Tanla Platforms Limited (TANLA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Tanla Platforms Limited Q1 FY '23 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ritu Mehta from Tanla Platforms Limited. Thank you, and over to you.

Hello, everyone. I'm Ritu Mehta, and I lead Investor Relations for Tanla Platforms. On behalf of everyone at Tanla, I would like you to welcome to our earnings call Q1. Joining with us today are Uday Reddy, our Founder, Chairman and CEO; Deepak Goyal, Executive Director and Chief Business Officer; and Aravind Viswanathan, our CFO. Uday Reddy, our Founder, Chairman, and CEO will share his perspectives of business imperatives and strategic progress made by Tanla. After his opening remarks, we'll be happy to engage with the participants and address their questions. Before I hand it over to Uday, let me draw your attention to the fact that today's discussion may feature statements that are forward-looking in nature. All statements other than statements of historical facts could be deemed forward looking in nature. Such statements are inherently subject to risk and uncertainties, some of which cannot be predicted or quantified. A detailed disclosure in this regard is mentioned in the results presentation that is uploaded on our website. Now over to Uday.

Yes. Thanks Ritu. Good afternoon, everyone. A very, very warm welcome to our Q1 Earnings call. I hope you had a chance to see our results. I will specifically cover 2 areas in this call before we go to Q&A. The first one is I will talk about the Q1 performance, and I also would like to give a quick update on the areas of strategic focus. After many quarters of our consistent performance, we have had operational headwind in Q1. We delivered 28% revenue growth in a seasonally weak quarter. But we faced headwinds which affected our profitability. We had internal and external factors affecting us. And let me give you a view of the same. We had some challenges with our Karix platform. We have seen significant growth over the past few years in terms of volumes, and we needed to upgrade our current infrastructure to meet the scale requirements and deliver top-notch customer experience. This caused some short-term impact on our EBITDA. However, I firmly believe this was the right thing to do from a longer-term perspective, and we don't see any EBITDA impact due to this going forward. The second aspect was unfavorable exchange movement between euro and dollar. And this affected our EBITDA by almost by 1%. We also had some market disruption with some customer, a specific impact affecting our profitability in Q1. In total, we had a cumulative impact on EBITDA of almost around 4.5% due to these factors. We expect that most of the impact is one-off, and we should get back to operating at the levels around 20% in the next 2 quarters. On the overall market, I am quite excited about the potential here. We continue to grow our existing clients and add market new clients. Our platform business grew around 23% year-on-year and operated at 95%-plus gross margins. We are making significant progress on our Wisely journey. We have deployed our AI/ML-based firewall with the VIL, and it went live in Q1 and it is expected to scale in Q2. We also had launched Wisely Insights. I have personally taken this Insights and discussed this with the global tech giants, and I see tremendous traction with them, which should translate to more business for us in the coming quarters. We have launched Truecaller towards the end of Q1. Our beta launch was very successful, and we now see a lot of traction in Q2. We are seeing a lot of interest from enterprise customers. I'm very excited by our potential here. We also announced our exclusive partnership with Kore.ai, a leading conversation platform around Wisely. So, as you can see, multiple components of our strategy are coming together well, and we have built a solid foundation. And I am confident we will deliver profitable growth in the coming quarters. Now, I would like to hand it over to Ritu to carry out Q&A. Yes?

[Operator Instructions] We have the first question from the line of Aniket Pande from ICICI Securities.

I just wanted to get some clarity on margins, actually. Apart from the currency headwind, sir, are you seeing increased pricing cuts in the industry due to increased competitive intensity in the industry in last 2, 3 quarters? Secondly, sir, in your PPT, you have mentioned headwinds such as market disruption and modernization also. Can we know in detail exactly what are you referring to in that?

Sure. Talking about -- you have 2 questions there, right? One in terms of the overall pricing environment in the market. I will ask Deepak to cover that. And then I will -- then we will come to your second question on this entire platform modernization piece, and we can cover that. So, Deepak?

Good evening, everyone. Yes, Deepak here. Yes, you asked a question about pricing environment the last 2, 3 quarters. So I would say pricing environment per se is overall stable. Overall, we don't see any pricing competition as such, okay. Though it's always little bit of price erosions are there, but this is very normal for our industry. But, as Uday mentioned, we have seen in one of our large customers, where we were getting significant volumes and there, we have seen pricing being quoted much lower, which didn't make sense to us to work on those prices and we decided to scale down our volumes with that customer. And while the transition was taking place to the other providers, we had to serve at those prices in Q1. And hence, we saw our margins going down, but -- and that may -- that impact may be there for some part in Q2 as well, but then going forward, I don't see any issue.

