Tanla Platforms Ltd Management Discussions

Management Discussion & Analysis

Global Economy

The global economy navigated a challenging yet stabilizing phase in calendar year (CY 24), posting a GDP growth of 3.1% in 2024, with expectations of 3.2% in 2025. While growth remained below historical averages, key macro indicators such as inflation, interest rates, and trade flows showed signs of normalization, fostering cautious optimism across global markets.

United States remained a bright spot among developed economies with resilient consumer demand. The Federal Reserves shift from a restrictive to neutral policy stance reflected moderating inflation and improved macro stability. Europe continued to face structural headwinds. Chinas economy has been grappling with slower growth and weak consumer demand, while recent stimulus measures aim to stabilize the economy.

Amid these regional dynamics, several global themes emerged. Disinflation became a synchronized trend, allowing central banks in both advanced and emerging markets to gradually transition toward more accommodative policy stances. Trade activity showed initial signs of revival, though it continued to be influenced by ongoing geopolitical tensions, particularly between the U.S. and China, which affected global supply chains and capital flows. Tariffs imposed by the U.S. and other countries have raised costs for Chinese exporters, disrupted supply chains, and added uncertainty for businesses trying to recover momentum.

Despite the return to relative macroeconomic balance, the outlook remained tempered by persistent and evolving risks. Heightened geopolitical uncertainty, demographic transitions, climate-linked economic disruptions, and financial market volatility continued to pose significant challenges. Within this context, emerging markets displayed uneven performance, shaped by capital flow volatility, currency pressures, and limited fiscal space to stimulate growth.

As the global economy progresses through2025, the trajectory appears cautiously positive, anchored by macroeconomic stabilization, but contingent on the ability of economies to navigate structural reforms, manage external shocks, and leverage new growth drivers in an increasingly complex global environment.

The Indian Economy

The Indian economy demonstrated remarkable resilience during FY25, registering a GDP growth of 6.4-6.5% despite challenging global conditions. This performance positioned India among the fastest-growing major economies worldwide, with particularly strong momentum in the final quarter (74% growth in January- March 2025).

The economys growth was driven by robust domestic consumption, sustained investment activity, and continued government focus on infrastructure development. The manufacturing sector benefited significantly from Production Linked Incentive schemes of the government, while the services sector maintained steady expansion despite global headwinds.

The Reserve Bank of India adopted a calibrated monetary policy approach throughout the fiscal year. After maintaining elevated interest rates to combat inflation, the central bank shifted to an accommodative stance in the latter half. This policy recalibration supported economic growth while successfully maintaining inflation within the target range of 4-5%.

While the economic indicators remained strong, the year presented several challenges including global economic uncertainty, employment quality concerns, and periodic supply-side pressures on food prices. However, these were effectively managed through proactive policy interventions and the economys inherent resilience.

The governments continued emphasis on infrastructure development, digital transformation, and manufacturing competitiveness through various policy initiatives provided a solid foundation for sustainable growth.

Looking ahead, the Economic Survey, projects GDP growth of 6.3-6.8% for FY26, with the economy expected to stabilize around 6.5% in the medium term. This trajectory, supported by ongoing structural reforms and strategic investments in infrastructure, technology, and skill development, positions India favorably for sustained economic expansion.

Business Overview

The digital communication and interaction landscape is undergoing a fundamental shift, from multichannel engagement to Al-native, outcome-driven experiences. Enterprises across industries increasingly recognize that their competitive edge lies in delivering seamless, personalized, and secure digital journeys. This accelerated the adoption of omni-channel customer experiences that are not just scalable, but also intelligent and compliant by design. Customer expectations are evolving rapidly. Real-time communication, privacy- first engagement, and hyper-personalized interactions are now table stakes. At the same time, enterprises are navigating macroeconomic pressures, regulatory developments, and the need to do more with less.

We are driven by our purpose - empowering consumers and enabling companies. In doing so, we play a role in every part of the digital interaction value chain - authentication, acquisition, engagement, user protection (anti-spam, anti-scam), customer experience, and retention. As a result, we have uniquely strong solutions in two key segments user.ai (No Spam, No Scam) and enterprise.ai (RoI for authentication, customer experience and growth marketing solutions).

Structural Growth Drivers

Demand is influenced by several structural trends and shifts in the ways businesses, customers, and people interact and communicate. We see a few global trends across the world of digital interactions.

Everything becomes Conversational

The explosion of channels vying for user attention is driving the need for robust omnichannel platforms. OTT channels like WhatsApp, RCS and others, are enabling rich, two-way conversations. These channels support multimedia content, payments, and app-like experiences directly in the chat window. Conversational commerce is growing, with customers able to complete entire transactions, from product discovery to payment, within a single chat window.

Omnichannel Experience

Cloud-based models with zero capital expenditure and flexible, pay-as-you-go pricing are rapidly gaining momentum. This shift is accelerating the adoption of advanced services such as Customer Data Platforms (CDPs), which increasingly leverage blockchain and AI/ML technologies. Enterprises are seeking unified platforms with multiple APIs to enable seamless engagement across multiple channels. As businesses embrace new communication touchpoints and implement cross-channel marketing automation, the demand for comprehensive end-to-end (E2E) solutions has become essential to ensure consistency, efficiency, and scalability in customer engagement.

AI-Enabled Communication

Al is now a core part of digital communication strategy, with intelligent automation being integrated into communication workflows. Conversational AI, including smart chatbots and voice assistants, handles routine queries, freeing human for more complex tasks.

Generative Al tools are revolutionizing chatbots, making them more intelligent and capable of understanding natural language, emojis, and even processing payments or scheduling deliveries within chat interfaces.

Digital Trust and Compliance

The importance of consent, transparency, protection, and user control is becoming increasingly pronounced, as data privacy and security take center stage globally. Businesses are under growing pressure to comply with stringent regulations and ensure that user data is managed responsibly, with robust safeguards against breaches while preserving both user trust and regulatory compliance.

