“SUBSCRIBE” to Affle (India) Ltd.

Outcome based scalable business model with operating leverage potential

Salient features of the IPO: • Mobile marketing company Affle (India) Ltd. (Affle), the Indian unit of

Microsoft-backed Affle Holding Pte. Ltd., is planning to raise up to Rs. 4,590mn through an IPO, which will open on 29th Jul. and close on 31st Jul. 2019. The price band is Rs. 740 - 745 per share.

• The issue is a combination of fresh and OFS. The company will not receive any proceeds from the OFS. Of the net proceeds from the fresh issue, around Rs. 690mn, would be utilized to fund the future working capital requirement, while the rest would be utilized for general corporate purposes.

Key competitive strengths: • Consumer Platform has a leading position in India; a high growth

market with substantial barriers to entry • Proven international track record • Profitable, low-cost business model built on an asset light, automated

and scalable platform • Deep data-driven understanding of consumer intent and behavior • Growth driven, global customer base • Experienced and dedicated key management personnel, who are ably

supported by other employees Risk and concerns: • Slowdown in global economic expansion • Lower growth in relatively high margin developed and other

emerging countries • Highly dependent on top customer and top-ten customers for

business • Poor expansion in the recently acquired businesses • Unexpected rise in the inventory and data costs • Competition Peer comparison and valuation: There is no listed entity in India comparable to the business profile of Affle. At the higher price band of Rs. 745 per share, the company’s share is valued at a TTM standalone P/E multiple of 113.9x (to its restated TTM EPS of Rs. 6.5).

27th Jul. 2019

1

Recommendation SUBSCRIBE Price Band (Rs.) Rs. 740 - 745 per Share Face Value (Rs.) Rs. 10 Shares for Fresh Issue (mn) 1.21 - 1.22mn Shares Shares for OFS (mn) 4.95mn Shares Fresh Issue Size (Rs. mn) Rs. 900mn OFS Issue Size (Rs. mn) Rs. 3,665.2 - 3,690mn

Total Issue Size (Rs. mn) 6.16 - 6.17mn Shares (Rs. 4,565.2 - 4,590mn)

Bidding Date 29th Jul. – 31st Jul. 2019 MCAP at Higher Price Band Rs. 18,995mn Enterprise Value at Higher Price Band Rs. 17,995mn

Book Running Lead Manager ICICI Securities Ltd. and Nomura Financial Advisory & Securities (India) Pvt. Ltd.

Registrar Karvy Fintech Pvt. Ltd. Sector/Industry Internet Software & Services

Promoters Mr. Anuj Khanna Sohum and Affle Holdings Pte. Ltd.

Pre and post - issue shareholding pattern Pre – Issue Post - Issue

Promoter & Promoter Group 92.17% 68.38% Public 7.83% 31.62% Total 100.00% 100.00% Retail application money at higher cut-off price per lot Number of Shares per Lot 20 Application Money Rs. 14,900 per Lot Analyst Rajnath Yadav Research Analyst (022 - 6707 9999; Ext: 912) Email: rajnath.yadav@choiceindia.com Below are few key observations of the issue: (continued in next page)

• Affle is a global technology company. It is mainly engaged into delivering consumer acquisitions for B2C companies through relevant mobile advertising with a proprietary consumer intelligence platform i.e. Consumer Platform. This platform aims to enhance return on marketing spend through contextual mobile ads and reducing digital ad frauds.

• In FY19, the Consumer Platform contributed 97.2% of the consolidated revenue. Affle primarily earn revenue from its Consumer Platform on a cost per converted user (CPCU) basis, which comprises user conversions based on consumer acquisition and transaction models. Its Consumer Platform also earns revenue through awareness and engagement type advertising, which comprises cost per thousand impressions (CPM), cost per view (CPV) and cost per click (CPC) models.

• On standalone basis, it generates over 90% of the business from domestic market. On consolidated basis, the company generates around 44% of the business from the domestic market and rest from overseas market like (the other emerging and developed markets).

