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Affle 3i Limited Q3 FY2026 Analysis: AI-Driven Milestone Performance

Lesson 221/323 | Study Time: 15 Min

Course: Quarterly Result Updates & Analysis

Affle 3i Limited Q3 FY2026 Analysis: AI-Driven Milestone Performance

Affle 3i Limited is a global consumer intelligence technology company that provides mobile advertising and data-driven solutions to leading brands. Operating on a unique Cost Per Converted User (CPCU) model, it focuses on delivering measurable business outcomes through high-ROI user acquisitions and engagements.

Section 1: Financial Growth Table (Consolidated)

Affle reported its highest-ever quarterly revenue run-rate this quarter, crossing the INR 7 billion mark.

Metrics (INR Million)	Q3 FY2026 (Current)	Q3 FY2025 (YoY)	YoY Growth %	Q2 FY2026 (QoQ)	QoQ Growth %
Conversions (Volume in mn)	119.7	103.3	15.9%	109.0	9.8%
Revenue from Contracts	7,175	6,017	19.2%	6,467	10.9%
EBITDA (Operating Profit)	1,630	1,314	24.1%	1,461	11.6%
Profit After Tax (PAT)	1,193	1,002	19.1%	1,105	8.0%
Basic EPS (INR)	8.50	7.15	18.9%	7.88	7.9%
Avg. CPCU Rate (INR)	59.6	57.8	3.1%	58.1	2.6%

Segmental Revenue Split (Q3 FY2026)

Market Segment	Revenue Share %	YoY Growth %
India & Emerging Markets	73.9%	19.8%
Developed Markets	26.1%	17.8%

Section 2: Performance Highlights & Concall Insights

Beat/Miss Analysis

Revenue Beat: Surpassed the INR 700 crore quarterly milestone for the first time.
Margin Expansion: Achieved its 7th consecutive quarter of sequential EBITDA margin expansion, reaching 22.7%.
Volume Growth: CPCU business remains the primary driver, contributing 99.5% of total revenue in Q3.

Critical Concall Insights

Agentic AI Adoption: The company has launched Niko, an advanced AI engine that automates workflows for real-time bidding and targeting, significantly enhancing operational productivity.
Inorganic Strategy: Management has narrowed its focus from 12 potential acquisition targets to 4 companies, currently undergoing active due diligence to accelerate growth in developed markets.
Inventory Investment: The recent spike in data and inventory costs is a conscious investment (approx. 10% of these costs) to build verticalized intelligence for international expansion.

Section 3: Profitability & Valuation Suite

Profitability Metrics

EBITDA Margin: 22.7% (Up 89 bps YoY).
PAT Margin: 16.2% (Steady performance despite lower other income).
Cash Flow Efficiency: Operating Cash Flow (OCF) to PAT for 9M FY2026 stood at 75.8%, expected to normalize toward 85-95% in Q4.

Valuation Parameters (At CMP 1449)

TTM EPS: INR 31.24 (approx.)
Current PE: ~46.4x
Debt-to-Equity: Minimal borrowings (INR 1,655 million) against Total Equity of INR 34,171 million.
Balance Sheet: Robust cash position and liquid investments totaling over INR 4,208 million.

Section 4: Trend Analysis & Future Outlook

Affle has demonstrated a strong improvement trend across its 9-month performance parameters:

Revenue Growth: Sustained at 19.3% for 9M FY2026.
EBITDA Margin: Improved significantly from 21.0% (9M FY2025) to 22.6% (9M FY2026).
10x Vision: Management remains committed to its decadal growth vision, aiming for a 20-25% combined growth across revenue and EBITDA.

Peer Comparison: Affle continues to outperform several global ad-tech peers by maintaining profitability (positive PAT) while scaling volumes, whereas many global competitors struggle with bottom-line consistency.

Conclusion

Affle's transition into the "Affle 3i" era is marked by solid execution in AI-led automation and a resilient verticalized strategy across categories like E-commerce, Fintech, and Gaming. The focus on premium iOS conversions and Connected TV (CTV) provides a high-value moat against traditional competitors.

For a detailed intrinsic valuation and to see if Affle fits your Wealth-Building Strategy, you can access our Fair Value analysis at https://docs.google.com/spreadsheets/d/e/2PACX-1vRV5fYXG6KvzBaUBW2bzgFUQQWAOG1vouqqCPIaPqmBEpnHKFi2nDGXkp4-xY-0dGZSIqrXHmJiTfa5/pubhtml?gid=291692801&single=true

Disclosure: This analysis is for educational purposes only and does not constitute a buy/sell recommendation. Stock market investments are subject to market risks.

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Piyush Patel

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