Result of Operations

At a Glance

Revenue grew by 2.5% YoY to Rs.4,028 Cr Gross profit de-grew by 0.5% YoY to f1,051 Cr. Gross margin was at 26.1%,decreased by 80 basis points EBITDA de-grew by 5.7% YoY to f691 Cr. EBITDA margin was at 17.2%, decreased by 149 basis points Profit after tax de-grew by 7.5% YoY to f507 Cr. PAT margin was at 12.6%, decreased by 136 basis points Earnings per share was at f37.76 Free cash flow was at f514 Cr

The Consolidated financial statements of the Group have been prepared in accordance with Indian Accounting Standards ("Ind AS") as notified under Section 133 of the Companies Act, 2013 (the "Act") read with Rule 3 of the Companies (Indian Accounting Standards) Rules 2015 as amended, issued by Ministry of Corporate Affairs (MCA). Accounting policies have been consistently applied to all the years presented except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

Consolidated Profit & Loss Account

	Year ended March 31
In f Cr unless otherwise stated	FY25	FY24	Change %
Revenue from operations	4,028	3,928	2.5
Cost of services	(2,977)	(2,872)	3.7
Gross profit	1,051	1,056	(0.5)
Gross Margin	26.1%	26.9%	(80 bps)
Operating expenses
Total operating expenses	(360)	(324)	11.2
EBITDA	691	732	(5.7)
EBITDA margin	17.2%	18.6%	(149 bps)
Depreciation and amortization	(98)	(85)	15.3
EBIT	593	647	(8.3)
EBIT margin	14.7%	16.5%	(175 bps)
Finance cost	(6)	(6)	(3.6)
Other income	40	43	(7.0)
Profit before tax	627	683	(8.2)
Tax expenses	(120)	(135)	(11.2)
Profit after tax	507	548	(7.5)
PAT Margin	12.6%	14.0%	136 bps
Earnings per share	37.76	40.79	(7.4)

Revenue

Revenues are generated from our Digital Platforms and Enterprise Communications businesses. Digital platforms revenues are recognized based on a revenue-sharing model, wherein earnings are determined as a percentage of the value of transactions processed through mobile carrier networks and other suppliers, at a price agreed as per the contract. Enterprise Communications revenues are recognized based on the volume of transactions processed through our platforms, at a predefined fixed rate per transaction as specified in customer contracts and fixed price contracts.

Revenue grew by 2.5% YoY to f4,028 Cr, driven by OTT channels.

Particulars (In f Cr)	FY25	FY24	Change
Digital Platforms	364	369	(1.3%)
Enterprise Communications	3,664	3,559	2.9%
Total Revenue	4,028	3,928	2.5%

Digital platforms revenue de-grew by 1.3% YoY to Rs.364 Cr. Adjusting for the impact of Vi ILD network exit (~Rs.62 Cr), normalized growth would be 18.4%. The revenue growth was led by Messaging- as- a-Platform (MaaP) for RCS, Wisely ATP, Trubloq and Wisely OTT.

Enterprise communications revenue grew by 2.9% YoY to Rs.3,664 Cr. The growth in enterprise communications was led by exponential growth in OTT channels led by WhatsApp and RCS. We are scaling our RCS business and delivered ~ 9 Bn messages during the year. WhatsApp revenue grew by 78% in FY25. SMS business saw a decline due to softness in international messaging business (ILD) and a shift of volumes to OTT channels

We had heathy additions to our customer base in FY25, adding 398 new customers, which contributed Rs.70 Cr. 39% of these new additions were on OTT channels (WhatsApp and RCS).

Customer Segmentation

Customer Segment	FY25		FY24
(In f Cr)	Count	Revenue	Count	Revenue
>50 Cr	19	1,679	21	1,707
>10 Cr - <50 Cr	59	1,267	61	1,263
>1 Cr - <10 Cr	272	876	241	767
Total	350	3,822	323	3,736

Cost of Services

The cost of services consists of the service transaction fee paid to mobile carriers and other suppliers.

Particulars (In f Cr)	FY25	FY24	Change
Cost of services	2,977	2,872	3.7%

Cost of services grew by 3.7% YoY to f2,977 Cr, led by volume growth. The cost of services is primarily associated with the enterprise communications, as it is minimal for the digital platforms business.

Gross Profit

Gross profit is calculated as revenue less the cost of services.

Particulars (In f Cr)	FY25	Gross Margin	FY24	Gross Margin	Change
Platform Business	360	98.7%	360	97.6%	(0.2%)
Enterprise Business	691	18.9%	696	19.6%	(0.6%)
Total	1,051	26.1%	1,056	26.9%	(0.5%)

Gross profit de-grew by 0.5% YoY to Rs.1,051 Cr in FY25. Digital platforms gross profit remained flat at Rs.360 Cr, even after the loss of Vi ILD network deal. Enterprise communications gross profit de-grew by 0.6% to Rs.691 Cr, primarily due to reduced average price realization in SMS and increased contribution from channels with a lower gross margin profile.

EBITDA

EBITDA de-grew by 5.7% YoY at f691 Cr. The EBITDA margin decreased by 149 basis points YoY to 17.2%. In FY25, our indirect expenses increased by 11.2% YoY to f360 Cr. Indirect costs were 8.9% of revenue and 34.3% of gross profit in FY25. Indirect cost was also higher on YoY basis due to full cost of ValueFirst integration. (ValueFirst got integrated in Q2 FY24).

