Sharekhan's research report on Affle (India)
Affle’s huge addressable market (mobile ad spend to grow much higher than the 12-13% CAGR for global digital ad spending over CY21-25E), focus on high growth client verticals (e-commerce, EdTech, Foodtech, gaming and Healthtech) and 2V/2O strategies would sustain high revenue growth (expect 33% PAT CAGR over FY22-25E). Gradual scale-up of Jampp’s EBITDA margin over next two years to high-teens level would drive 231 bps improve in Affle’s EBITDA margin over FY22-25E. Further, management aims to ramp-up Jampp’s revenue to $100 million (versus $54 mn in FY22) over next couple of years. Management expects Google’s blocking of pop-up add-on gaming would have a minimal impact as revenue share from gaming is less than 10% and pop-ups are the least preferred user targeting tool for Affle.
Outlook
We maintain a Buy on Affle (India) Limited with a revised PT of Rs. 1,515 given its presence in high-growth emerging markets, robust cost per converted user (CPCU) business model, strong tech platforms and patents, focus on 2V and 2O strategies and successful acquisitions in the past. We expect revenue/earnings to post a CAGR of 33%/37% over FY2022-FY2025E.
More Info
At 16:00 hrs Affle India was quoting at Rs 1,354.10, up Rs 27.30, or 2.06 percent.
It has touched an intraday high of Rs 1,362.55 and an intraday low of Rs 1,330.05.
It was trading with volumes of 80,315 shares, compared to its thirty day average of 45,351 shares, an increase of 77.10 percent.
In the previous trading session, the share closed up 1.44 percent or Rs 18.85 at Rs 1,326.80.
The share touched its 52-week high Rs 1,510.15 and 52-week low Rs 871.00 on 14 January, 2022 and 26 May, 2022, respectively.
Currently, it is trading 10.33 percent below its 52-week high and 55.46 percent above its 52-week low.
Market capitalisation stands at Rs 18,043.53 crore.
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