• As of 31st Mar. 2019, Affle’s Consumer Platform had approximately 2.02bn consumer profiles, of which approximately 571mn were in India, 582mn were in other emerging markets and 867mn were in developed markets. In FY19, this platform has accumulated over 300bn data points.

• Affle’s Consumer Platform is supported by a flexible & scalable infrastructure and built in-house using cloud computing infrastructure. This platform consists of proprietary machine and deep learning algorithm for prediction and recommendation that operates in real time and at significant scale. Over time, with getting more marketing budgets and delivered advertisements, the platforms data assets have grown. As a result, the accuracy of prediction and recommendation algorithm of the Consumer Platform has improved, enabling it to deliver even more precisely targeted and personalized advertisements. As Affle’s ability to generate actions improves with increased user intelligence and targeting, it will be attracted to more businesses, which would increase their marketing spend with the company. According to the management, this network effect will continue to fuel its future growth.

• In domestic market it a leading ad-tech solution provider. Affle is one of the very few companies that have products across the entire digital advertising value chain spanning from data management platforms, demand side platforms/ supply side platform, fraud detection and ad network. With the acquisition of various companies in last couple of years, it has further increased its breadth of service offerings, especially to e-commerce and mobile app driven companies.

• The ad tech market in India is fast growing, with a market size of USD 304.9mn in 2017 and is likely to grow at a 39% CAGR to USD 808mn by 2022. Affle with its leading position is expected to benefit from the same. Also the domestic market is characterized by its unique challenges like disjointed demographics, lower digital applications and lower CPCU. Affle’s with its service across the digital advertisement, extensive consumer profile data, proprietary scalable technology and ability to generate profitability in low CPCU market, would acts as a high entry barrier for a new player.

© CHOICE INSTITUTIONAL RESEARCH

Peer comparison and valuation (Contd…):

• Global ad tech market is also expected to grow at 10% CAGR from USD 34bn in FY17 to USD 54bn in FY22. The global advertising technology market is highly competitive, with multiple regional and global players. Although it is dominated by digital giants such as Google and Facebook, there are over a hundred companies who offer one or more components of this solution. However, only a few - such as Affle, InMobi, Criteo, The Trade Desk, FreakOut, Mobvista and YouAppi - operate internationally. According to Frost & Sullivan, among the core ad tech vendors in the market, very few, such as Affle and Criteo, have their own datasets of over a billion customer profiles. Thus in global market also, the company is adequately placed to benefit from the growth in the advertising spends.

• Global advertising spend is managed largely through six major advertising agency groups, with which Affle is currently working. Also it is working with other mobile focused advertising agencies in the domestic and global markets. Affle had run mobile advertising campaigns for some of the largest e-commerce and mobile App companies / brands in the world, such as Amazon, Flipkart, Goibibo, Zee, Dunzo, Dailyhunt, Meesho, Games 24x7, Shipt, Jabong, BookMyShow, Wynk, ALTBalaji, PhonePe, Gojek, Spotify, Sivvi, and well-known companies in other industries such as Airtel, Reckitt Benkiser, Johnson & Johnson, McDonalds, Nissan, Air Asia, Axis Bank, Citibank, and BTPN.

• Coming to the financial performance, Affle has shown improvement in the performance. It reported a 31.6% CAGR rise in standalone operating revenue over FY15-19 to Rs. 1,177.9mn in FY19. Top-line growth was primarily aided by 28.6% CAGR rise in the business from the Consumer Platform. This business contributed an average of around 92% to the total revenue over FY15-19. EBITDA increased by 91.3% CAGR over FY15-19 to Rs. 247.5mn. EBITDA margin expanded from 4.7% in FY15 to 21% in FY19. PAT increased by 64.9% CAGR to Rs. 166.8mn in FY19. PAT margin expanded from 5.7% in FY15 to 14.2% in FY19. The company had a positive standalone operating cash flow over FY15-19, which increased by 152.5% CAGR to Rs. 175.3mn in FY19. Average standalone RoIC and RoE over FY15-19 was 26.1% and 26.5%, respectively.