Particulars (In f Cr)	FY25	FY24	Change
Gross profit	1,051	1,056	(0.5%)
Employee cost	(216)	(169)	27.8%
Cloud and hosting Other expenses	(33) (111)	(25) (130)	32.0% (14.6%)
Operating profit - EBITDA	691	732	(5.7%)
EBITDA/Gross Profit Conversion	65.7%	69.3%	(360 bps)

Expenses Breakup

Particulars (In f Cr)	FY25	FY24	Change
Employee cost	216	169	27.8%
Cloud and data center hosting charges	33	25	32.0%
Marketing expenses	19	31	(38.7%)
Professional charges	13	22	(40.9%)
Corproate Social Responsibility	13	10	30.0%
Travelling expenses	16	16	0.0%
Other expenses	31	25	24.0%
Allowance for doubtful debts	3	4	(25.0%)
Rent, rates, & taxes	5	7	(16.7%)
Office maintenance	8	8	0.0%
Foreign exchanage fluctuation	2	6	(66.7%)
Advertisement expense	1	1	0.0%
Total	360	324	11.2%

Detailed variance analysis is explained below

Employee Cost

Particulars (In f Cr)	FY25	FY24	Change
Salaries and wages	188	148	26.6%
Employee stock option cost	10	8	(23.0%)
Contribution to provident and other funds	7	8	(12.5%)
Staff welfare expenses	11	5	120.0%
Total	216	169	27.8%

Employee cost was 5.4% of revenue in FY25, as compared to 4.3% in FY24. Employee costs increased due to salary increments, new hires, and grant of performance-linked RSUs. Our hiring efforts were focused primarily on expanding capabilities in AI/ML, product development, and GTM.

A summary of all the restricted stock unit (RSU) activity and related information for the year ending March 31, 2025:

Particulars	No of RSUs
Opening balance as on April 01, 2024	2,47,497
RSUs granted	2,18,604
RSUs vested	-
RSUs exercised	1,57,499
RSUs lapsed	40,000
Balance as on March 31, 2025	2,68,601

Cloud and Data Center Hosting

Particulars (In Rs. Cr)	FY25	FY24	Change
Data center and hosting charges	29	16	85.2%
Internet and cloud computing charges	4	9	(53.3%)
Total	33	25	32.0%

Cloud and data center hosting charges grew by 32.0% YoY to Rs.33 Cr. We have scaled our infrastructure to support the expansion of the OTT business, leading to an increase in hosting expenses.

Other Indirect Expenses

Particulars (In Rs. Cr)	FY25	FY24	Change
Marketing expenses	19	31	(38.7%)
Travelling expenses	16	16	-
Professional charges	13	22	(40.9%)
Corporate Social Responsibility (CSR)	13	10	(30.0%)
Office maintenance	8	8	-
Rent, rates & taxes	5	7	(16.7%)
Allowance for doubtful debts	3	4	(25.0%)
Foreign exchange fluctuation	2	6	(66.7%)
Advertisement expense	1	1	-
Other expenses	31	25	24.0%
Total	111	130	(14.6%)

Other indirect expenses de-grew by 14.6% YoY to Rs.111 Cr. Indirect expense is 2.8% of revenue in FY25.

Depreciation and Amortization

Fixed assets, including IT assets, are depreciated over their estimated useful lives using the straight-line method. Intangible assets, recognized at the time of acquisition based on the purchase price allocation methodology, are amortized over their estimated useful lives using the straight-line method. The right-of-use asset, representing leased assets such as office premises, is depreciated over its useful life.

Particulars (In Rs. Cr)	FY25	FY24
Amortization on platforms	29	21
Amortization on customer relationship	7	17
Amortization on trade name	2	1
Amortization on technology	3	2
Amortization on non-compete	5	4
Depreciation on right-of-use assets	13	10
Depreciation on tangible assets	39	30
Total Depreciation	98	85

Depreciation and amortization increased by 15.3% YoY to Rs.98 Cr. The increase in amortization can be primarily attributed to the capitalization of MaaP platform that went live during the year.

Other Income

Investments can include liquid funds such as fixed deposits or term deposits with banks, housing finance companies, liquid mutual funds and other savings schemes. Additionally, we may invest in securities and bonds issued by the central government, provided they have a minimum rating of "AAA."

Our cash, cash equivalents, and current investments, in the form of fixed deposits and liquid mutual funds are predominantly held in both Indian Rupees ( Rs.) and U.S. dollars (USD).

Particulars (In f Cr)	FY25	FY24
Interest income on deposits	35	18
Interest on income tax refunds	4	1
Miscellaneous income	1	24
Total	40	43

We generated an average interest yield of 6.5% in FY25. Other income also includes interest received on income tax refund of f4 Cr. Refer to cash, cash equivalent section for more details.

Profit after Tax (PAT)

Particulars (In f Cr)	FY25	FY24
Profit before tax	627	683
Tax expense	(120)	(135)
Profit after tax	507	548
Profit after tax margin	12.6%	14.0%
Effective tax rate	19.1%	19.8%

Profit after tax de-grew by 7.5% YoY at f507 Cr. Profit after tax margin decreased by 136 basis points YoY to 12.6%.

Earnings per Share

Earnings per share de-grew by 7.4% to f37.76 in FY25, primarily due to a reduction in absolute profitability.

Particulars (In f Cr)	FY25	FY24
Profit after tax	507	548
Weighted-average basic shares outstanding	13,43,43,300	13,44,35,225
Effect of dilutive shares	2,68,285	2,47,250
Weighted-average diluted shares outstanding	13,46,11,585	13,46,82,475
Basic earnings per share	37.76	40.79
Diluted earnings per share	37.68	40.71

Consolidated Balance Sheet

In f Cr, unless otherwise stated	FY25	FY24
Non-current assets
Property, plant and equipment	229	206
Platforms	138	99
Customer relationships	24	31
Brands	2	3
Technology	26	31
Non-Compete	1	2
Intangible assets underdevelopment	85	78
Goodwill	265	265
Capital work in progress	5	23
Right-of-use-lease assets	52	67
Financial assets	27	33
Deferred tax assets (net)	46	39
Other non-current assets	83	94
Total non-current assets	985	971
Trade receivables	838	842
Cash and bank balances	881	667
Investments	120	-
Other Financial assets	485	503
Other current assets	29	26
Total current assets	2,353	2,038
Total Assets	3,338	3,009
Equity and liabilities
Equity share capital	13	13
Other equity	2,255	1,929
Total equity	2,268	1,942
Financial liabilities
Lease liabilities	48	59
Other financial liabilities	-	-
Provisions	3	2
Other non-current liabilities	2	1
Total non-current liabilities	53	62
Current liabilities
Trade payables	575	693
Lease liabilities	16	16
Other financial liabilities	357	263
Other current liabilities	25	17
Short term provisions	14	8
Liabilities for current tax (net)	30	8
Total current liabilities	1,017	1,005
Total equity and liabilities	3,338	3,009

Equity and Liabilities

Tanla has only one class of shares - equity shares at par value of Rs.1 each. The authorized share capital of the Company is 20,00,00,000 equity shares. at a par value of Rs.1 each. As on March 31, 2025, paid-up share capital at Rs.13.46 Cr, compared to Rs.13.45 Cr as of March 31, 2024.

