Buy Affle (India): target of Rs 6000: Sharekhan

Sharekhan is bullish on Affle (India) has recommended buy rating on the stock with a target price of Rs 6000 in its research report dated August 09, 2021.

An Edelweiss research report for Q4FY21 says road tonnage continued to improve, evident in e-way bill generation (up 6% QoQ) and improved core trucking rentals. “We estimate tonnage would increase by three–five percent for truckers. Asset-light plays Mahindra Logistics and TCI Express remain our preferred picks due to their ability to scale up/down as the environment demands,” the report said. Edelweiss is bullish on Blue Dart Express due to the pandemic-induced boom in e-commerce and its leaner cost structure. It has retained a ‘buy’ call on Mahindra Logistics, TCI Express and Blue Dart Express.

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Sharekhan’s research report on Affle (India)

Q1FY2022 revenues were strong, led by a robust 85% y-o-y growth in converted users; EBITDA margin contracted by 204 bps y-o-y owing to higher employee costs. OCF to PAT ratio remained at 134%. Faster adoption of digital advertising in its top verticals, launch of products and shift of budgets towards mobile advertising are expected to strongly drive up revenues. Increasing direct customers’ revenue contribution and partnerships with OEMs would help Affle to maintain its market position given higher access to first-party data; expect revenue/earnings to post a CAGR of 45%/32% over FY2021-FY2024E.

Outlook

We maintain a Buy on Affle (India) Limited with a revised PT of Rs. 6,000, given greater adoption of its platforms, a unique CPCU business model and expansion into new geographies.

For all recommendations report, click here

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