Affle India - India Mobile Internet Advertising Leader

Affle reported a great set of numbers today for Q4-FY2022. Some quick notes

1- Q4-22 top-line came as 315 crores vs 142 crores in Q4-Fy21.

2- EBITDA for the quarter was 58.7 crores vs 34.5 crores last year same quarter.

3- PAT for the quarter was 68.5 crores vs 58.5 crores in Q4-21. Last year same quarter had a one- time 36 crores other income. Adjusting for that profit 98%.

4-In Fy22 India revenue stood at 35% of total sales and 65% was from international markets.

5- Average CPCU saw a sharp increase from 41 rupees to 51 rupees year over year.

6- Converted users stood 5.66 crores in Q4-FY22 vs 29.6 crores in previous year same quarter.

Commentary on future prospects

1- With digital marketing continued to have good tailwind Affle would possibly continue to see good acquisition of new customers and retain old ones to have transactions/engagements.

2-The data enrichment and fraud models of Affle should stand for good in the medium and long term.

3- A major part of the story for Affle so far had been thoughtful acquisitions, and there is good reason to believe that it would continue on the same path.

4- For FY23, I expect Affle to clock about 25% top-line growth which would result in sales of 1350 crores. I also think that the operating profit margin to slowly increase from current 20% and possibly reach 22% for the full year Fy2023.

5- With 22% operating profit margin the operating profit for FY2023 would be 297 crores. Add about 63 crores of other income, and take out 5 crores interest and 35 crores of depreciation to that, and that would result in PBT of 320 crores. This would be about 30% of growth over the FY22.

6- Please note that there are a lot of floating variables with Affle and the calculations done by me could completely wrong. But I would continue to update after future quarterly results about how things are shaping.

Cheers,

Krishna

PS: The post above is based on the results and investor presentation. The earnings call is scheduled for Monday 16th May. I may edit the post after listening to earnings call. Also please note that I am not a SEBI certified analyst. This is not a buy or sell reco. I have ownership bias.

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Formidable growth continues. Margin drag is becoming more evident and with current macro events, currency risk is also becoming a factor, overall positive on the business, just finding it difficult to value it.

Margins are compressed as the acquired businesses were working on lower EBIDTA. Management has guided as they refine the processes and amalgamation gets completed we will see improvement in margins.

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