Tanla Platforms shares hit 20% upper circuit; time to book profit or more upside possible?

Tanla Platforms Ltd shares gained strong momentum in Wednesday's trade. The stock soared 20 per cent to hit its upper price band of Rs 1,110.50 over a previous close of Rs 925.45. Considering today's high price of Rs 1,110.50, the scrip was down 15.72 per cent from its one-year high price of Rs 1,317.70, a level seen on July 24 this year. That said, the multibagger counter has gained 119.42 per cent from its 52-week low of Rs 506.10, hit on March 27, 2023.

The stock was last seen trading 18.52 per cent higher at Rs 1,096.85. Tanla saw heavy trading volumes today on BSE as 12.87 lakh shares changed hands. The figure was way more than the two-week average volume of 32,000 shares. Turnover on the counter came at Rs 136.01 crore, commanding a market capitalisation (m-cap) of Rs 14,709.91 crore. There were 33,352 sell orders against buy orders of 32,621 shares.

"The company has recorded a good growth over the years. Tanla's profitability path also looked decent. The stock has corrected sharply from one-year high level. It has indicated a bounce back today," said AK Prabhakar, Head of Capital, IDBI Capital.

Tanla recorded a 29 per cent rise in its profit, at Rs 143 crore, for the July-September quarter (Q2 FY24) as against Rs 110 crore in the year-ago period. It posted a 19 per cent year-on-year (YoY) jump in revenue at Rs 1,009 crore.

On technical setup, support on the counter could be seen around Rs 1,000. On the higher side, a decisive close above Rs 1,120 is required for a further upside. An analyst suggested booking profit at current levels.

"Support will be at Rs 1,000 and resistance may be seen around Rs 1,120. Expected trading range could be between Rs 900 and Rs 1,200 for next couple of months," said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers.

"Tanla Platforms is overbought and bullish on daily charts with next resistance at Rs 1,120. Investors should book profits at current levels as a daily close below support of Rs 1,003 could lead to target of Rs 900 in the near term," said AR Ramachandran from Tips2trades.

The counter was trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150- and 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 80.62. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 121.26 against a price-to-book (P/B) value of 21.30.

The scrip has an analyst target price of Rs 1,295, Trendlyne data showed, suggesting a potential upside of 18 per cent in a year. It has a one-year beta of 1, indicating average volatility on the counter.

The company (formerly known as Tanla Solutions) offers an application-to-person service (A2P) messaging platform globally. Its range of services includes product development and implementation in the wireless telephony industry, aggregator services and offshore development services.

As of September 2023, promoters held 44.16 per cent stake in the company.

(Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.)

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