About the Company:
Affle India is a technology company with a proprietary consumer intelligence platform that delivers consumer acquisitions, engagements, and transactions through relevant mobile advertising. It is an Indian company with subsidiaries abroad. India is one of the select markets in the world where digital advertising spends continue to grow at a rapid pace. The digital advertising industry in India grew by 35.3% in 2021 on a YoY basis. Digital media has been leading the growth rally for the Indian advertising industry, growing at almost twice the rate of the overall industry.
The company has two business segments:
The Consumer Platform provides services for leading brands and B2C companies globally by delivering user acquisitions, recommendations and conversions through relevant mobile advertising. The Consumer Platform offers new consumer conversions, retargeting existing consumers and an online to offline platform that converts online consumer engagement into measurable in-store walk-ins. Revenue is earned on a Cost Per Converted User (CPCU) basis, which includes user conversions based on consumer acquisition and transaction models.
Revenue is also earned through awareness and engagement type advertising (Non-CPCU). The CPCU revenue for FY2021-22 on a consolidated basis was Rs. 9,740.18 million, a y-o-y growth of 126.8% from Rs. 4,294.32 million in FY2020-21.
Enterprise Platform: Provides end-to-end solutions for enterprises to enhance their engagement with mobile users, such as developing Apps, enabling offline to online commerce for offline businesses with e-commerce aspirations and providing enterprise grade data analytics for online and offline companies.
Platform-wise break up of Revenue
Consumer Platform Revenue Mix
Industry Overview:
The pace of digital adoption is rapidly accelerating, transforming both the economy and society and fundamentally altering the way people behave and interact. The exponential increase in machine-readable data available over the internet is a defining characteristic of this digital transformation, giving rise to a data-driven, digitally intelligent ecosystem at an unprecedented scale.
Furthermore, the growth of mobile internet is set to accelerate even further with the advent of 5G, which is scaling up faster than any previous mobile network generation. Industry projections suggest that Global 5G subscriptions will surpass 1 billion by the end of 2022.
Competitors: Tradedesk, InMobi, Criteo, Pubmatic, Magnite, Digital turbine operate in developed markets of US & Europe. Amongst competitors, only Affle and InMobi have patents related to mobile advertising segment with new patents granted in 2022 being 3 and total of 20 patents with Affle.
Business Performance:
Affle delivered revenue growth of 6.1% and a PAT growth of 17.6% QoQ in Q3 FY2023. It achieved revenue CAGR of 58.5% in Q3 over the last 3-year period, much ahead of the industry growth trends. CPCU business delivered 67.8 million user conversions during the quarter, at an INR 51 CPCU rate.
Overall, CPCU revenue for Q3 increased by 14% y-o-y, ahead of the total revenue growth of 10.8% YoY. In terms of 9M FY2023, company achieved revenue growth of 40.6% YoY, PAT growth of 40% YoY and this growth was largely well-balanced across the three quarters.
Click here to checkout 10 Year Financial X-Ray
Risks:
Customers can reduce their marketing spends due to decline in Startup funding in key markets like India, South East Asia, Middle East and Latin America.
Adverse Data protection Laws such that Personal Data Protection Act (PDPA) that Government of India intends to implement which is in-line with the Data Protection Laws enacted in Europe shall increase the Data Inventory Cost.
Outlook:
Based on continued optimism, greater recovery across industries, and further innovations on mobile and in OTT/CTV video streaming, it is expected that global ad spends will continue to outperform those in the past, potentially even doubling in next years.
Despite major changes in data privacy laws, tracking, and regulation, digital ad spend is expected to show steady growth. Specifically, within the digital landscape, mobile advertising is projected to account for a considerable and growing share of digital ad spend. Looking ahead to India, it is expected that the country's consumer digital economy will be a USD 800 billion market in 2030, representing an approximately 10x growth from 2020 (as per EY).
Disclosure: MoneyWorks4me's employees may have exposure in the securities mentioned in the above report. For detailed disclosure click here.
MoneyWorks4Me rating and ranking of funds for SIP is available to subscribers only. Moneyworks4Me is not a rating and ranking agency, however it is required that users have a way of selecting funds and building a Portfolio. The method used by it are described below to enable users to understand the logic behind the rating and ranking Subscriber will find more details on this in the various content made available from time to time. In case you need more please write to besafe@moneyworks4Me.com
MoneyWorks4Me rates and ranks mutual funds based on the following data-driven system:
Funds ranking in screeners: Performance Consistency and Quality are two parameters used for ranking funds for SIP. The ranking as follows GG, GO, GR, OG, OO, OR, RG, RO and RR.
With the same color-coded funds, the one with the higher Average 3-year rolling returns (over 5 to 10 years), the number that appears in the Performance tag, ranks higher.
Here is the summary:
The third tag Upside Potential is not relevant for SIP. It is relevant for lumpsum investments in Mutual Funds.
Make an informed decision for Stocks
Invest using an intelligent system with powerful data-driven tools that help you identify opportunities and make informed buy-hold-sell decisions
Buy quality Stocks when they are available at reasonable prices and supported by an upward price trend and Sell when they are Overvalued using the Decizen Rating System. Covers 3500+ stocks
100% Secure Process
Account Discovery
- OTP from CAMS
Account Linking for Stocks & MF
- One OTP per link Eg. NSDL, CDSL, CAMS, KFin etc.
One Click Upload for your Current Portfolio and Future Transactions!
Don't miss out! First 10 users today get it FREE
With this 4 hrs Masterclass, you’ll be able to:
Download APP
