Target: ₹1,535
CMP: ₹1,188.95
Affle’s (India) Q4FY24 revenue stood at ₹506.20 crore up, 1.5 per cent qoq/42.3 per cent yoy, beating our estimates of ₹499.8 crore, driven by steady growth in CPCU revenue. EBITDA margin was flat at 19.4 per cent, on qoq and yoy basis, slightly beating our estimate of 19.2 per cent.
CPCU revenue recorded steady growth at ₹503.8 crore, up 5.5 per cent qoq/57.8 per cent yoy. Converted users grew 5.5 per cent qoq/41.7 per cent yoy to ₹8.8 crore. The company is poised to further accelerate its growth trajectory in FY2025 with a gradual increase in profitability margin.
The company is experiencing a strong market opportunity as advertisers are consistently increasing their digital spending.
We maintain Buyt on Affle with an unchanged PT of ₹1,535, as the company is expected to accelerate the growth trajectory, driven by a wider adoption of its CPCU model and increased digital spending by advertisers.
Key Risks: Entry of a large technology player in this space; inability to generate relevant data for targeted advertisers; and government regulations related to the management of consumer data and respect for privacy.