Affle India shares rally 7% as Citi initiates coverage with 'Buy'. Here's stock price target 

Affle India Ltd saw its shares rallying up to 7 per cent in Tuesday's trade, as foreign brokerage Citi initiated coverage on the stock with 'Buy' rating, as it believes Affle India is well positioned to benefit from recovery in mobile-ad budgets for user acquisitions across digital-first and omnichannel businesses. In a article dated July 8, Citi said Affle India's return on equity (RoE) focused M&A strategy -- recent acquisition: YouAppi, should see business turnaround in large developed markets like the US. 

Affle is an integrated platform for mobile marketing, which leverages its database and algorithms to deliver online conversions to advertisers. On Tuesday, the stock rose 6.68 per cent to hit a high of Rs 1,461.10 on BSE.

Citi expects Affle India to report a topline growth of 20 per cent compounded annually over FY24-27 and sees 400 basis points EBIT margin expansion over the same period. Affle India though is not on top of Citi's pecking order. Among India listed players It likes Zomato, following by Delhivery and then Affle India. The foreign brokerage also likes midcap stock Cartrade.    

"Our target price is based on 48 times FY26 PE – multiple at a 50 per cent premium to global ad-tech peers (35 per cent/10 per cent discount to largecap/midcap India internet). While scale is important in Adtech (Affle is one of the smaller players versus higher PE competitors), exposure to growth market/sub-segments and higher than average expected growth justifies its premium multiple, in our view," Citi said.

Citi expect Affle India's FY25 to benefit from the post-integration unlock of synergies from YouAppi in the developed markets. "The company may see benefits from exposure to CTV through Mediasmart. In India, as the funding environment gradually improves for start-ups, digital-native companies may start to acquire new customers more aggressively (2HFY25). Key near-term upside triggers: faster recovery in India and margins reversion to 20 per cent-plus," it said.

Citi has a base case target of Rs 1,600 on the stock, a bull case target of Rs 1,850 and a bear case target of 950 on the stock.