Prabhudas Lilladher has given Buy recommendation for Affle (India) with a target price of Rs. 1496 in its research report issued on Dec 14, 2021

Prabhudas Lilladher’s research report on Affle (India)

We attended virtual Investor Day of Affle where management highlighted their technology strengths and their Affle 2.0 strategy. Affle’s higher than industry 4Y-Revenue/EBITDA CAGR of 45.7%/41.9% in challenging emerging markets with low unit economics and low online shopper penetration is result of its strong consumer technology platform powered by billions of data points and sophisticated machine learning and AI algorithms. Affle aims to reach 10Bn+ connected devices (vs current 2.4 Bn devices) over next decade through its 2.0 strategy anchored on ecosystem level partnership, vernacular focus and verticalization. Affle’s focus on developing innovative technologies – 1) multiple vernacular language detection, 2) household sync technology, 3) gesture-based, voice-intelligence driven interactions within the live streams such as podcasts, 4) block-chain based technology IP for ad-fraud detection etc. positions it well to navigate changes in dynamic digital advertising industry. Affle thrived post implementation of stringent data privacy policy by iOS by being early adopter of SKAN technology and achieved impressive growth (+10X) in conversion rates.


Our DCF based TP is INR 1496 (implied earnings multiple of 63.3x on FY24EPS). Affle having strong 37% EPS CAGR over FY22-24E is trading at 1.8x/1.2x on FY23/24 PEG, ~50-60% discount to IndiaMART (3.5x/3x on FY23/24 PEG) and Info Edge 3.8x/3.0x on FY23/24 PEG). In terms of P/E it is trading at 66.7x/45.6x on FY23/24 EPS of 16/24 with revenue/EPS CAGR of 39%/37% over FY22-24E.

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