The next question is from the line of Balaji Subramanian from IIFL.

So my first question would be on this pricing pressure aspect. So we did see that one large customer was offered lower prices by one of your competitors. And is this one-off in nature or is there a risk that the same competitor, which I believe is a large telco with a fairly strong balance sheet and focusing aggressively on the Enterprise segment, is there a risk that it offers similar pricing in other accounts and we will probably face incremental pressure even if this particular customer sees volume ramp down? That is number one. Number two is with the scale down in volumes with the first customer that you mentioned, what should one think about your revenue growth going forward? Because we have been seeing that in the last 2, 3 quarters, the revenues have been largely range bound between INR 800 crores and INR 900 crores, and the Y-o-Y numbers still look good because of the tailwind from the ILD SMS rate increase. But now going into 2Q that will anniversarize and Y-o-Y comps might get difficult? That is from me.

Deepak, would you want to address that?

Yes, yes, sure. Balaji, yes, so I would like to say that we have seen our multiple bids after this particular bid, okay, and I have not seen anything like that. I would say this is a one-off, where our competitor just decided to quote whatever they quoted, and I am sure they must have realized what they have done, because I have not seen anything happening afterwards. Because in Q1, we -- generally after 2 or 3 years, there are so many bids get due from certain number of customers. So, I don't see an issue going forward. As far as our revenue is concerned, definitely, when there is some sort of a price erosion, then it impacts the revenues. But we have been winning a lot of new businesses, a lot of new customers, and you would see growth in revenues in the coming quarters.

Okay. Deepak, that is helpful. So, let me put the first question in other way. So if I were the telco which is wreaking havoc, and I have a fairly large enterprise business where CPaaS is one of the key elements, but I also have other offerings starting from connectivity, cloud, security, et cetera, so clearly there is some bit of flexibility on the CPaaS front because I can cross-subsidize some of this with some of my other offerings. So what do you think would prevent such a large company from kind of going a little low on the competitive front going forward? Because basically, what I am asking is what gives you the comfort that they won't attempt something like this with more accounts?

See I -- sorry.

Deepak, go ahead. Go ahead.

See, first of all, I cannot comment about their thought process. Okay? But at the same time, as I said, that there are -- more bids have happened after that, and we have not seen something like this. I would say that this is one-off because the kind of prices were quoted, those are not viable for anybody to do that. And it has nothing to do with what other offerings they have, because we also have other offerings, but we don't quote such prices. I mean -- and just to tell you from the same account, we have won a very big WhatsApp business as well. So we feel that in the coming quarters, we would be back with the kind of revenues or margins we were making. So we are very confident about it.

The next question is from the line of [ Ashish Rathi ] from Lucky Investments.

In the media articles, we have read about this Nasscom making a case to RBI to change the regulation to include in-app notifications instead of SMS. Your understanding and take on the same please, as it is a concern for us investors, in terms of overall sustainability of our existing business models. I would love to get your perspective on this, please.

Yes. Ashish, Uday here. See, this in-app message has been around for quite some time, right? It's not new technology, which is available now, right? It has been there for quite some time, that's number one. Number two, we -- it was never a successful model. In fact if I am allowed to name, all the tech giants have got their apps sitting on the -- for example, all the tech giants, their apps sitting on the mobile phone, they can afford to use their in-app messaging. But still, they use SMS, the channels to reach out to the customers because in-app messaging is not reliable. One should have data all the time for somebody to receive the messaging, in terms of in-app, that's number one. Number two, it is not reliable, because SMS can deliver in less than four seconds from the time it leaves the enterprise to the handset. But in terms of the in-app, we don't know. It may take a bit of time. Okay? So we don't see -- I don't see any challenge here, okay? And in fact, tech giants tried their best to use their apps to reach out to their base consumers in India and globally and they saw the result and they started using the SMS and other channels. So I think it is blown out of proportion and we are quite indifferent to this access.

