Affle India's (Affle) revenues increased 59.3% YoY (up 50.3% QoQ) to Rs. 135 crore mainly led by healthy growth in organic revenues (up 21% YoY) and inorganic revenues (at Rs. 32 crore). Adjusted EBITDA margins were largely flat YoY (up 50 bps QoQ) to 25.5%. PAT margins were at 19.9% while PAT was up 73% YoY mainly led by lower tax expenses and higher other income.
Valuation & Outlook
Increased spend in mobile advertising, tapping connected devices, improved penetration in top 10 verticals, newer geographies and tier-2 & tier-3 cities of India will drive topline in the long run. Further, in a post Covid world, we expect a significant shift among consumers to adopt digital technology globally, which will drive long term revenues. In addition, the company’s unique business model, healthy PAT growth (CAGR of 40%) prompt us to remain positive on the stock. Hence, we maintain BUY recommendation on the stock with a target price of Rs. 3525 (50x FY23E EPS).
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Affle_CoUpdate_Nov20.pdf