Equity share movement is detailed below:

	As on FY25		As on FY24
Particulars	No. of Shares	(In Rs.)	No. of Shares	(In Rs.)
Shares outstanding at the beginning of the year	13,44,59,860	13,44,59,860	13,44,00,357	13,44,00,357
Add: Issued and allotted during the year	1,57,499	1,57,499	59,503	59,503
Less: Shares bought back during the year	-	-	-	-
Shares outstanding at the end of the year	13,46,17,359	13,46,17,359	13,44,59,860	13,44,59,860

Reserve & Surplus

Particulars (In f Cr)	FY25	FY24
Capital reserve	7	7
Capital redemption reserve	2	2
General reserve	26	25
Securities premium reserve	214	222
Employee stock options outstanding account	15	28
Retained earnings	1,951	1,605
Foreign currency translation reserve	46	40
Other items of other comprehensive income	(6)	(1)
Total	2,255	1,928

The securities premium reserve decreased by f8 Cr to Rs.214 Cr as of March 31, 2025, primarily due to purchase of shares by Tanla ESOP Trust from the market.

The employee stock options outstanding decreased by Rs.13 Cr to Rs.15 Cr as of March 31, 2025, mainly due to the issuance of Restricted Stock Units (RSUs) during the year. For further details, refer to the employee cost section for RSU movement.

The movement in retained earnings reflects a profit of Rs.507 Cr generated during the year, offset by a dividend payment of Rs.161 Cr to shareholders.

Lease Liabilities

As per Ind-AS 116 on lease accounting, leased assets recognition as assets and liabilities is mandated in the lessees financial records. Accordingly, the asset and liability associated with leased office premises of the group companies have been determined and presented within non-current and current assets/liabilities. This classification pertains to values anticipated to occur after one year and within one year, respectively.

Provisions

Provisions represent liabilities accrued for leave encashment (f5 Cr) and gratuity (f13 Cr) payable to employees on retirement, resignation, or superannuation, quantified and charged to expenses at the end of reporting period.

Gratuity liability is managed through a policy held with Life Insurance Corporation of India, to cover the liability as and when the claim arise. Leave encashment represents the accrued liability in accordance with our leave policy, which becomes payable to employees upon retirement, resignation, or superannuation. Both gratuity and leave encashment are accrued based on independent actuarial valuation reports.

Other Non-Current Liabilities

Other non-current liabilities consists of security deposits received from customers.

Trade Payables

Trade payables primarily comprise amounts payable for cost of services (to mobile carriers) and other suppliers. As of March 31, 2025, trade payables were f575 Cr, compared to f693 Cr as of March 31, 2024.

Other Financial Liabilities

Other financial liabilities consists of cost of services not yet billed to the company, payable to capital creditors, unclaimed dividend, amount payable towards corporate social responsibility expenditure and other financial liabilities.

An amount of Rs.1 Cr is held within the unclaimed dividend account, representing unpaid dividends to shareholders over the years due to various reasons.

Tanla has instituted appropriate oversight mechanisms through its registrar and secretarial team to manage this liability. In accordance with regulatory requirements, any unclaimed dividend remaining unpaid for seven years from the date of declaration is transferred to the Investor Education and Protection Fund (IEPF) maintained by the central government.

Other Current Liabilities

Other current liabilities consist of statutory liabilities, payable towards GST and TDS. These liabilities are settled with government authorities on a monthly schedule, adhering to specified due dates.

Liabilities for Current Tax

Current tax liabilities were at Rs. 30 Cr as at March 31, 2025 as against Rs. 8 Cr as at March 31, 2024.

Property, Plant and Equipment

Particulars (In fCr)	FY25	FY24
Land	21	21
Buildings	11	11
Leasehold Improvements	57	56
Furniture	27	32
Computers	107	79
Office Equipment	5	5
Vehicles	1	1
Total	229	205

The increase in the carrying cost of PPE reflects our continued investments in infrastructure hardware to strengthen platform performance and scale for growth.

Intangible Assets and Intangible Assets Under Development

The net carrying value of intangible assets is Rs.192 Cr as of March 31, 2025. The increase in the net carrying cost during the year was primarily due to the capitalization of the Messaging-as-a-Platform (MaaP) for RCS.

Intangible assets under development (IAUD) represent platforms and software currently being developed internally. The associated cost includes salaries, and professional consultancy charges attributable to platform development. As of March 31, 2025, IAUD is Rs.85 Cr.

(In f Cr, unless otherwise stated)	FY25	FY24
Platforms	138	96
Customer relationships	24	31
Trade name	2	3
Technology	7	11
Non-compete	1	2
Software	19	20
Total	192	163

Goodwill

Goodwill represents an excess of purchase consideration over the net book value of assets acquired from the subsidiary companies at the time of investment. Goodwill arising from consolidation and acquisition is not amortized but is tested annually for impairment, and any impairment losses, if identified or recognized. The net carrying amount of goodwill is f265 Cr.

Goodwill (In Rs. Cr, unless otherwise stated)	Karix	Gamooga	ValueFirst	Total	Useful life	Impairment/ Amortization	Net Carrying Value
Goodwill	160	25	129	313	-	49	265

Capital Work in Progress

Capital work in progress represent on-going work towards leased offices.

Other Financial Assets

Particulars (In Rs. Cr)	FY25	FY24
EMD deposits	6	6
Rental deposits	6	6
Other deposits	7	7
Bank deposits with more than twelve months maturity	8	14
Total	27	33

EMD deposits represent security deposits submitted to customers as part of the bidding process for tenders. These deposits are primarily associated with contracts involving PSUs and government agencies.

