Tanlaw Solutions - Buy on dips

Tanla Solutions (Rs 46.4): This stock has been charting a strong up-trend since the March 9 trough at Rs 21. Mild signals of a long-term reversal are apparent in the move above the long-term down-trend line drawn from its all-time high of Rs 410 and the close above 50-day moving average.

Formation of a long-term trough can be confirmed if the current correction halts above Rs 35. Investors with a medium term perspective can therefore buy in declines with a stop at Rs 34.Short-term target for the stock is Rs 70. Downward reversal from this level will result in the stock moving in the range between Rs 35 and Rs 70 for a few more months. Rally above Rs 70 will take the stock towards the resistance band between Rs 100 and Rs 110 that is likely to cap any rally over the next 12 months.

— Lokeshwarri S.K.

businessline 03-05-09

Our Research Team Views :

Day High Low Rs.44-47 on 29th April 2009
Monthly High Low Rs.56-24
6M H/L Rs.91-23

Sectoral Trend - Neutral

This share has risen sharply more than 80% in the last 2 months. The following 
are the ideal ranges for buying and selling :

Buying Range : Rs.30-34

Selling Range : Rs. 55-60 short term


Wait for the price to the buying range on correction in the stock markets.

Holding period : 12-18 months
Returns expected : 100% plus


Equity Research Team

Intelligent Investor - Invest Advisory Arm of

Ravina Consulting
Bangalore India

Read - www.intelligentinvestor1.blogspot.com
Follow - www.twitter.com/SmartInvestor

For best investment ideas get in toch with us we give - One week, One Month, One Quarter, 6 M / 12 M picks

Get in touch with us for Portfolio Advisory Services.

Tanla Solutions - Value Pick

Tanla Solutions

For this mobile value added service (MVAS) player, which gets over three quarters of its revenues from UK and Ireland, the recession in these markets have dampened the business outlook in the near term.

The company offers telecom infrastructure solutions through its four segments---products, network aggregation (SMS, MMS), professional services (infrastructure management) and mobile payments (smart phones) in about 28 markets around the world. Though the UK market is growing at just 10 per cent, VAS contributes to nearly a fifth of total mobile usage. With a shift to higher usage of 3G and mobile internet on the rise, Tanla with a 5 per cent market share in the UK market should benefit. For Q3FY09, except for the mobile payments segments, all others reported a decline of over 20 per cent q-o-q (sequential) due to a combination of slowing growth, regulatory changes in UK and weakening of the British pound.

The company is expanding into the Indian market and has deployed the 3G platform for MTNL and launched the missed call alert for Aircel among other projects. While Tanla is debt free and sitting on a cash of about Rs 150 crore, its debtors at Rs 278 crore and an increase in debtor days to 119 days in Q3 are causes for concern. The management, however, believes that this will come down going ahead and Ebidta margins, which have dropped (768 bps q-o-q) to 38 per cent, should stabilise on higher transaction volumes and cost cutting efforts. The stock which has corrected substantially over the year and on the back of robust growth prospects should fetch returns of about 40 per cent over the next one year.

source : business-standard