Affle India - India Mobile Internet Advertising Leader

Few cursory observations:

  • Good revenue growth due to increased contribution of international business and higher conversions
  • Huge increase in employee & data inventory cost
    Both of the above points to impact of acquisitions, may be will get clarity in concall

Important to understand the ongoing cost structure, margins have been dropping consistently.

Discl - Invested

The drop in Margins for next few quarters was expected due to Jampp acquisition and same was communicated by the management during the investor call at the time of acquisition. So nothing new. Margins should be back to normal after 3-4 quarters may be?

Drop is not limited to this quarter itself, if you observe last 12-15 quarters it is on declining trend. Additionally if an acquisition is less profitable than parent company it really need to provide some strategic edge in future to justify the investment. Lets see how it pans out.

Jampp acquisition will provide Affle access to new markets. Hence Mr. Anuj Khanna was very upbeat of this acquisition and also he was smart to acquire this at very attractive deal.

Looks like my fears were unfounded. Company has delivered solid growth and is guiding for 25-30% growth over the next 5 years

Disclosure: Had exited earlier this year. Have bought back the stock once again post 2QFY22 results

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With the international expansion CPCU rate is bound to increase which is at 51 right now. Their goal is to get the new acquisitions more profitable and get to the Affle’s range which is good.

Keep an eye… the company’s CFO (Kapil Mohan Bhutani) has bought 23100 shares from the open market today as per today’s disclosures.

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Yes sizeable acquisition from a non-promoter KMP :+1:
~3x his annual salary

disc. Invested from lower levels and added recently

Not exclusive access.

Latest company PPT

Analyst Meet Update by Prabhudas Lilladher.

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Has anyone had a close look at its acquisitions and employee cost capitalization. Seems to be very important given the high rate of growth in Goodwill and Capitalized Intangibles

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Affle has delivered very strong Q3 numbers.
91bcd7f3-91dd-4052-9b67-f6c34b86be71.pdf (243.2 KB)

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Amazing performance - a true growth company

If you screen for $1bn market cap co’s with 3yr Rev and PAT at 40% cagr, its a very short list of co’s and Affle really stands out for its business model, consistency and future growth potential.

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Is the YoY growth all organic, or is there are any benefit from M&A?

The jump in revenue is because of Jamp aquisition. Contribution from International revenue is increasing and so is the cpcu.

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In Q2, organic PAT growth was 37% yoy. The Jampp acquisition has also led to margin compression in Q2 and Q3 which is expected to gradually reverse over the next two years. This should provide a decent boost for earnings growth going ahead.

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Why sebi not allowed affle to give future guidance?
Anyone knows why

Can you share background - sebi order etc?