Deferred Tax Asset

Deferred tax arises on account of the timing differences in depreciation charge between the Income Tax Act and Companies Act and is subsequently reversed in future periods. During the year, deferred tax assets increased by f6 Cr due to the reversal of timing differences on depreciation of assets.

Other Non-Current Assets

Particulars (In f Cr)	FY25	FY24
Income tax asset- TDS receivable	82	93
Capital advances	1	1
Total	83	94

Income tax asset will be offset against subsequent years income tax payable.

Trade Receivables

Trade receivables stood at Rs.838 Cr as of March 31, 2025, with 1% of these receivables remaining outstanding for more than 365 days.

Cash & Cash Equivalents

Cash, cash equivalents stood at f1,009 Cr for the year ended March 31, 2025, Cash, cash equivalents composition is given below.

Particulars (In f Cr)	FY25	FY24
Restricted cash	56	54
Current account - Rs.	40	12
Current account - USD	81	95
Fixed deposits	704	506
Fixed deposits with maturity period greater than twelve months and liquid classified under non-current assets	8	14
Liquid investments	120	-
Total	1,009	681

Restricted cash are held as margin money deposits given for bank guarantees and cash credit limits. The increase in restricted cash is attributed to the issuance of bank guarantees for new contracts and participation in RFP. Cash balance in overseas accounts decreased due to working capital investments made towards strategic partnership. Investments in fixed deposits is in line with our investment policy. Independent bank balance confirmation for 100% of cash and investments are obtained by our statutory auditors.

Other Current Financial Assets

Particulars (In f Cr)	FY25	FY24
Accrued income	447	478
Interest receivable	24	11
Other receivable	14	14
Total	485	503

Accrued income represents revenue that has been accrued but not yet billed at the end of each month. This is a common industry practice where invoicing occurs in the following month after reconciliation. Accrued income for FY25 is at 11% of revenue.

Interest receivable represents the interest that has been accrued on fixed deposits but has not yet been credited to the deposit account by the banks and is recognized under other financial assets.

Other Current Assets

Particulars (In f Cr)	FY25	FY24
Advances recoverable in cash or kind	29	26
Total	29	26

The balances with revenue authorities represents tax deducted at source (TDS), which is adjusted against subsequent tax dues or refunded with interest on completion of tax assessments.

Liquidity Management

The primary source of our cash, cash equivalents and current investments is the funds generated from our operational activities. Over the years, these funds have been prudently utilized to support core business operations, drive capital expenditure in line with our growth strategy, and return value to shareholders through dividends and share buybacks.

As on March 31, 2025, our cash, cash equivalents, and current investments including fixed deposits and liquid funds were predominantly held in Indian Rupees and U.S. dollars. In line with treasury policy, we invest only in instruments rated "AAA" or equivalent.

We are a debt-free company with adequate working capital to meet all operational requirements. Further, we maintain access to additional liquidity through sanctioned credit facilities, ensuring readiness to respond to strategic or operational needs.

Analysis of Consolidated Statement of Cash Flow

Particulars (In f Cr)	FY25	FY24
Net cash flow from operating activities	642	590
Net cash flow from investing activities	(220)	(528)
Net cash flow from financing activities	(208)	(151)
Net increase in cash, cash equivalents	214	(89)
Cash, cash equivalents at the beginning of the year	681	712
Cash acquired on ValueFirst Acquisition	-	51
Forex fluctuations	-	(6)
Cash, cash equivalents at the end of the year	895	667
Fixed deposits with maturity period greater than 12 months classified under non-current assets	(6)	14
Investments in liquid funds	120	-
Cash, cash equivalents	1,009	681

Cash flow from operating activities for the year ended March 31, 2025, was Rs.642 Cr. Our operating cash flows have increased in FY25 as compared to FY24, primarily due to changes in working capital and taxes payouts.

Cash used in investing activities for the year ended March 31, 2025, was Rs.220 Cr. The cash was primarily utilized for capital investments related to development of platforms, hardware infrastructure upgrades to enhance platform performance and scalability. In FY25, we generated f514 Cr in free cash flow, representing 101% of PAT.

Particulars (In f Cr)	FY25	FY24
Operating cash flow	642	590
Capital expenditure	(128)	159
Free cash flow	514	431

Cash used in financing activities for the year ended March 31, 2025, was at Rs.208 Cr, primarily utilized for dividend payouts to shareholders in line with our dividend payout policy. Total dividend payout for the year was Rs.161 Cr.

Cash Flow Movement

Note: Cash balances include fixed deposits with maturity greater than twelve months classified under non-current assets and liquid investments.

Financial Ratios

Following are ratios for the current financial year and their comparison with the preceding financial year, along with explanations where the change has been 25% or more.

Ratio description	FY25	FY24	Change %	Explanation
Current ratio	2.31	2.03	14.2	NA
Return on equity ratio	26.8%	31.7%	(15.5)	NA
Trade receivables turnover ratio	4.79	5.56	(13.8)	NA
Trade payable turnover ratio	5.26	5.19	1.5	NA
Net capital turnover ratio	3.01	3.8	(20.8)	NA
Net profit ratio	12.6%	14.0%	(9.8)	NA
Return on capital employed	26.1%	33.3%	(21.5)	NA

Internal Controls and Adequacy

The primary objective of the internal control system over financial reporting is to provide reasonable assurance that the financial statements are reliable and in alignment with generally accepted principles and regulations.

The framework of internal financial controls meets the requirement of the Companies Act 2013. The Internal Control - Integrated Framework (the 2013 framework) is intended to increase transparency and accountability in an organizations process of designing and implementing a system of internal control. The framework requires a company to identify and analyze risks and manage appropriate responses.

Internal financial control systems include the design, implementation and maintenance of adequate internal financial controls that are operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

We have defined and implemented internal controls across the entirety of the value chain, with a focus on addressing individual processes and subprocesses. This concerted effort is undertaken to ensure that internal controls are aligned with the strategic, operational, financial and compliance objectives of the company.

