Affle India share price jumps 7% to hit 52-week high after Citi initiates with a ‘Buy’ call; sees 17% upside

Affle India share price jumped over 7% to hit a 52-week high of ₹1,464.95 apiece on NSE after Citi initiated coverage on the stock citing strong growth prospects.

Citi initiated coverage on Affle India shares with a ‘Buy’ rating and a target price of ₹1,600 per share, impling an upside potential of 17% from Monday’s closing price.

The target price is based on 48x FY26E P/E – multiple at a ~50% premium to global ad-tech peers (35%/10% discount to largecap/midcap India internet). While scale is important in Adtech, exposure to growth market or sub-segments and higher than average expected growth justifies its premium multiple, according to Citi.

“Affle has positioned itself as one of the alternates to walled gardens (Facebook and Alphabet primarily). Key competitive advantages: verticalization (focus on select high-growth sectors), conversions-based business model (customers pay for performance), data advantage in India/EM and strategic partnerships on the supply side with OEMs to access premium touchpoints,” Citi said in a report.

The company also has a decent Merger & Acquisitions (M&A) track record (M&A focuses on new verticals, geographies, and capabilities in ad-tech). The brokerage believes overall these drivers should enable profitable growth (for itself) and high RoAS (for clients).

The brokerage firm expects Affle India to benefit in FY25 from the post-integration unlock of synergies from YouAppi in US/DM Markets and see benefits from exposure to CTV through Mediasmart. The key near-term upside triggers include faster recovery in India and margins reversion to 20%+.

Citi expects Affle to deliver 20% topline CAGR over FY24-27E and 400 bps EBIT margin expansion over the period.

Affle India share price has rallied more than 17% in one month and has jumped over 30% in three months. Year-to-date (YTD), Affle India shares have gained 7.5%.

At 10:30 am, Affle India shares were trading 2.06% higher at ₹1,397.70 apiece on the BSE.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.