Smallcap stock: MFs, FPIs keep faith in Affle India despite steep correction; key details

Smallcap stock Affle (India) Ltd has fallen 17 per cent in 2024 so far but institutional investors such as mutual funds (MFs) and foreign portfolio investors (FPIs) kept their faith in the company intact, data compiled from corporate database AceEquity and stock exchanges suggested.

MF and FPI holdings in the company edged higher to hit records high in the quarter gone by. MFs held a record 11.18 per cent stake in Affle at the end of March quarter (up 71,730 shares) against 11.14 per cent in the December quarter. FPIs, on the other hand, held 14.79 per cent stake in the smallcap company (up 6,18,820 shares), a record high, up from 14.35 per cent.

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Nippon Life India Trustee (AC Nippon India group) owned 4.45 per cent stake in Affle India, followed by ICICI Prudential India Opportunities Fund (3.97 per cent) and Franklin India Equid Hybrid Fund (1.05 per cent). Among FPIs, GAMNAT PTE held 4.92 per cent stake in Affle India at the end of March quarter.

In its preview note on media and entertainment sector, Elara Securities said it expect Affle India to post an overall revenue of Rs 490 crore, up 37.8 per cent YoY, led by better organic growth.

Organic revenue growth may come in at 17 per cent YoY, as Emerging Markets (EM) growth, including India, has been robust despite negative impact from the real money gaming (RMG) vertical, it said. The domestic brokerage expects EM revenue growth at 23 per cent YoY).

"We expect recovery in organic revenue in Developed Markets (expect DM ex-YouAppi revenue growth of 10 per cent YoY) to continue despite the fintech vertical spend in DM taking a hit due to rate hikes. YouAppi may contribute 15 per cent to Q4FY24E revenue. We expect a 19.5 per cent Ebitda margin, flat QoQ and YoY," Affle India.

The impact from RMG vertical continues to play spoilsport for India revenue in Q4E but other verticals have offset it, Elara said.

This brokerage has an 'Accumulate' rating on the stock with a target of Rs 1,275. The stock has an average target of Rs 1,281 as per Trendlyne, which suggests a 17 per cent potential upside on the counter.