Broker’s call: Affle (India) (Buy)

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Target: ₹2,522

CMP: ₹1,563.05

Established in 2006, Affle (India) Ltd (Affle) is a pioneer in programmatic digital advertising for mobile devices in India. The company’s unique approach involves using a Return On Investment (ROI) linked Cost Per Converted User (CPCU) model, where earnings are based on conversions and positive ROI for advertisers, rather than the traditional Cost Per Click (CPC) and Cost Per Mille (CPM) models.

Over the years, it has made multiple strategic acquisitions to enhance its consumer platform by integrating advanced capabilities. It has been successful in creating a solid platform for mobile-first digital advertising market with its proprietary tech stack, acquisitions, and continuous R&D.

Further it has been able to execute well and has grown its revenue and PAT at a CAGR of 49 per cent and 44 per cent, respectively from FY19 to FY24. As of FY24, about 73 per cent of its revenue came from emerging markets, including India.

Affle is poised for substantial value creation by combining robust growth in its existing business with strategic inorganic expansions. With a unique business model, unmatched network effects, and a prudent acquisition strategy. Further it is expanding into new geographies and has able to grow faster than the industry making it an attractive investment. Therefore, we initiate coverage on Affle (India) Ltd