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This small cap stock gave 1,800% return in 9 months, tops 2020 multibagger list

Chitranjan Kumar     January 6, 2021

Shares of Tanla Platforms hit an upper circuit of 5 per cent at Rs 936.6 on Wednesday, extending its winning streak for the third consecutive session, after the homegrown cloud communications provider said it is set to launch a new digital platform in association with Microsoft later this month. Previously known as Tanla Solutions, the stock delivered a massive return of 1,838 per cent over the last nine months, from its 52-week low of Rs 38 as on March 24, 2020, and 878 per cent in six months. In the calendar year 2020, Tanla shares rose as much as 867 per cent, one of the highest in the small cap space. The reason behind its massive rally is robust quarterly results, inclusion into MSCI India Domestic Small Cap Index, and stake purchase by foreign investors.  

Extending its rally, Tanla Platforms shares opened higher at Rs 707 on Wednesday against the previous closing price of Rs 701.55 on the BSE. During the day's trade, the stock hit an upper circuit of 5 per cent to close at Rs 936.6. In contrast, the BSE benchmark Sensex ended at 48,174, down 263 points or 0.54 per cent.  The market cap of the small cap stock surged to Rs 10,020.44 crore. The stock had hit 52-week high of Rs 905.15 on December 10, 2020.  

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In November last year, the company announced that it was added to MSCI India Domestic Small Cap Index. This triggered strong demand for the stock from FIIs and institutional investors. Massachusetts Institute of Technology (MIT) and Vantage Equity Fund bought 9.85 lakh shares (0.72 per cent) and 6.85 lakh shares (0.5 per cent) equity stake, respectively, in the company via bulk deals. Besides, Amansa Investments, American Fund Insurance Series and Mobile Techsol bought 40.84 lakh, 86 lakh and 17.1 lakh shares, respectively.

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For the July-September quarter of the current fiscal, Tanla Platforms posted a consolidated net profit of Rs 81.47 crore as against a net loss of Rs 47 crore in the year-ago period. Net sales rose by 19.7 per cent to Rs 583.25 crore in Q2 FY21 over the same period last year, while its EBITDA jumped 210 per cent to Rs 97.5 crore. During the quarter under review, the company acquired as many as 83 new customers from verticals such as banking, financial services, e-commerce, gaming, OTT, etc., including established brands to high potential start-ups.

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