 crore in Q3 of the previous fiscal. Net profit margin came at 14 percent. Revenue from operations in Q3 climbed 15.3 percent YoY to Rs 1,002.6 crore against Rs 875.7 crore in the December quarter of previous fiscal.t

Tanla Platforms Limited is a technology-driven communications company providing cloud communication solutions. The company counts prominent companies like Vodafone, Airtel, Facebook, HDFC Bank and Axis Bank among its clientele.