Sir, the whole case in point they are making is mostly about the pricing, where at least the media article suggests that it's INR 0.12 per message versus the in-app notification of 0.001. So it -- could there be a case of a downward pressure on the revenues or the pricing that we have and that is something that the previous participant also tried to indicate it towards. What is your sense of the pricing at the company level in terms of SMS going forward? Is it something that is sustainable over a longer period of time or it's something that could possibly go down as a business?

[Ashish] like you know, so we are in this business for more than 20 years, right? Okay and so SMS is very, very secure and more reliable as a channel. And it will remain in the space. In fact, as we speak, the volumes are going through the roof in the last couple of years. So I don't see any challenge in terms of the channel, per se. That's number one. In terms of price, Deepak has already explained about the price. So we don't see any challenge there. Everybody has to service their customers. Everybody has to earn their margins. A couple of customers, for some reasons best known to them, may try to disrupt for 1 or 2 customers, but we don't see any challenge with any other customers either in terms of the price or in terms of anything other than that. So we don't see any -- absolutely, no challenge at all. We will definitely grow. Our volumes are growing. We are growing much faster than industry. So we don't see any challenge.

And just the second question is on can you give us an indication of what percentage of revenue presently comes for us from SMS for banks and fintechs combined?

I am afraid we cannot share. We have bit of an NDA on the bank, but yes. Sorry? 30%.

Roughly, around 30%. We're not calling out the exact numbers, but that's the largest vertical for us. Yes, so that is where it is. But the other point I would just make, [ Ashish ], is that probably SMS is still one of the lowest costs in India compared to any other market, even if you take Asian markets. So some of this noise about the SMS being very expensive is not in congruence with what is happening in the globe.

In fact, [ Ashish ], to put into perspective, let's talk about the ILD prices in general in Asia, forget about other parts of the world, right, from Sri Lanka to Bangladesh, to Philippines, Indonesia, Vietnam, Middle East, Russia, like they are varying -- they are hovering from $0.06 to almost $0.20. Okay? We are still at -- we are at $0.03 'til end of July. And Indian telcos made it to $0.04 recently. So in terms of -- there is a long way to cover in terms of pricing, both domestic as well as international pricing. We are one of the lowest -- I mean our prices are very, very low when compared to the global markets.

Sure. So the case in point then is about security. So like in terms of in-app notifications versus the SMS, which one is more secure? And is there something which cannot be done by say, an SMS in a fool-proof manner, which may be can be handled better by in-app notification? Just technically, if you could help us understand?

I think it is proven that like SMS is more secure, both in terms of technology and so on and so forth, like. So that's the reason like, RBI has mandated only SMS as a channel to use for the OTPs and other notifications, right? It clearly says that it's a more secure channel than any other channels.

And also, SMS effectively becomes a second level of security. It's not a standalone, right? So for many cases, the app talks to the SMS, so definitely, it is more regulated, it's more secure. And there are enough instances of that being documented across the globe.

The next question is from the line of Anil Sarin from Centrum Wealth.

I wanted some clarity that this technology upgradation that has been done, how much money has been spent on that? Again, in the rest of the year, is there more money to be spent on technology upgradation? That is part one of my question. The second part is, in continuation to the earlier person is that despite this setback, for the full year, if you can give a rough split of the revenue growth. There are few pressures and pulls in terms of some disruptive pricing by somebody, the ILD tailwind going away, new clients getting added, so it is quite a complex thing. But like most IT services companies, they like to give out whatever revenue guidance, so we would really appreciate if you can give us some revenue guidance, taking into account all the pluses and the minuses that you are currently seeing. So these are the 2 questions that I have.

Anil, Uday here. Anil, I think we made it very clear number of times, we don't give the guidance. That's number one. But having said that, I made it very clear today, we went back almost 16% levels in terms of EBITDA. But we should get back to operating at the levels around 20% in the next couple of quarters. So we are pretty confident we will come back to the 20% EBITDA margins in the next couple of quarters.

So for the full year it will be 20? Or you will recover to that level in the coming 2 quarters? Or for the full year, fiscal '23, that would be total EBITDA margin would be 20%?

Sorry, Anil, I lost you in between. Can you, please, repeat?

So my question was, will it be for the full year when we close the books of account for this financial year '23, it will be 20% margin or it is 16% this quarter, then improving, then improving and ultimately reaching 20%? Which of the 2 will it be?

