Tanla Platforms on Friday informed that its board will meet next week on Thursday, September 8, 2022 to consider the proposal of share buyback of the company. Shares of Tanla Platforms jumped more than 4% to ₹752 apiece on the BSE in afternoon deals after the buyback proposal announcement.
“This is to inform you that the Board of Directors of the Company will consider a proposal for buyback of Equity Shares of the Company including matters related/ incidental thereto, at its meeting which is scheduled to be held on Thursday, September 08, 2022,” Tanla Platforms said in an exchange filing today.
A share buyback, also known as share repurchase, is a corporate action to buy back its own outstanding shares from its existing shareholders usually at a premium to the prevailing market price. It can be an alternative tax-efficient way to return money to shareholders. Share buybacks reduce the number of shares in circulation, which can increase the share value and the earnings per share (EPS).
Hyderabad-based Tanla Platforms provides provides value-added services in the cloud communications space. Tanla Platforms shares have declined more than 59% in 2022 (YTD) so far, and is down 17% in a year’s period. However, in the past five years, the stock has given multibagger return of more than 2,020%.
The company reported a decline in Q1 net profit, both on sequential and annual basis. Its net profit in the quarter ended June 30, 2022 (Q1FY23) fell to ₹100 crore as compared to ₹140 crore in the March quarter. Tanla Platform’s revenue was 27.7% year-on-year (YoY) however, was down 6.2% from the last quarter (Q4FY22). EBITDA margin decreased 530 bps YoY to 16.3%.
Meanwhile, the company’s enterprise business had 16% gross margin vs 23% in Q4FY22 whereas Platform business had 96% gross margin compared 95% in the previous quarter of March 2022.
“Q1 had some operational headwinds in the Enterprise business, but we have our building blocks in place to accelerate our momentum in the coming quarters. We have a strong balance sheet and excited by the opportunities ahead of us,” founder Chairman & chief executive officer (CEO), Uday Reddy had said in a letter to shareholders.
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