Affle India Q1 Review - Result Beat; Outlook Confident Across Developed, Emerging Markets: Dolat Capital

Dolat Capital Report

Affle India Ltd. reported revenue growth of 2.6% QoQ (our estimate 1.7%) and 27.8% YoY. Conversions grew 3.4% QoQ, at 91 million, while CPCU was flattish at Rs 57. Operating profit margin was up 104 basis points QoQ at 16.4% (our estimate 15.7%). Inventory costs went up by 3.7% QoQ, but was offset from sequential decline in Employee/Other expenses by 2.3%/8.1%.

Management remains confident of delivering revenue growth of 20%+ and profit after tax growth of 20-25% in the foreseeable future and believes that growth will well exceed industry growth rates.

Affle’s healthy set of results exhibit broad based growth and margin expansion. We largely retain our FY25/FY26E earnings estimates, but given recent runup in stock price revise our rating to ‘Accumulate’ from ‘Buy’ with discounted cash flow -based target price of Rs.1640 (implies ~50 times FY26E earning per share).

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