Tanla : Q4 FY 2017 Investor Update

For the year ended 31 Mar 2017

May 18th, 2017

Investor Call:

The Investor call to discuss the financial results for quarter and full year ended March 31, 2017, will be held at

12.00 noon IST on Friday, May 19, 2017. Dial-in details are as follows:

Tanla Solutions announces AFR for Quarter and Full Year ended March 31st 2017

Tanla Solutions Limited (BSE: 52790, NSE: TANLA), the largest provider of A2P Messaging globally , announced its financial results according to Ind-AS for the quarter and full-year ended March 31, 2017.

Key Metrics:

Revenue from A2P Messaging

R(Cr)

Revenue from Mobile Payments

R(Cr)

Property Income

R(Cr)

123

92

145

159

4

18 11

6 7 5 5

2

Q1 Q2 Q3 Q4

Q1 Q2 Q3 Q4

Q1 Q2 Q3 Q4

FY 16 Segment revenue breakup

R(Cr)

FY 17 Segment revenue breakup

R(Cr)

3% 4%

6%

19%

A2P Messaging A2PMessaging

Mobile Payments Mobile Payments

Other Income OtherIncome

Business Highlights in FY 17:

Won the contract to implement SMS hub platform for a leading Telecom operator in India. This platform shall be a global hub for terminating A2P & origination and termination of P2P messages for India and global destinations. This hub is being deployed under a fully managed services model.

The first phase of Tanla's Cloud Communication platform went live, experienced a good traction in terms of quality of service, as evidenced by appreciation received from large clients.

Deployed a dedicated SMSC for OTP traffic with Vodafone, the first of its kind in India, for delivery of mission critical messages.

Contract signed with LinkedIn for terminating International messages into India from the Singapore hub. Signed up with a leading telecom operator in India for deployment of A2P Messaging Platform.

Agreements have been executed with a major social media network and a leading OTT player in Asia.

Partnered with a leading telecom operator in India for processing messages terminating into India and its global hub for provision of international A2P messaging services globally.

Executed agreements with 2 large domestic mobile operators for domestic A2P messaging.

Management Commentary:

Commenting on the announcement of the annual results for the year ended March 31, 2017, Uday Reddy, Chairman and Managing Director,said:

"I am very pleased to present to you an outstanding FY17 performance, where we have surpassed even our own expectations not

only on the financial aspect but also strategy-wise.

We believe we have demonstrated our ability to monetise our A2P platform gainfully on the back of the technical acumen of our team, our experience in managing large deployments and the long-standing partnerships we enjoy with telecom

companies. Enthused by the success of the model domestically we wish to translate these capabilities to countries outside of India.

We have seen good traction in cloud communication service on voice platform, where the first phase went live during FY17. Building on the momentum seen in India we are confident of being able to replicate our experience in the markets overseas."

Outlook:

Growth in performance will be backed by capabilities in monetizing deployments across key platform and services. Initiatives to be undertaken during FY18 include;

Monetization of existing agreements with large telecom operators domestically under the A2P messaging platform

Expansion into geographies:

To deploy and monetize A2P platform beyond India

To roll out the cloud communication service on voice platform internationally To address requirements of large international enterprises on global basis

With a strong presence in the cloud communication space on the ground the Company is geared to create a leadership positon for itself in its chosen domains of business worldwide.

With the business being in growth mode any projection of financial results on a Q-o-Q/Y-o-Y basis could see marked variation from the actual outcome. The management would like to therefore refrain from issuing numerical guidance going forward.

Financial Highlights:

Revenue grew by 34% to R 579.3 Crs in FY17 from R 431.5 Crs in FY16 driven by healthy volumes in the domestic as well as international A2P messaging business.

Business Revenue grew to R 556.3 Crs from R 417.5 Crs Y-o-Y, a growth of 33%

EBITDA came in at Rs. 56.10 crore in FY17 as compared to Rs. 65.55 crore in the previous financial year. Earnings are reflective of the change in business mix, incorporating increased contribution from the domestic, high-volume A2P business and also capturing the steadily increasing footprint in international markets.

Net Profit improved by 465% to R 40.9 Crs from R 7.2 Crs Y-o-Y guided by strong operational performance during the year

Earnings Per Share grew by 433% to R 3.81 in FY17 from R 0.71 in FY16

Cash and Cash equivalents improved by 162% to R 133.3 Crs from R 50.9 Crs Y-o-Y

Better collections have resulted in Debtor days being reduced to 72 days in FY17 from 77 days in FY16

Corporate Highlights:

The Board of Directors of Tanla Solutions recommended a final dividend of 25% i.e. R 0.25 per equity share of face value of

R 1/- each, subject to approval of the shareholders in the ensuing Annual General Meeting. Ernst & Young LLP, India, has been appointed as Internal Auditors for FY 17-18.

19,68,310 Equity shares of R 1/- each have been allotted to the Promoters at a premium of R 32.87/- per share, pursuant to conversion of warrants into equity.

2,00,000 options have been granted to the eligible employee(s) under Tanla Solutions Limited Employee Stock Options

Plan 2015.

Mr. Kedarnath Gupte has been appointed as Senior Vice President - International Markets. Kedar comes from Vodafone Group in UK where he focused on wholesale innovation to drive higher margins for Vodafone's Carrier business. He brings with him more than 15 years' experience in the telecommunication industry working across the globe.

Mr. Gautam Sabharwal, Director - Global Business Development, has resigned as a Director from the Company's Board

w.e.f. May 31, 2017. The Board placed on record appreciation for services rendered and guidance provided during his tenure as Director on the Board.