Why Affle 3i Ltd Stocks Are a Buy, Despite Recent Corrections

Positive Outlook for Affle 3i Ltd

Indian brokerage firm Anand Rathi has turned bullish on Affle 3i Ltd, citing that the company's fundamentals are now aligned with its valuations after a significant stock correction in recent months.

Upgraded to 'Buy' Rating

Anand Rathi has upgraded Affle 3i Ltd to a 'Buy' rating, with a target price of ₹2,000. This implies an upside potential of about 22% from the previous closing price of ₹1,642. The firm expects the company's revenue to grow at a CAGR of 20.4% over FY26-28, driven by 18% growth in user conversions and expansion across verticals and regions.

Factors Affecting the Stock Price

The stock's sharp correction was largely driven by lower-than-estimated CPCU revenue, as advertising budgets shifted from Q2 to Q3 in the US amid tariff-related uncertainty, along with a partial impact from RMG in India. However, Anand Rathi expects the full 3% RMG impact to play out in Q3 and continue through H1FY27, partly offset by the festive season in India and a revival in developed markets.

Digital Personal Data Protection Rules

Anand Rathi does not expect any meaningful short-term impact from the Digital Personal Data Protection Rules, 2025 (DPDP-2025). However, it expects a neutral-to-positive impact over the longer term, as the company already holds ISO data security certification and Singapore's stringent DPTM data privacy certification.

Key Highlights

• Revenue growth expected at a CAGR of 20.4% over FY26-28
• EBITDA expected to grow at a CAGR of 23% over FY26-28, with margins of around 23.5%
• EPS CAGR expected at 21.5%

Risks and Disclaimer

Anand Rathi has flagged key risks, including adverse changes in data protection and privacy policies, lower marketing spending by customers, and the potential inability to turn around acquired companies. As with any investment, it's essential to consult with certified experts before making any decisions.

Despite recent corrections, Affle 3i Ltd's long-term performance remains strong, with the stock trading 123% higher over the last five-year period. With its strong fundamentals and growth prospects, Affle 3i Ltd is definitely a stock to consider for investors looking to capitalize on the AdTech and digital marketing trends.