Sharekhan's research report on Affle (India)
Q1FY2022 revenues were strong, led by a robust 85% y-o-y growth in converted users; EBITDA margin contracted by 204 bps y-o-y owing to higher employee costs. OCF to PAT ratio remained at 134%. Faster adoption of digital advertising in its top verticals, launch of products and shift of budgets towards mobile advertising are expected to strongly drive up revenues. Increasing direct customers’ revenue contribution and partnerships with OEMs would help Affle to maintain its market position given higher access to first-party data; expect revenue/earnings to post a CAGR of 45%/32% over FY2021-FY2024E.
Outlook
We maintain a Buy on Affle (India) Limited with a revised PT of Rs. 6,000, given greater adoption of its platforms, a unique CPCU business model and expansion into new geographies.
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