I'm not confirming either, Anil. All I said was we were operating at more than 20% for the last 6 quarters. Our priority is to get back to 20% as soon as possible. We have very, very clear strategy. We have a lot to leverage, and we have seen the traction in the Q2 itself. So I think our top priority is to go back to 20% as soon as possible. Okay? So I don't want really -- I'm not saying that we're going to go back in the Q2 itself, but in the next 2 quarters, we are going to -- definitely going to reach 20%. So that's our top -- first target. Once we reach 20%, then we'll see how it goes from there.

Okay. And on a related note, any update you can give us about Wisely? Post the 2 names that you had shared with us in terms of Vodafone and Truecaller, any further update? Because the thinking that we have is that as Wisely gathers momentum, naturally the margins would go up.

Absolutely, Anil. Absolutely. I completely agree with you. So the Truecaller, as I mentioned in that part of my speech, we went -- that beta launch was very, very successful. We went commercially live in Q2. All I can say is it's doing phenomenally well. It has really surprised all of us. And Truecaller team and our teams are working very, very closely to take this Truecaller and Wisely to the next level. I think we are pretty happy on the Truecaller relationship. That's number one. Number two in terms of Wisely, the VIL network deployment, it got delayed little bit because it's a very complex product, which is a gigantic product, which means you have to integrate it, integrate at the different levels. It got a bit delayed, though it went live still. There's a bit of integration still pending. So we have started clocking the revenues in the Q1 itself. But we are expecting the momentum in Q2. So to be honest with you, I am pretty happy about Wisely journey so far. This will definitely add to the better margin in total.

Okay, great. Yes, just as a follow-on, there was a note brought out by a broking firm, I think HDFC Securities, where they have mentioned that the market size, the total addressable market for Wisely is 10 to 20 -- sorry, 1 billion to 2 billion. Basically, in Indian rupee terms, INR 100 crores to INR 200 crores. Now I surely think that is a typo or I mean is that the market size that one is looking at for Truecaller -- for Wisely?

Anil, I don't think HDFC said what you are referring to. I don't think they have mentioned INR 200 crores is the market -- the TAM for Wisely. I don't think they mentioned that unless until I missed out that point, which is not true like. So total CPaaS is 1.5 billion which is INR 10,000 crores market TAM in India alone. So the total INR 10,000 crores itself is a TAM for Wisely, the way I would like to look at. So it's not only just INR 200 crore, it is -- the complete market is a TAM for Wisely.

Okay. Just one point like what was spent on the tech upgradation, and everything has been captured in the first quarter or more to come in the coming quarters?

So, Anil, what happens, see, like now we continue to augment our platforms, because whenever we see there, we closely monitor our efficiencies of our platforms. So, at -- probably at 60%, we always augment our platforms. What happened this time was our volumes have gone through the roof in the Q4. And by the time we could able to augment our Karix platforms, it took a little longer than what we expected to source software and hardware from outside India. That's where it completely derailed. So but that was fixed then and there. So you asked what is the investment that we have made? I think around INR 15 crores to INR 20 crores which is already capitalized in Q1. But that's a big investment for Karix as now has got a new platform. This is pretty stable and it's holding well. So customers are extremely happy with the new platform. So it's a continuous source, we don't need to keep investing, it's one-off expenses, Anil.

Okay. Just one last thing about that. Is it capitalized or is it expensed during the first quarter?

It's a capitalized earnings.

Capitalized, but I mean the impact for the quarter is also because some of the disruptions that we had, when we had those issues while upgrading, that flows into GM. Some of the operational costs flows into GM, but the big CapEx investment flows into depreciation, right? So, it's a combination of multiple line items there.

Okay, okay. So the gross margin decline that the Enterprise business has seen from 23% to 17%, that contains both the impact of this software upgrade platform strengthening as well as the disruptive actions taken by competition. Both of them are there?

Yes, yes.

Okay. And so, part of it will not recur? The second part is obviously that is subject to how the market evolves.

Absolutely.

[Operator Instructions] We have the next question from the line of Miraj Shah from Dalal & Broacha. [Operator Instructions]

My questions are regarding in the beginning of the call, you mentioned that there was a one-time one-off client impact, and you expect to recoup this revenue loss. So you are expecting to recoup this from the same customer or from new customer addition?

