Opening Hook
In May, Affle 3i painted a picture so rosy that even Instagram filters felt insecure. They spoke of patents, AI agents, and 10x decadal growth as if they were planning to colonize Mars via adtech. Fast forward to July, and management claims the rocket is still on course, this time fueled by “hyper-contextual AI” and record-breaking case studies. But are we dealing with creamy doodh or just frothy pani? Time to filter out the froth and see if they actually walked the talk.
At a Glance – May vs July
- Revenue: May – ₹6,023 mn, fighting seasonal gravity; July – ₹6,207 mn, crawling but calling it jogging.
- Margins: May – 22.2% (EBITDA smiling); July – 22.5% (EBITDA smirked a bit wider).
- Guidance: May – “20%+ organic growth, trust us”; July – “20%+ still on, AI will make it happen.”
- Stock: May – investors yawned; July – investors mildly nodded, still sipping chai.
The Story So Far – May’s Big Promises
In May, CEO Anuj Khanna Sohum opened the call like a TEDx speaker, boasting about the new era of Affle 3i, patents galore, and a 10x growth vision. They promised 20%+ growth, flaunted CPCU dominance, and hyped AI agents as if they were assembling The Avengers. The CFO added spice by hinting at margin expansions and a cash-rich war chest ready for acquisitions. Analysts poked at seasonality, working capital, and the Netflix opportunity – management coolly served confident but unquantified answers. Essentially, May’s call was half doodh (strong numbers) and half pani (grand visions with AI sprinkles).
Management Commentary Evolution – Doodh vs Pani
| Theme | May Statement (Pani) | July Statement (Doodh/Pani) | Sarcastic Translation |
|---|---|---|---|
| Growth Outlook | “20%+ growth is sustainable; broad-based across markets.” | “20%+ growth still sustainable; AI agents now part of the prophecy.” | “We’ll hit 20%+… unless we don’t, but AI sounds cool, right?” |
| Margins | “Gradual expansion, a few bps each year.” | “Margins already at 22.5%, expanding as promised.” | “Look, we added 0.3% – champagne time!” |
| AI/Innovation | “Opticks AI, mFaaS, patents = future-proof moat.” | “AI-driven creatives scaling at exponential levels.” | “Still talking AI. Investors love buzzwords.” |
| CPCU Business | “Dominant and growing; non-CPCU moving to CPCU.” | “99.9% revenue CPCU; conversions up 17.8% y-o-y.” | “Our CPCU cow is giving full cream.” |
| Markets | “Developed markets beating seasonality, emerging markets resilient.” | “Developed markets grew 23.3%, emerging 18.1%.” | “US growth = we discovered fire. India = still burning incense.” |
| Cash Use | “₹1,300 cr cash will fuel acquisitions for 10x growth.” | “Cash still there; still looking for the perfect shopping deal.” | “We’re hoarding cash like squirrels hoard nuts.” |
| Risks | “Seasonality exists, but we beat it.” | “Seasonality still exists, but we’ll keep trying to beat it.” | “Our seasonality talk is also seasonal.” |
Numbers Face-Off – Facts Speak Louder
| Metric | May Concall (Q4 FY25) | July Concall (Q1 FY26) | Verdict |
|---|---|---|---|
| Revenue – The Hero | ₹6,023 mn | ₹6,207 mn | Genuine doodh – growth seen |
| EBITDA – The Sidekick | ₹1,340 mn (22.2%) | ₹1,397 mn (22.5%) | Strengthened – thicker milk |
| PAT – The Finisher | ₹1,031 mn (16.6%) | ₹1,055 mn (16.5%) | Stable doodh – slight froth |
| Conversions – The Volume | 104 mn | 107 mn | Pure milk – still rising |
Analyst Questions – Who Exposed the Truth?
In May, analysts grilled them on Netflix ads, anti-trust rulings, and whether AI is more than buzz. July’s analysts focused on new user vs repeat conversions, and why BD spends are still pegged to revenue. Both times, management responded with poetic confidence and tech jargon, successfully dodging any embarrassing spills. Doodh: patent and CPCU answers. Pani: vague cash deployment timelines.
Guidance – Promises vs Delivery
- May: Promised sustainable 20% growth, AI-led efficiency, and margin expansion.
- July: Delivered growth, margin tick-up, and re-iterated AI dreams. No major surprises, but no moon landings either.
- Verdict: Walked the talk so far, but still carrying the hype umbrella.
Risks & Red Flags – Filtered Out
Risks remain the same – heavy reliance on CPCU model, potential slowdown in India growth, and unclear cash utilization. July added the AI agent narrative, which could either be the next big thing or next big buzz. Seasonality talk continues to haunt.
Market Mood – Investor Reaction Filtered
- May: Stock reaction = mild, investors sipped chai.
- July: Slightly better mood, investors switched to cappuccino – foam but no fireworks.
EduInvesting Take – Doodh ka Doodh Verdict
Pure Milk (Facts):
- CPCU dominance (99.9% revenue)
- Revenue & EBITDA growth delivered
- Developed markets catching fire (23.3% growth)
Just Water (Fluff):
- Overuse of AI buzzwords
- Cash utilization promises without action
- Seasonality excuses sprinkled like coriander
Did They Walk the Talk?
Yes, but in slow motion. Affle 3i delivered numbers, added a touch of margin cream, and kept the AI hype alive. The doodh is there, but it’s not overflowing – yet.
Conclusion – The Final Pour
In July, Affle 3i served a glass with a bit more doodh and slightly less pani. The growth is real, margins are firming up, and CPCU remains their cash cow. But until they turn those AI agents and cash reserves into hard returns, investors will keep sniffing the milk before sipping. Q2 better be creamier.
Written by EduInvesting Team
Data sourced from: Company concall transcripts (May & July 2025), investor presentations, and filings.
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