Buy Affle (India); target of Rs 1535: Sharekhan

Sharekhan's research report on Affle (India)

Affle’s (India) Q4FY24 revenue stood at Rs. 506.2 crore up, 1.5% q-o-q/42.3% y-o-y, beating our estimates of Rs. 499.8 crore, driven by steady growth in CPCU revenue. EBITDA margin was flat at 19.4%, on q-o-q and y-o-y basis, slightly beating our estimate of 19.2%. CPCU revenue recorded steady growth at Rs. 503.8 crore, up 5.5% q-o-q/57.8% y-o-y. Converted users grew 5.5% q-o-q/41.7% y-o-y to Rs. 8.8 crore.The company is poised to further accelerate its growth trajectory in FY2025 with a gradual increase in profitability margin. The company is experiencing a strong market opportunity as advertisers are consistently increasing their digital spending.

Outlook

We maintain BUY on Affle with an unchanged PT of Rs. 1,535, as the company is expected to accelerate the growth trajectory, driven by a wider adoption of its CPCU model and increased digital spending by advertisers. At CMP, the stock trades at 43/36.1x its FY25/FY26E EPS.