A couple of things. Uday here. A couple of things. The way Deepak explained earlier is, one, from the same customer, we have won the WhatsApp business. In fact, the CMG went on live and they have mentioned that they're going to go live on the WhatsApp. And we are the one who's going to provide the solutions and services to this largest bank. So I think for time being, though, we lost a bit of margin and revenues, and we are very confident that we're going to recover revenues and margins from the same bank through different services. That's what Deepak has mentioned.

Right, right. And sir, related to that, the question was like are the switching costs so low pertaining to this business? Because as far as we remember in the earlier conference calls, you had mentioned that switching costs are extremely high in this business.

So we have 2 points there, right? So even if you look at their switching costs are high here. So in a sense that -- even in this case, we continue to be a vendor, a partner to the customer here, right? Although we've just chosen to scale down volumes. So this is an industry which operates with a multi-vendor approach. And to that extent, there is always switch once you integrate, right. So we continue to be with the customer, although we have lower volumes. So it's not that we are out of any customers. So that way, once you're integrated, you're integrated, but the volume split across the multiple partners can fluctuate between -- at times. Deepak, do you want to add anything more on this?

No Aravind, you have covered it. So yes, there are always 2 to 3 vendors with any large customer. And it just so happened that one of the vendors just decided to quote, go very, very low on the prices, so to gain a larger share from that particular customer.

Ashish (sic) [ Miraj ], let me clear that, we've not lost this customer. We have been serving this customer, but we have decided not to service at the levels that they want us to service. So we still getting the traffic but we're not happy with the current commercials.

We have the next question from the line from Amit Chandra from HDFC Securities.

My first question is on the margin decline. So apart from the cross-currency headwind that we mentioned, so if you can give more clarity on what was the margin impact in the Enterprise business, especially from the ILD and the NLD front? So most of the impact as you said is from one large customer that is mostly ILD, so is -- are we are seeing some pricing pressure in other pockets also apart from that large customer in the Enterprise business? And also, as you think that we will actually normalize to 20% in the next 2 quarters, so is it also having some seasonality impact, because the quarter 2, quarter 3 generally is the strong quarter? So is it because of seasonality or is it also because we are not seeing any pricing pressure in other accounts? So if you can provide some clarity on that, it would be great. And secondly on the Platform business. We have seen that the Platform business gross margins have been mostly maintained. So can we see similar pricing war or some similar pricing pressure on the Platform business as well and there, the margins can decline? Because in terms of competition, they also acquired a company, which is into DLT and they're also planning to launch something there. So if you can throw some light there.

Yes. So Amit, maybe let me start answering your first question, right? So your question is whether the impact was very topical specific or much more broad based. The impact of the customer in discussion is on the NLD and not on the ILD just for getting that clarity on, right, so it's not. So there was more specific and that is one of the reasons. In ILD, there are always pockets, but that is getting addressed more as business as usual. And Uday kind of mentioned about it that we are actually on a path of increasing prices in ILD in Q2 to drive our profitability. So that is definitely another variable, which is baked into our assessment, right? So I would say that, from the journey standpoint, there are 2, 3 things. One is there are one-timers that we are trying to offset, some of them will be really immediate, some of them may take a couple of quarters. Two is a lot of our new initiatives, new business will also kick in which will help drive profitability, right? So there are multiple factors in play. It would be difficult to peel out individual factors, but collectively, we have enough tools and plans in terms of how to get back there. So it's not just blind seasonality, because the drop here was not fully seasonality, right? So to that extent, that's how we are seeing it.

So in terms of platforms, I think the DLT is a consortium between Tanla, IBM and Tech Mahindra. They have deployed -- IBM and Tech Mahindra is deployed with other telcos and we deployed with most of the telcos. And so we don't see any challenge out there. In fact, we see absolutely no challenge.

Okay. And on the Wisely platform, so as the previous participant was mentioning just before, the applications of the 1 billion to 2 billion that I mentioned in the report was specifically for the revenue potential for the Wisely platform, it was not the TAM, right? So in terms of the revenue potential, what we are assessing is it can be another INR 100 crores to INR 200 crores. So what is going to drive that? And is it the deals that we have won? And are those deals are having the potential to scale it to that level? Or we will have to win more? Or it has to be more broad based? Or it will take much more time to scale to those levels? So if you can provide in terms of road map, how you're seeing the Wisely road map over the next one year?

