Buy Affle India; target of Rs 1700: Anand Rathi

Anand Rathi's research report on Affle India

In FY25, we expect verticals across EFGH (E-Commerce, FinTech, Gaming, Healthcare & hospitality) apart from RMG (Real money gaming) to start showing robust growth and expect strong 25% y/y growth in revenue. The RMG vertical’s ~Rs150m-180m loss per quarter to continue till Q2FY25’s first month; post that, the base would be favorable. We also expect company to benefit from the post-integration unlock of synergies from YouAppi in developed and emerging markets.

Outlook

Factoring in a turnaround in developed markets, growth in all verticals, focus on premium and integrated offerings, we raise our FY26e earnings ~4.3% and upgrade our rating to a Buy with a higher DCF-based 12-mth TP of Rs1,700, assuming a 12% WACC and a 6% terminal growth rate.