• Going forward, Affle is expected to benefit from operating leverage i.e. higher productivity. We believe it has a set infrastructure and only need to ramp-up its platform with more services and accuracy in the deliveries, which in turn will attract move advertisers and companies. In the past two fiscal, it has benefited from higher employee productivity (i.e. employee cost as a percent of revenue has declined from 26.9% in FY17 to 16.6% in FY19) and going forward too is expected to benefit from the same.

• Based on our quick estimate, we are forecasting a 26.2% rise in revenue in FY20E to Rs. 1,486.4mn. EBITDA and PAT margin are expected at 24% and 15.8%, respectively, in FY20E as against respective margins of 21% and 14.2% in FY19. Similarly, FY21E top-line is forecasted to be at Rs. 2,010.5mn (a growth of 35.3% over FY20E), while EBITDA and PAT margin are anticipated to be at 24.5% and 16.2%, respectively.

• Affle is a part of Singapore based Affle Holdings Pte. Ltd. (AHPL), which through its subsidiaries is engaged in the business of research and experimental development on IT & product development for mobile software & technology. AHPL is backed by prominent investors like Microsoft Global Finance (stake 6.23%), D2c Inc. (9.09%), Bennett, Coleman & Co. Ltd. (5.19%), Itochu Corporation (3.78%), Centurion Private Equity Ltd. (2.08%) etc. (Source: RHP). AHPL and other group companies has pre-ipo stake of 92.17%, which post-ipo would decline to 68.38% in Affle.

• As a part of pre-ipo placement, in FY19 Affle has offloaded a minority stake of 7.82% to Malabar Investments for a consideration of Rs. 1,367.3mn. Post-ipo, the stake of Malabar investments would decline to 7.46%.

• Estimated valuation of Affle during the stake sale to Malabar Investments was around USD 375mn. However, with this IPO, Affle is demanding a valuation of Rs. 18,995mn (USD 275.7mn). Lower valuation can be primarily attributed to subdued global economic outlook and negativity in the domestic equity capital markets. Nevertheless, the fundamental of the company is intact and is expected to excel both in the domestic and global markets.

• There is no listed entity in India comparable to the business profile of Affle. The above peers are the global peers for reference. At the higher price band, Affle is demanding a standalone P/E valuation of 113.9x (to its FY19 EPS of Rs. 6.5), which at a premium to its peers (i.e. The Trade Desk, Inc. and Mobvista Inc., selected based on the business model and profitability margins) average of 68.6x. However, based on its FY19 consolidated financials, Affle is demanding a P/E valuation of 38.9x and is discount to the peer average.

Thus, considering the growth outlook coupled with dominant domestic market position and expected benefit from the operating leverage, we assign a “SUBSCRIBE” rating for the issue.

Note: All financials and ratio based on FY19 data or TTM; Data in their respective currency; Source: Choice Broking Research

Company Name Currency CMP (Rs.)

MCAP (Rs. mn)

EV (Rs. mn)

Total Operating Revenue (Rs. mn)

EBITDA (Rs. mn)

PAT (Rs. mn)

EBITDA Margin (%)

PAT Margin (%)

Affle (India) Ltd. INR 745 18,995 17,995 1,177.9 247.5 166.8 21.0% 14.2% The Trade Desk, Inc. USD 255 9,826 9,619 512.6 122.0 89.2 23.8% 17.4% Mobvista Inc. HKD 4 5,830 5,453 3,407.2 277.3 215.7 8.1% 6.3% Average 16.0% 11.9%

Company Name EPS (Rs.)

BVPS (Rs.)

DPS (Rs.)