Amit, I completely agree with you. In the sense like, as we speak, the market is around 45 billion, including government, per month. The transactions from SMS per month and the 45 billion is the TAM for Wisely. And as we speak, we are hovering around 2 billion. So, there is a huge potential to grow. Out of 45 billion including government, we have just onboarded only 2 billion, there's a long way to cover. So there's huge potential for Wisely platform. Yet, once the enterprises and the telcos see the value in Wisely, it is pretty easy to scale the volume.

The next question is from the line of Pranav Kshatriya from Edelweiss.

I have 3 questions. First question is regarding the gross margin for the Enterprises. If you can provide the bridge because it's a fairly sharp jump. You attributed 2 to 3 reasons for the 600 basis points, so which factor contributed how much fall in the gross margin? That will be useful. And also, for that particular customer, if you can tell us even the ballpark range of revenue which was impacted, because of that, that would be useful? Because the difference in the margin is pretty high, just to understand the scale of it. My second question is regarding the Platform business. How that seems to be sort of stagnating considering given Wisely rollout and inherent quality of the business. There was an expectation that, that growth will be much stronger and much sustained. So how should we see this going forward? And my last question is as there was some base effect into the pricing increase in the previous quarter. So if you can comment on how we are seeing the volume growth on a Y-o-Y basis in the current, this is for Enterprise business? These are my 3 questions.

So to your first question, just in terms of the bridge, right, we've talked about ForEx being about 1%, right, which is the impact on the EBITDA side. We have a specific impact on the -- the overall impact is about 4.5 at EBITDA, the balance, 3.5, is split between the platform modernization piece, maybe around 1% and the balance will be in terms of the customer specific one, right? So I don't want to give an individual size of a customer, but they were one of our top 5 customers, Pranav, which you have the metrics to give you a sense of that impact. That was your first question, right. Your second question was in terms of the Platform. See as Uday kind of mentioned, right, Platform business is not -- operates at a slightly different momentum, right. So you roll out a platform, it takes some time to stabilize. Just to give you a sense, Trubloq is probably one of the most profitable platforms in the world today, right? But probably from the time it was launched to the time you started scaling at full potential was about 12 to 18 months, right? So it is not a business which you will see movement in a slope kind of way. It will be more like a step kind of way, right? So you have seen us launch multiple aspects of our platform. So you know the building blocks are in, right? So we talked about Truecaller scaling up in Q2. We talked about VIL scaling up in Q2. So as this happens, you'll suddenly see a bump up 'til the next platform kind of gets commercialized and scaled. So you will have to look at this business with a little more patience, because it's much more profitable, but it takes a little more time because obviously, the integrations are deeper, it's more embedded in the customer ecosystem, so they're more complex. So that's really how you should read it. So the potential is high. And it takes some time, but and that's why we keep giving you these updates in terms of what we are doing, it's not static. Now as -- now, what has happened is we've got a momentum built with terms of our rollout. So you will have seen something coming from the VIL, you will see something coming from Truecaller. By the time these stabilize something will come in from Kore.ai. And then we will keep adding to it and after a point of time, you will find that there are some products kicking in every quarter, but we've not reached that rhythm yet, Pranav. So you will have to be patient on that. But all the building blocks are doing very, very well. And I think we will scale well on that.

Sure.

So your first question, right, I want to clarify one point that when we look at our Y-o-Y growth, our Y-o-Y growth is not driven by ILD, right? It's driven -- in fact, rest of the businesses are actually growing faster even in the enterprise system. So to kind of attribute pricing as a reason for Y-o-Y growth is probably a mistake, right? So this business, if you look at last year, we had similar questions where there is seasonality where numbers are a little horizontal between Q2, Q3, Q4 and that's a kind of trend that we've seen over the past 2 years. So I think that is how this momentum is in the business. And that's how we are going to kind of track it. We have talked about increasing prices in ILD in Q2. So we'll have to build and execute on that on the opportunities we have and that is what is giving us some amount of confidence in terms of how we are looking at the rest of the year.

The next question is from the line of Deepak Chokhani as an individual investor.

I have got 2 questions. What are the key levers to push international business? Is it just a technology by Wisely along with the various partnerships you are entering? Or will it be some kind of cost advantage? That's number one. Number two is any idea when voice DLT could be launched by the regulator?

Deepak, Uday here. So when the TCCPR 2008 came sometime in June, the regulation covers both SMS and voice, so this platform is built for both SMS and voice and as we speak, the operators went live only in SMS. But our platform is ready, that's even voice capabilities. So whenever the telcos and regulator decided to launch voice services, we are up again. So that's number two. What was the first question?

