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AFFLE: CMP: 1528: Long term gr: 49% | Cy Growth: 28% | Q1_FY_25 Result Updated
(Strong Demand seen in continuity from Q4 to even Q1_fy25)
### About the Company
Affle (India) Limited is a global technology company with a leading market position in India. It operates an end-to-end mobile advertising platform that reaches over 3.4 billion connected devices. The company's business model focuses on consumer platform solutions, delivering high ROI through targeted mobile advertising. Affle is a global technology company with a proprietary consumer intelligence platform that delivers consumer engagement, acquisitions, and transactions through relevant Mobile Advertising. They have Leading market position in India with Profitable business model that is well-defined with a strategic growth plan. The platform aims to enhance returns on marketing investment through contextual mobile ads and also by reducing digital ad fraud. While Affle's Consumer platform is used by online & offline companies for measurable mobile advertising, its Enterprise platform helps offline companies to go online through platform-based app development, enablement of O2O commerce, and through its customer data platform. Affle Holdings is the Singapore-based promoter for Affle India and its investors include Microsoft, D2C (An NTT DoCoMo subsidiary), Bennett Coleman & Company (BCCL) amongst others.
### Industry Overview
The digital advertising industry continues to grow, driven by increased internet penetration and mobile usage. Affle is well-positioned within this space, leveraging its proprietary technology for consumer insights and targeted advertising.
### Peer Group Analysis
Key competitors include InMobi, Mobvista, and AppLovin. Affle's consistent growth in revenue and profitability, along with its focus on innovation and global reach, positions it competitively in the market. Best in this Industry. From a very fast emerging and growing industry worldwide.
### Historical Performance
*FY_19*: Pre IPO Sales & Profits were 250 Cr and 50 Cr. Affle India successfully completed its IPO in India on 08.08.19 & we have recommended it as the wealth creator during the IPO launch.
*FY_24*: Sales and Profits reached nearly 1800 Cr and 300 Cr respectively. Share price grew from 150 to today around 1500 which is 10X price growth.
- **Revenue Growth (FY19-FY24):** 639%
- **PAT Growth (FY19-FY24):** 509%
- **Operating Cash Flow Growth (FY19-FY24):** 449%
- **Employee Growth (FY19-FY24):** From 236 to 644 employees
#### Consolidated Financial Results for Q1 FY25
- **Revenue from Operations:** ₹5,195.03 million, up from ₹4,066.84 million in Q1 FY24 (27.8% YoY growth).
- **Profit After Tax (PAT):** ₹865.90 million, up from ₹661.72 million in Q1 FY24 (30.8% YoY growth).
- **EBITDA:** ₹1,047 million, up from ₹781 million in Q1 FY24 (34.0% YoY growth).
#### Segmental and Regional Growth
- **India and Emerging Markets:** Contributed 73.2% of revenue in Q1 FY25.
- **Developed Markets:** Contributed 26.8% of revenue in Q1 FY25.
#### User Growth
- **CPCU Business Model:** Conversions increased from 61.9 million in Q1 FY24 to 90.8 million in Q1 FY25.
- **Average CPCU Revenue:** Increased to ₹5,177 million in Q1 FY25 from ₹3,226 million in Q1 FY24.
#### Profitability Ratios
- **EBITDA Margin:** 20.1% in Q1 FY25, up from 19.2% in Q1 FY24.
- **PAT Margin:** Consistent at 15.9% in both Q1 FY24 and Q1 FY25.
- **Effective Tax Rate (ETR):** Increased to 18.7% in Q1 FY25 from 5.6% in Q1 FY24.
#### Leverage Ratios
- **Finance Costs:** ₹37.87 million in Q1 FY25, up from ₹34.46 million in Q1 FY24.
#### Earning Ratios
- **Basic Earnings Per Share (EPS):** ₹6.18 in Q1 FY25, up from ₹4.97 in Q1 FY24.
- **Diluted EPS:** ₹6.17 in Q1 FY25, up from ₹4.97 in Q1 FY24.
### Near term Outlook
We may see Affle grow the sales and Profits this year strong by 25% and 29% respectively. New buying again can be done during any fall near 1104 while target for this year itself should be 1870. Affle aims to continue its growth trajectory by expanding its reach in both developed and emerging markets. The company's focus on innovation, strategic acquisitions, and leveraging AI and machine learning for advertising optimization are key drivers for future growth.
#### Future Outlook
The company's strategic focus on high-growth verticals and markets, combined with its strong technological foundation, positions it well for sustained growth in the digital advertising industry. We may see 20% sales and Profit growth going further even this decade. This growth can help Affle reach the benchmark 5000 Cr sales till fy_30 and 1000 Cr Profits during the same time. Such a growth can give a multiyear rally to the price of stock.
*Disclosure: * This document is prepared for educational purposes, yes we have been buying this company in our fund.