Debt Equity Ratio

Fixed Asset Turnover

Ratio

RoE (%)

RoCE (%)

P / E (x)

P / B (x)

EV / Sales (x)

EV / EBITDA

(x)

MCAP / Sales (x)

Earning Yield (x)

Affle (India) Ltd. 6.5 53.4 0.0 0.0 4.6 12.2% 14.7% 113.9 13.9 15.3 72.7 16.1 0.9% The Trade Desk, Inc. 2.3 10.2 0.0 0.0 18.1 22.6% 28.2% 110.2 24.9 18.8 78.8 19.2 0.9% Mobvista Inc. 0.1 1.2 0.0 0.1 9.9 11.9% 14.8% 27.0 3.2 1.6 19.7 1.7 3.7% Average 0.0 0.0 14.0 17.2% 21.5% 68.6 14.1 10.2 49.3 10.4 2.3%

Offer Opens on 29-Jul-2019

Offer Closes on 31-Jul-2019

Finalization of Basis of Allotment 05-Aug-2019

Unblocking of ASBA Account 06-Aug-2019

Credit to Demat Accounts 07-Aug-2019

About the issue: • Affle is coming up with an initial public offering (IPO) with around 6.16 - 6.17mn shares (fresh issue: 1.21 - 1.22mn

shares; OFS shares: 4.95mn shares) in offering. The offer represents around 24.16% of its post issue paid-up equity shares of the company. Total IPO size is Rs. 4,565.2 - 4,590mn.

• The issue will open on 29th Jul. 2019 and close on 31st Jul. 2019.

• The issue is through book building process with a price band of Rs. 740 - 745 per share.

• The issue is a combination of fresh and OFS. The company will not receive any proceeds from the OFS. Of the net proceeds from the fresh issue, around Rs. 690mn, would be utilized to fund the future working capital requirement, while the rest would be utilized for general corporate purposes.

• 75% of the net issue shall be allocated on a proportionate basis to qualified institutional buyers, while rest 15% and 10% is reserved for non-institutional bidders and retail investors, respectively.

• Promoter holds 92.17% stake in the company and post-IPO this will come down to 68.38%. Public holding will increase

from current 7.83% to 31.62%.

Pre and post issue shareholding pattern (%)

Pre Issue Post Issue (at higher price band)

Promoter & Promoter Group (%) 92.17% 68.38%

Public (%) 7.83% 31.62%

Source: Choice Equity Broking

Indicative IPO process time line:

Commencement of Trading 08-Aug-2019

Company introduction: Affle is a global technology business. It has two business segments: Consumer Platform; and Enterprise Platform. Consumer Platform primarily provides the following services: (1) new consumer conversions (acquisitions, engagements and transactions) through relevant mobile advertising; (2) retargeting existing consumers to complete transactions for e-commerce companies through relevant mobile advertising; and (3) an online to offline (O2O) platform that converts online consumer engagement into in-store walk-ins. Enterprise Platform primarily provides end-to-end solutions for enterprises to enhance their engagement with mobile users. Its Consumer Platform comprises the following: • “Affle” branded consumer intelligence platform that deliver consumer acquisitions, engagements and transactions

through relevant mobile advertising; • “RevX” branded mobile only self-serve programmatic platform that delivers consumer acquisitions, engagements and

transactions through relevant mobile advertising; • “Vizury” branded retargeting media business for e-commerce companies and its push notifications offerings for e-

commerce companies on a software as a service model; and • “Shoffr” branded online-to-offline platform that converts online consumer engagement into in-store walk-ins and