Whether Wisely is expected -- they have a different technology, what will make us succeed in the globe?

So Deepak, let me take a shot and Uday can add on that. So clearly, it's a technology play, right? It's a differentiation play. It's a value proposition play, right? It's not a cost play, because it's not -- it's kind of a low-cost platform, right? Value proposition is around the features of Wisely. It is not around it being cheaper, because the basic telco costs anyway are what they are in different markets. That per se is not a differentiation. I think what we are trying to do with Wisely is a little different. It is about being a single -- a platform of platform for digital interaction, a one-stop-shop for any customers, with trust, with blockchain, with all of those capabilities built in. And that's really how what is resonating with customers. Uday talked about, how Wisely Insight was received. And we have multiple people from who's who from a global tech major perspective, right, that is coming and interacting with us on the kind of output that Wisely grows. And that's really the differentiation and they are all looking at it, not India specific, but on a global basis. So we will have to execute and build on those conversations. But clearly, it's not a cost play, it's a differentiation play.

The next question is from the line of Amit Mishra, as an individual investor.

Yes. So firstly, congrats on yet another quarter with healthy year-on-year growth. But at the same time, we saw loss in wallet share from big clients and big margin erosion as well. So it's quite disturbing when we had the guidance in previous quarter to increase and able to maintain the margins. So -- and I don't generally talk about stock price, but you must have seen how stock was beaten today and this comes from the background of like big correction in last 1, 1.5 month. So it's a high concern for us if there are any other factors at play, because the result was not so bad, despite the margin erosion. So I want to hear your thoughts on that. Second question. I want to check with you about the global GTM and what's the time frame we are having? Because we discussed this thing last October, when we hired like one of the biggest consulting firm for the GTM strategy. Now it's 8 months and VIL has been in operations for last 3 months and we must be interfacing with them for last 6 months. So it's just like to check what sort of time frame they're taking because things keep on shifting. So I would like to...

Mr. Mishra, your voice is breaking down.

So you want me to repeat the second question or from the start?

Just the second question. We heard your first question. It's just the second question.

Second question, last line, yes.

Yes. So on the second question about -- I talked about the time we have taken with this consulting firm since October, November last year, so it's like 8, 9 months. And with VIL, we have been doing like this interfacing for the last 5, 6 months and we have been operational for last 3 months. So we were talking about case studies, now we should have it. So we want to hear something tangible and so that we can see, and we can anticipate things, what you are doing in this regard? So, if you can answer these 2 and then I can ask more if there is still time.

So, Amit, Uday here, okay? And all I can say is I'm not a -- I don't invest in any stock, so I cannot really comment on the stock movements.

You're the biggest investor in Tanla.

Yes, yes, absolutely, absolutely. I'm talking about other than Tanla, I don't invest, right? My point is very simple, right? What you really need to appreciate, all of the investors, like what we really need to appreciate is we have -- back-to-back, we have closed 3 largest partnerships in the last 9 months. The first one is VIL. We have a huge competition. Hands down, we won that contract purely on the merit basis, not on any other basis. And it's a long-term deal. Once you kick start revenues and the margins, it's a very, very long-term deal. In fact, let me go back -- let me step back now. I know when we deployed our platforms with some of the telcos in India, probably more than one decade, once we deploy the platform, that will go for a long, long time, okay? We don't deploy the platform for 6 months or 1 or 2 years, right? So winning the VIL is not easy. Hands down, we won the deal. We have been deploying. We are facing a bit of challenges, because there are too many integration points with the VIL, because Vodafone and Idea came together. There are a lot of network components are there. A lot of moving parts are there. So it has gone live. It's not fully gone live, but once it will go live, it's a long-term deal. That's number one, right? Number two in Truecaller. You know they're a large company from Stockholm. They have more than 300 million users, a pretty large company, right? So we have -- they are available only at Wisely, okay? It is not that just like each and every player in India and global have access to the Truecaller. It is exclusively available on Wisely, right? That's number two. Number three, we have closed Kore.ai partnership, again exclusive for 6 markets. There, one can go and read Gartner Quadrant report. They are the top end quadrant; they are market leaders as informed to the market. They have deployed couple of largest deployments on the planet, if I'm allowed to say, in fact, it is available in the public domain. They deployed with the biggest bank in the world, including the Citibank. So it is again available only with that only on Wisely. So it demonstrates the power of Wisely, okay? One cannot doubt even for one second, that's the first point, right? The second point is coming back to the consulting firm, yes, they have been working with us. With their help we have closed 3 largest deals. It takes a bit of time. It's not that like when you close a deal and generate the revenues from next day, that's not possible. We are extremely happy with the arrangement that we have with the consulting firm. It is working well for us and we are extremely happy about it. And in fact, we are fully fired up. Yes, we are, I think, being penalized today, but I don't want to really comment on that. But we're fully geared up. We are fully geared up. Our strategy is working. We know what our -- we are fully fired up. And we are going to come back and get back to 20% EBITDA margins as soon as possible. So we're fully geared up for that.