An independent evaluation of the effectiveness of these internal financial controls was conducted by an external consultant. The findings of this assessment were reviewed by the management and subsequently presented to the Audit Committee for deliberation.

The statutory auditors, M/s MSKA & Associates, have audited the financial statements included in this Integrated Report and have issued an attestation report on the companys internal financial controls over financial reporting, as required under Section 143 of the Companies Act, 2013.

Since FY20, M/s Deloitte Touche Tohmastu India LLP has been serving as the internal audit and will continue to remain internal auditors for FY26. The internal audit is carried out in accordance with the internal audit plan, which is subject to annual evaluation in consultation with the statutory auditor and is approved by the Audit Committee. The internal audit process is designed to review the adequacy of internal controls with significant coverage of all areas of the companys operations.

The Audit Committee reviews internal audit reports submitted by the internal auditors. The progress of implementing suggested corrective actions is monitored through the review of the action taken tracker. The Audit Committee also engages in discussions with the statutory auditors to obtain their assessments of the adequacy of the internal control systems.

Based on its evaluation (as defined in section 177 of Companies Act 2013 and Regulation 18 of SEBI LODR Regulations 2015), the Audit Committee has concluded that as of March 31, 2025, the companys internal financial controls were adequate and operating effectively.

Risk Management

Our approach to risk management involves identifying, assessing, and addressing risks to safeguard operations and strategic goals. Our framework covers market dynamics, technological shifts, regulatory changes, and cybersecurity threats. Our innovative risk-based action matrix prioritizes high-risk areas for focused attention. For more details refer to Risk Management in the Integrated Report FY25.

People

At Tanla, people remain at the heart of our purpose and progress. In FY25, we continued to shape a future-ready workforce through our 3Cs framework-Capability, Competency, and Culture, the cornerstone of our talent strategy.

This framework enabled us to assess, develop, and align talent with business priorities, while fostering an environment of continuous growth, agility, and performance.

We introduced the GROW culture-Grit, Reimagine, Onwards Growth, and Win with Customer - to embed the values and behaviors that drive long-term success. This cultural shift is not just aspirational, but operational, influencing how we hire, develop, recognize, and lead.

Our commitment to employee well-being took center stage this year, with enhanced wellness initiatives such as Annual Health check-up, one-on-one in house Doctor consultation, Tanla Goodness Basket, and Mind Over Matter wellness campaign. These initiatives emphasizes our belief that high performance is built on holistic well-being.

We continued to expand learning through structured role-based journeys, capability building in next-gen technologies including Generative AI, and strengthened leadership pipelines through strategic external hiring and internal mobility.

We empower employees through meaningful recognition, equitable opportunities, and a holistic total rewards program that fuels growth and well-being.

We have also embraced a Garage approach to working and collaborate with garage owners to promote continuous learning and drive innovation. By partnering with garage owners, we aim to create a mutually beneficial environment that supports skill development and encourages the creation of innovative workspaces. We also ensure a comprehensive compensation and benefits package that promotes a healthy balance between personal and professional life. For more details refer Human Capital of the Integrated Reporting.

Sustainability

Our commitment to Environmental, Social, and Governance (ESG) practices is deeply embedded in our policies, people, and communities supported. We scored 74 in the S&P Global ESG Scores also commonly known as DJSI scores, up from 68 in 2024. For more details refer Natural and Social Capitals of Integrated Report FY25.

Risk Management

Tanlas risk management framework is built to support decisive action, safeguard critical operations, and strengthen enterprise-wide accountability. It acts as a strategic backbone, enabling the organization to navigate disruption, protect stakeholder value, and maintain continuity across rapidly evolving digital and regulatory landscapes.

We operate in an ecosystem where risks such as - cybersecurity vulnerabilities, platform availability, third-party service dependencies, and regulatory changes all require constant vigilance, which are interconnected. Our Risk Management function systematically identifies, evaluates, and mitigates these risks across the organization.

The framework integrates both structured assessments and real-time monitoring, ensuring that risks are addressed before they escalate. It is embedded into every layer, from platform design and customer experience to vendor management and compliance, enabling timely, informed decision-making.

With strong governance through our Risk Management Committee, defined escalation protocols, and ownership embedded across business units, we continue to strengthen our ability to respond, adapt, and lead with resilience.

Reinforcing Risk Governance through Global Standards

Our Enterprise Risk Management framework is aligned with globally recognized best practices and has been independently validated through a comprehensive audit by the British Standards Institution (BSI). The assessment was conducted for all the group companies in Jan 2025.

This certification affirms maturity, consistency, and enterprise-wide integration of our risk management processes, spanning strategic, operational, compliance, and ESG dimensions. It reflects our structured approach to identifying, assessing, and mitigating risks with rigor and responsiveness.

The ERM framework remains certified by BSI, reinforcing our commitment to high-quality governance, disciplined execution, and proactive risk oversight in an environment where speed, scale, and regulatory clarity are paramount.

By aligning our risk management principles with our strategic priorities, we aim to strengthen institutional accountability, enhance stakeholder confidence, and ensure business continuity in an increasingly complex operating environment.

The following sections outline our governance mechanisms, ERM structure, and key risks identified in FY25, along with the mitigation actions undertaken to safeguard our long-term sustainability.

Risk Management Methodology

Our risk management methodology is anchored in a structured, organization-wide framework designed to manage current exposures and anticipate emerging risks. The approach emphasizes clarity, accountability, and responsiveness at every stage.

Components of Risk Management Methodology

Risk Identification & Assessment	Systematic evaluation of strategic, operational, financial, and compliance risks, with a focus on root causes, likelihood, and potential impact.
Risk Registers	Function-wise and enterprise-level registers that capture risk ownership, severity ratings, mitigation actions, and review cycles.
Risk Response	Defined protocols for mitigation, contingency planning, and issue resolution, aligned with business priorities and risk appetite.
Risk Reporting & Monitoring	Continuous tracking through dashboards and periodic reviews, ensuring real-time visibility and escalation to senior leadership and the Board.

