Stocks to buy: Domestic brokerage firm Anand Rathi turned bullish on Affle 3i Ltd after noting that the company’s fundamentals are now aligning with its valuations following the stock’s steep correction in recent months.
It has upgraded the stock to a ‘Buy’ rating with an unchanged target price of ₹2,000, implying an upside potential of about 22% from the previous closing price of ₹1,642.
Anand Rathi noted that the stock’s sharp correction from recent highs 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.
The brokerage added that it expects the full 3% RMG impact ( ₹170–180 million per quarter) to play out in Q3 and continue through H1FY27, partly offset by the festive season in India and a revival in developed markets, as US marketing budgets ramp up.
Anand Rathi further said it 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.
The brokerage highlighted that this compliance combination is among the strongest in Asia and covers most requirements under India’s DPDP rules, enhancing trust, strengthening first-party data credibility, and providing strong differentiation in the AdTech ecosystem.
Overall, Anand Rathi expects revenue to grow at a CAGR of 20.4% over FY26–28, driven by 18% growth in user conversions and broad-based expansion across verticals and regions.
With continued AI adoption and automation-driven operating efficiencies, the brokerage expects EBITDA to grow at a CAGR of 23% over FY26–28, with margins of around 23.5% (up from 22.5% in FY26), resulting in an EPS CAGR of 21.5%.
Maintaining its bullish stance, Anand Rathi also 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.
Affle 3i share price trend
The company’s shares have come under intense selling pressure since hitting a new peak of ₹2,185.90 apiece in September and are currently down 25% from those levels. In November alone, the shares lost 14% of their value.
Although the stock’s short-term performance appears weak, its long-term performance still holds solid gains, as it trades 123% higher over the last five-year period.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
