Shares of Affle India shot up 4% on Tuesday morning after Citi initiated coverage on the scrip with an upbeat call.

Brokerage Views: Citi gave the stock a “buy" call with a target price of ₹1,600, indicating an upside of 19%. The brokerage expects a 20% top line (revenue) compound annual growth rate (CAGR) over FY24-27 and expects the margin to expand over 400 basis points in the same period. 

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The company is well-positioned to benefit from a recovery in mobile-ad budgets for user acquisitions in digital-first and omnichannel businesses in India and other emerging markets. Its return on equity-focused mergers and acquisition strategy with the recent acquisition of YouAppi is expected to see a business turnaround in large developed markets like the US, said the brokerage firm. 

The company has several business advantages and is positioned as one of the alternatives in the walled garden where Facebook and Alphabet, the parent company of Google are operating. Its key competitive advantages are verticalisation where it focuses on select high-growth sectors, conversion-based business model where customers pay for performance and data advantage in emerging markets. 

Price Action: Shares of Affle India rose 4.06% to ₹1,424 on Tuesday morning.  The stock also hit its 52-week high of ₹1464.95 in the session.

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