Sharekhan's research report on Affle (India)
Top media agencies forecast digital advertising to be larger in size than television advertising at 45-48 % of the total domestic advertising market with digital advertising expected to grow at 30-32% in 2023. A disproportionate consumer shift to digital and connected devices to mobile augurs well and would support strong growth momentum for Affle. Affle’s ability to provide end-to-end solutions along with extensive consumer profile data would be a key driver to address opportunities post the pandemic especially in categories such as Travel and Hospitality. Affle’s unique CPCU model differentiates it from competitors and creates strong return on investment (ROI) for advertisers. Thus, it can keep the competition at bay and maintain/improve pricing despite concerns due to macroeconomic headwinds.
Outlook
We reiterate our Buy recommendation on Affle India with a revised PT of Rs. 1,400, given the strong sector outlook, unique business model, strong presence in high-growth verticals and shift of advertising budgets towards mobiles.
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