Benefits of Risk Management

Resilience by Design

Strengthens resilience to unforseen events, enabling effective recovery from disruptions

Trust and Transparency

Integrates risk insights into decision-making, reinforcing stakeholder trust and accountability

Strategic Advantage

Transforms risk into opportunity, driving differentiation, informed choices, and long-term growth

Agility and Innovation

Encourages adaptive thinking and calculated risk-taking, fostering innovation and enterprise agility

We view risk management as a strategic enabler, critical to maintaining business continuity, protecting reputation, and delivering long-term stakeholder value. Anchored in a Board-approved Risk Management Policy, our Enterprise Risk Management (ERM) framework is aligned with globally recognized standards including COSO 2017 and ISO 31000:2018.

This framework covers the full lifecycle of risk management, across identification, assessment, mitigation, monitoring, and governance. It is designed to mitigate strategic, operational, financial, compliance and technology risks. By embedding a risk-aware culture throughout the organization, we empower leaders to make informed choices, take calculated risks, and stay accountable in a fast-changing environment.

Regular risk assessments, scenario analyses, and stress-testing exercises are integral to anticipating threats and shaping effective responses. We use Key Risk Indicators (KRIs) and Control Effectiveness Indicators to provide early visibility and track the strength of risk mitigation measures. Stakeholder engagement, including with customers, partners, employees, regulators, and vendors, remains central to our transparent and collaborative approach to risk governance.

Tanla follows a dual-pronged approach that combines top-down oversight with bottom-up insights, managing risk across enterprise function and projects. This integrated view strengthens agility, supports innovation, ensures compliance, and safeguards the companys reputation.

By taking a structured yet dynamic approach to risk, we are well-positioned to manage disruptions, meet regulatory expectations, and unlock new opportunities. We remain committed to building resilience, enabling innovation, and creating sustainable value for all stakeholders.

Enterprise Risk Management Framework

Linking Risk to Performance and Accountability

A key advancement in FY25 was the formal integration of risk-linked metrics into individual and functional performance frameworks. Business leaders and critical role-holders were assigned KPIs tied to risk mitigation effectiveness, regulatory compliance, and incident response timelines. These metrics were included in performance evaluations and incentive structures, ensuring that risk ownership and accountability were embedded across all leadership levels.

Organizational Pillars Reinforcing Tanlas Risk Culture

Cultural Pillar		Description
Leadership Emphasis		Cultivating a tone of ownership from the top, with leaders championing risk awareness and ethical conduct.
Participative Management		Encouraging cross-functional collaboration and inclusive engagement in strategic and risk- related discussions.
Accountability	Reinforcing responsible behavior through recognition and clearly addressing risk negligence.
Risk-Responsive Reward	Tying performance rewards to risk-conscious decision-making and adherence to core values.
Embedded Risk Thinking	Ensuring that risk assessments are an integral part of all major business and operational decisions.
Open Forum Culture	Providing anonymous channels for employees to report emerging risks or raise ethical concerns without fear.
Optimize	Low-impact risks with effective controls in place. Can be deprioritized or selectively accepted.

Critical Zone: Cybersecurity threats fall into this quadrant due to their high frequency, severe impact potential, and evolving regulatory implications. These risks require immediate, continuous mitigation and enterprise-wide vigilance.

High-Risk Zone:

Risks such as infrastructure scalability and leadership pipeline gaps are positioned here. While they may not pose an immediate threat to continuity, their cumulative effect can constrain Tanlas growth, efficiency, and service reliability if left unaddressed.

Moderate-to-High Zone:

Customer concentration risk, though less volatile, represents a long-term threat to revenue stability. Over-reliance on a limited client base could amplify exposure if market dynamics change, underscoring the need for portfolio diversification.

Key Enterprise Risks/Opportunities, and Mitigation Strategies

Enterprise Risk	Risk in Detail	Contributing Risk Factors	Mitigation Strategies	Outcomes	Capitals Impacted
Cyber Secu- ritythreats	Rising complexity of cyber-attacks pose operational and reputational risks, especially due to reliance on third- party vendors andww sensitive data breach.	Sophisticated attacks on our networks High dependencies on third-party vendors Rapidly evolving data & protection laws	Centralized CISO-led Advanced threat detection systems and monitoring Regular internal and external Company-wide cyber awareness and training programmes Global security certifications: ISO 27001, SOC 2 Type 2 cybersecurity audits cybersecurity governance	No material cybersecurity incidents or operational disruptions in FY25 Improved threat visibility Faster response and higher employee awareness	Financial Intellectual Social Manufactured
			Advanced threat detection systems and monitoring
Third-party Service Disruption	Service disruptions from vendors can impact customer experience and business continuity, given reliance on partners for messaging, cloud, and network delivery.	High dependency on a concentrated set of providers interconnected service ecosystem	Vendor diversification through dual ISP connectivity cy- bersecurity governance Stringent SLAs, AMCs for vendors	Enhanced resilience and continuity	Financial Social Manufactured
			Regular vendor monitoring & contingency planning	Minimized disruptions
Lack of Business Continuity Planning (BCP)	Without a robust BCP, our ability to maintain services during crises could be compromised, risking outages and reputational damage.	Unplanned technical failures due to extreme weather Insufficient Disaster	Enterprise-wide BCP/DR frameworks Timely in infrastructure upgrades	Improved resilience, successful DR activations, RTO/ RPO consistently met, swift and effective crisis response.	Financial Social Manufactured
		Recovery readiness and outdated protocols.	Defined Recovery Time Objective Recovery Point Objective and regular testing
Technical Debt	Reliance on legacy systems or delayed upgrades can hinder agility, increase costs, and limit innovation	Legacy platforms, limited automation, delayed modernization	Phased decommissioning of old infrastructure	Reduced technical debt	Financial Social Manufactured
				Stable and efficient systems with no downtime
Market- Disruptive	Intense pricing pressure may impact profitability and market stability	Lack of pricing discipline	Shift to value-led growth	Maintained profitability margin	Financial
Pricing Strategies			Focus on differentiated offerings, diversification into richer channels	Improved customer stickiness, and sustained competitive advantage
			Deepened enterprise relationships
Lack of Mar-	Expanding without	Insufficient market	Phased expansion	Risk-aware, insight-	Financial
ket Strategy in New Geographies	a clear, localized strategy can lead to misaligned investments	research Lack of local insights	Regulatory/market assessments, Structured GTM, regional	driven market entry Improved regulatory navigation
	Low adoption, and regulatory issues	Absence of structured GTM framework	expert engagement Alignment with platform strategy	and scalable growth

Risk-Based Action Matrix

To strengthen our enterprise risk management (ERM) framework, we introduced a strategic Risk-Based Action Matrix that prioritizes high-impact risks, highlights areas requiring executive oversight, and delineates clear action pathways based on our risk tolerance levels.