Sir, just one question on VIL. How much of migration has happened for Idea traffic?

So in terms of the -- it's not a question of traffic. It is fully divested in terms of traffic, but unless until we fully integrate, the 100% traffic doesn't come to us. It may go to other telcos from there, it may go somewhere. There's a lot of leakages in the market. One of the biggest advantages with our firewall is 100% of the legitimate traffic has to come to VIL consumers. That's the reason VIL has chosen to deploy Wisely deployment with them. So I cannot really talk in terms of percentages, but we are more or less there. And the next probably 2 weeks, we should be able to complete our integration with VIL Network.

Sir, on the GTM for global markets, I didn't get the answer. What time frame we are looking at?

Amit, like you know, see, when the strategy works for India, that strategy works for the global market, right? Now it is once the Wisely is available on the cloud, okay? For me to launch the services outside India, it's a matter of 2 days, okay? I don't need to go and deploy the platform in those countries. I just need to -- I need to set up the cloud and the global market, and everything is switched on the next 2 days, right? So it's not -- in terms of platform deployment, it's pretty easy, because Wisely is completely developed on the cloud. That's number one. Number two, in terms of GTM, when it is working with the Indian market, it is equally easy to replicate in the global market. So we're not in a great hurry to expand just for sake of it. We're not this kind of company. We want to be very, very cautious about our expansion plans. Once we see the -- once we -- India itself is a big market for Wisely. As I told you earlier, 40 billion to 45 billion messages per month, and we are handling only less than 2 billion messages. So there is long ground to cover in India itself, right? So here, expanding the global market is not an issue. It's a question of time before we see the success, and that will help us to expand.

Our next question is from the line of Deepak Poddar from Sapphire Capital.

Sir, I just wanted to understand I mean 'til last quarter, we have been committed to the rule of 60, right? And now, with the current market condition changes and the margin pressure also that we are seeing, so what sort of rule we are committed to as we speak now?

Deepak, that's a good question. In fact, I was pretty vocal on the CNBC also, when I was there on the last time. So this is a -- this rule of 40, that's where most of the SaaS companies, successful SaaS companies do operate at a rule of 40. But we have been operating at almost 59% to 60% last year. Our intent is to operate at 60. But we had a bit of a headwinds in Q1. We don't want to shy away. Our target is to go back to our targets. So I cannot really comment right now. But we are very cautious about rule 40 and 60.

Okay. So our target is to go back to rule of 60, right? That's what you're saying?

Absolutely. So all I said was like in biggest, if you look at -- Deepak, if you look at biggest SaaS companies in the world, okay, they operate at rule of 40, okay, right? But we have been operating at the better levels. We crossed 40s and we crossed 50s and we have always got close to rule of 60. So definitely since we are going to be the platform company, definitely we are very cautious about rule of 40. And we definitely would like to stick to that. Our intent is to stick to rule of 40, though we are operating at rule of 60. So I'm not giving you any guidance, whether it is rule of 40 or 60, but we are very cautious about rule of 40 and 60.

[Operator Instructions] Ladies and gentlemen, due to paucity of time, that would be our last question for today. I'll now hand the conference over to Ms. Ritu Mehta for closing comments. Thank you and over to you.

Thank you, everyone. That was the last question for today. In case we couldn't take your question due to time constraints, please feel free to reach out to Investor Relations team. Have a good evening.

Thank you.

Thank you very much. Ladies and gentlemen, on behalf of Tanla Platforms Limited, that concludes this conference. Thank you all for joining us and you may now disconnect your lines.