Target: ₹2,240

CMP: ₹1,584.40

Affle 3i’s Q4 performance was better than our estimates, with 20.3 per cnet y-o-y revenue growth, led by India and emerging markets, up to 21.2 per cent. Growth was supported by deeper customer engagements, new logo additions, and continued traction across key industry verticals and geographies. Developed markets grew 18 per cent y-o-y as deferred revenue kicked in. Gross margin declined 114 bps to 38 per cent , due to discretionary investment in expansion. EBITDA margin rose 120bps YoY to 22.5% in FY26 on lower cost, bringing AFFLE closer to its 23-24% margin guidance.

The company is entering a strategic phase of scaling its revenue base for the AI-led advertising ecosystem, with management’s inorganic push into developed markets appearing structurally positive.

Affle is set to achieve about 20 per cent near-term revenue growth. The stock has been down by about 14 per cent in the past six months. We expect EBITDA margin to remain broadly stable in the 23-24 per cent band, supporting healthy earnings visibility. CPC-led performance advertising is relatively insulated from macro-driven ad-spend moderation versus brand-led categories.

We maintain Buy with target price unchanged at ₹2,240. Our estimates during FY27-28E for revenue remain unchanged while EPS estimates are down by 10 per cent on the back of high other income base in FY26.

Near-term risks include execution, integration, and potential margin dilution if acquired entities carry structurally weaker profitability, similar to earlier acquisition cycles.

Published on May 12, 2026