This framework allows us to not only respond more proactively to evolving threats but also allocate resources more effectively toward areas that matter most to our operational resilience and growth objectives.

Key Risks and Action Matrix

Action Zone	Definition	Mapped Risks	Recommended Actions
Improve	High-impact risks with inadequate preparedness. Current controls require immediate strengthening.	Customer Concentration - Limited client diversification heightens revenue dependency.	Enhance go-to-market strategy, expand customer portfolio, and accelerate entry into new geographies.
Manage/Test	Risks with significant exposure but actively managed. Require regular stress-testing and inclusion in internal audit reviews.	Cybersecurity Threats, Infrastructure Scalability	Sustain investments in cybersecurity, and continue platform modernization.
Monitor	Medium-severity risks that require active monitoring to detect early signs of escalation.	Employee Attrition	Closely track attrition patterns, strengthen leadership succession planning, and refine engagement and retention programs.
Optimize	Low-impact risks with effective controls in place. Can be deprioritized or selectively accepted.	None currently classified in this zone	Conduct periodic reviews for potential resource reallocation and process optimization.

Fostering a Risk-Aware Culture at Tanla

An effective risk management is rooted in shared accountability. In FY25, we strengthened our employee engagement framework to embed risk awareness into everyday decision-making and drive active participation across the organization.

The Risk Management team led structured training sessions, workshops, and awareness campaigns focused on enterprise risk categories, potential business impact, and mitigation best practices. These were reinforced through interactive platforms such as garage discussions, steering committee reviews, and cross-functional forums- encouraging open dialogue and collaborative problem-solving. Our risk governance is further strengthened by embedding risk criteria into the design and development of products and services.

To further enable bottom-up visibility, periodic risk perception surveys and dedicated communication channels were introduced, empowering employees to flag concerns and contribute mitigation ideas in real time. Insights from these inputs were reviewed by the Internal Risk Committee, chaired by the Chief Risk Officer, and integrated into the broader enterprise risk response strategy.

Emerging Risks

	Emerging Risk 1	Emerging Risk 2
Name of the Emerging Risk	Technology Risk (AI)	Artificial Intelligence-Enhanced Cybersecurity Risk
Description	Natural calamities cause downtime at customer-hosted platforms, directly impacting business operations	Emergence of AI-enhanced cyber threats targeting enterprise environments
	These events are external and often unpredictable, limiting proactive control or intervention	These sophisticated attacks can bypass traditional security measures, challenging the integrity of CPaaS infrastructure
Impact	Impacts customer business deeply. Customer churn for the company and possible loss of revenues	AI-driven cyberattacks can lead to large-scale data breaches and service disruptions
		Such incidents may result in significant regulatory penalties and long-term reputational damage Potential erosion of customer trust, especially critical for Tanla as a trusted global CPaaS provider
Mitigating Actions	Platform services are deployed across multiple geographies, both in India and globally, to ensure architectural redundancy	Specialized Cybersecurity Training: Continuous upskilling of IT personnel on emerging threats, with a focus on AI-driven attack vectors and advanced defense mechanisms
	This geographic distribution provides a reliable fallback during natural calamities or external contingencies	Customer Security Awareness: Ongoing initiatives to educate customers on security best practices, reinforcing the first line of defence
	It also ensures enhanced protection of critical and sensitive customer data hosted on our servers	Regular Security Audits: Enhanced frequency of audits, including Vulnerability Assessment and Penetration Testing (VAPT), to proactively identify and address system vulnerabilities

Monitoring Risk Management Effectiveness

At Tanla, risk monitoring is a core component of our Enterprise Risk Management (ERM) framework, designed to ensure continuous improvement and accountability. In FY25, we implemented a structured biannual review cycle involving both the Internal Risk Committee and the Board-level Risk Management Committee.

Key activities undertaken included:

• Biannual performance reviews of "Risks That Matter" (RTMs) to assess exposure, mitigation progress, and emerging trends.

• Self-assessment exercises by designated risk owners to evaluate control effectiveness and identify areas for reinforcement.

• Internal audit team evaluates the risk controls and maintains governance integrity, while external audits complement this by offering an additional layer of scrutiny aligned with statutory and regulatory requirements.

These mechanisms provided a 360-degree view of risk performance, enabling timely course correction and reinforcing enterprise-wide risk ownership.

Risk Monitoring & Reporting Functional Roles

Responsibility Area	Description
RTM Mitigation Oversight	Evaluate the effectiveness of mitigation strategies for high-priority "Risks That Matter" (RTMs) and recommend enhancements where needed.
Risk MIS & SelfAssessment Review	Review risk owner self-assessments, analyze key gaps, and initiate timely corrective actions to strengthen controls.
Reporting to Risk Committee & Board	Deliver structured quarterly updates, highlight emerging trends, and present performance metrics to the Risk Management Committee of the Board.
Continuous Risk Intelligence	Monitor the dynamic risk landscape and feed relevant insights into decision-making forums to support proactive governance.

At Tanla, proactive risk management is a strategic enabler-driving sustainable growth, operational resilience, and stakeholder trust. By embedding a risk-opportunity mindset across our decision-making processes, we strengthen our ability to navigate uncertainty, accelerate performance, and fulfill our responsibilities to customers, partners, investors, and the broader ecosystem.