Tanla Platforms, Indiamart Intermesh, LTIMindtree: What analysts say post Q3 results

Shares of Tanla Platforms tanked 5 per cent while those of Indiamart Intermesh and LTIMindtree were trading marginally higher after their December quarter results. Tanla Platforms was expected to report a soft quarter and that revenue and margins met analyst expectations.  LTIMindtree's operating performance, however, was weak, said a brokerage.

Tanla Platforms

YES Securities said Tanla Platforms' operating performance was inline with its expectations, with both revenue and Ebitda margin coming in as per its estimates. The company reported revenue of Rs 869.60 crore, down 1.7 per cent YoY. Enterprise revenue was down 3.4 per cent while Platform business grew 18.8 per cent YoY. The gross margin for enterprise business grew from 17.2 per cent in September quarter to 17.9 per cent in Q3FY23, while gross margin on Platform business dipped from 96.5 per cent in Q2FY23 to 96 per cent for the quarter, it said. The brokerage noted that Trubloq processed 82 billion message in December quarter and that the company's return on equity for the quarter stood at 31 per cent.

Ebitda margin rose 101 bps QoQ (down 552 bps YoY) to 17.4 per cent for the quarter. PAT rose 5.5 per cent sequentially, supported by lower taxation and finance cost, it said.

"Overall, inline operating performance for the quarter. The management commentary on margin outlook going ahead and traction in Wisely Platform would be key to watch out for. We currently have BUY Rating on the stock," YES Securities said.

Indiamart Intermesh

Nuvama Institutional Equities said Indiamart delivered strong growth and even stronger collections. Paying subscriber addition is lower-than-expected due to seasonality, which shall bounce back from Q4FY23, it said as the brokerage expects margin has bottomed and would start to increase from beginning of FY24.

For Nuvama, Indiamart Intermesh reported in-line revenue and margins. Improved realisations drove growth, it said. Cost escalations persist owing sales force ramp-up, which is preventing meaningful margin expansion, the domestic brokerage said.

"We believe Ebitda margin has bottomed at 28 per cent, given backfilling of headcount is in its last phase. Going forward, profitability is likely to improve over long term along with a rise in sales productivity," it said  We rate IndiaMART ‘BUY’ with a TP of INR5,245, valuing it at 45x FY24E P/E.

LTIMindtree

Emkay Global said LTIMindtree reported a weak operating performance in December quarter. Revenue grew at a modest 1.9 per cent sequentially on constant currency terms, impacted by higher than anticipated furloughs and lesser working days, it said. Ebit margin saw a sequential decline of 360 bps on account of lower number of working days and furloughs-induced impact, integration-related costs and increased employee & operations cost, it said.

The company management expects revenue growth to accelerate in Q4, as the effect of furloughs eases. Ebit margin is also expected to improve sequentially in Q4, on the back of receding influence of furloughs and lower integration-related costs. The management is confident of improving its revenue growth & margin trajectory and delivering top-quartile profitable growth FY24 onwards.

"The company has experienced deferral in some projects and delay in decision-making, but not any project cancellations so far. Order intake stood at $1.25 billion in Q3, with book-to-bill of 1.2 times. We cut EPS by 1-6 per cent for FY23E-25E, factoring-in the Q3 performance miss. We maintain HOLD with target price of Rs 4,600 per share (earlier Rs 4,700) at 23 times December 2024E EPS," Emkay Global said.

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