Brokerages bet on this stock to make most of virus-triggered behaviour shift

Mumbai: Affle India, a mobile marketing firm, looks well placed to reap the gains from higher internet usage, as people stay indoors amid the coronavirus-induced lockdown.

The company, which does not have a comparable listed peer in India, saw its stock crash nearly 60 per cent from a February 19 peak price of Rs 2,296 to hit Rs 956 on March 27, but has risen nearly 40 per cent to trade at Rs 1,335 on Tuesday. The stock is now up nearly 80 per cent from its August 2019 issue price of Rs 745.

In a May 5 note, Nomura reiterated its ‘buy’ call on the stock with a price target of Rs 1,900.


The brokerage pointed out that Affle finds the macro factors positive with regard to consumer behaviour as an increasing amount of time spent online has led to a sharp rise in internet traffic, thus increasing available digital ad inventory at attractive rates.

Nomura says because of Covid-19 pandemic, overall ad spending has been lower, but the percentage of overall ad spend on digital has increased.

In the long term, Affle sees positive trends for digital ad spend within the “EFGH” verticals -- e-commerce, education and entertainment; food-tech and finTech; gaming and government businesses; and healthcare, resulting from the Covid-19 after-effects.

Also, a weaker demand environment allows Affle to gain market share as smaller companies would find it difficult to sustain business. It also provides opportunities to acquire assets at attractive prices, Nomura analysts said.

Some other analysts also shared the view.

“From the business perspective, they are well positioned to enable themselves in the current environment,” said Deven Choksey, Group Managing Director, KR Choksey Investment Managers

“They need to change priorities for different verticals as per the calling of the current situation. We need to wait and see how they can pull it off,” he said.

On May 5, Sharekhan by BNP Paribas maintained its positive view on the stock, and said it expects an upside potential of 28-30 per cent from its then market price of Rs 1,392 a share.

“As screen time has gone up significantly during lockdowns and work-from-home (WFH) mode, it has led to more clicks and impressions and internet traffic,” Sharekhan analysts said in a note.

“This has increased Affle’s ability to buy inventory and impressions at a cheaper rate in an efficient manner,” they said.


Affle India has two business segments, consumer and enterprise platforms. The consumer platform aims to enhance returns on marketing spend by delivering contextual mobile ads and reducing digital ad fraud. The enterprise platform primarily provides end-to-end solutions for enterprises to enhance their engagement with mobile users.

However, a near-term blip for the stock has been inevitable.

While long-term factors are attractive, Affle will see near-term disruptions from the pandemic due to significant drop in digital ad spend since early March in the online travel space (OTA), which contributed high-single digit revenues for the company and sharp drop in e-commerce activity, Nomura said.

After a call with Affle management, Sharekhan said the company’s top brass highlighted that certain sectors, which are deeply impacted contribute less than 10 per cent of the company’s revenue.

E-commerce , which constitutes 30 per cent of its total revenue, is impacted in India owing to lockdown restrictions, though the management believes it would recover strongly once the situation normalises.