transactions. Consumer Platform aims to enhance returns on marketing spend through delivering contextual mobile ads and reducing digital ad fraud, while proactively addressing consumer privacy expectations. As at 31st Mar. 2019, this platform had approximately 2.02bn consumer profiles, of which approximately 571mn were in India, 582mn were in other emerging markets (which comprises Southeast Asia, the Middle East, Africa and others) and 867mn were in developed markets (which comprises North America, Europe, Japan, Korea and Australia). During FY19, Affle’s Consumer Platform accumulated over 300bn data points, which powers the prediction and recommendation algorithm of the platform. The company is in the process of integrating the consumer profiles and the related consumer data points of the Vizury Commerce Business, the RevX Platform and the Shoffr Platform with its Consumer Platform. This platform is used by business to consumer companies across industries, including e-commerce, fin-tech, telecom, media, retail and FMCG companies, both directly and indirectly through their advertising agencies. Affle’s Consumer Platform utilizes user-intent indicators derived from behavioral signals, marketing attribution and transactional data, which are received in real time and accumulated over time, which increases its ability to predict a user’s likely interests. The accuracy of the prediction and recommendation algorithms of the platform improve with every advertisement the company delivers, as the systems incorporate new data, while continuing to learn from previous data. In addition, the platform enhances its customer’s ad content with rich media experiences, including interactive videos, games and augmented reality. This paired with data-centric scientific targeting and retargeting enables a higher likelihood of consumer engagement, such as downloading an App or completing a transaction. In FY19 on a proforma basis, Affle’s revenue from Consumer Platform contributed 97.2% of its revenue from contracts with customers. While on a consolidated basis, the revenue from Consumer Platform contributed 97% of the revenues. The company primarily earns revenue from the Consumer Platform on a CPCU basis, which comprises user conversions based on consumer acquisition and transaction models. Affle’s consumer acquisition model focuses on acquiring new consumers for businesses, which is usually in the form of a targeted user downloading and opening an App or engaging with an App after seeing an advertisement delivered by it. While its transaction model is usually in the form of a targeted user submitting a lead acquisition form or purchasing a product or service after seeing an advertisement delivered by it. The company also earns revenue from this platform through awareness and engagement type advertising, which comprises CPM, CPV and CPC models. These models are relevant for brand advertisers who want to build awareness and recall & engage users online to transact with them offline/online.

Company introduction (Contd…): The company understand its customer’s business drivers and work with them to choose audience engagement models that are the most relevant for them, thereby delivering measurable business outcomes for them. Its Consumer Platform benefits from broad access to mobile ad inventory through its relationships with publishers and data platforms. Affle encourages publishers to provide it with access to their mobile ad inventory by offering a platform through which they can tap into advertiser’s marketing budgets and manage their inventory yields. It also have access to mobile display advertising inventory through real-time-bidding advertising exchanges. For each campaign, Affle bids for the consumer profiles, which it believe have a higher likelihood to transact on the basis of its data intelligence. Its proprietary optimization algorithms enable it to buy media efficiently and at high scale, giving it the ability to drive high volumes of CPCU-led campaigns at efficient prices. Affle also provides end-to-end solutions for enterprises to enhance their engagement with mobile users, such as developing apps, enabling offline to online commerce for offline businesses with e-commerce aspirations and providing enterprise grade data analytics for online and offline companies. In FY19 on a proforma basis, its revenue from the Enterprise Platform represented 2.8% of the revenue from contracts with customers. While on consolidated basis, in FY19, business from the Enterprise Platform represented 3% of its revenue. Its solutions are sold through sales and marketing team, which as at 31st May 2019 comprised of 51 persons across six offices, one sales agent in Malaysia and through referrals from existing customers. Affle’s customers includes the companies for which it undertakes a mobile ad campaign as well as the advertising agencies acting for such companies. The company has three registered patents in the United States with multiple patent claims in areas of advertising via data communication clients, online search system, method & computer programme and method & system for extending the use and/or application of messaging system. It also have 10 pending patent applications in India covering various algorithms in the area of digital fraud detection. As part of its acquisition of the Vizury Commerce Business, the company acquired two pending patent applications in India and three pending patent applications in the United States, only one of which it intends to pursue, which is in the field of partner pixelling for user identification.

Source: Company Presentation

Company introduction (Contd…):

Source: Company Presentation

Company introduction (Contd…): Financial performance: Affle reported a 31.6% CAGR rise in standalone operating revenue over FY15-19 to Rs. 1,177.9mn in FY19. Top-line growth was primarily aided by 28.6% CAGR rise in the business from the Consumer Platform. This business contributed an average of around 92% to the total revenue over FY15-19. In FY19, the company undertook corporate restructuring and also acquired Vizury Commerce Business in India. Its consolidated revenue for FY19 stood at Rs. 1,177.9mn. Inventory and data costs increased by 21.9% CAGR over FY15-19. However, with the increase in the business efficiency, as a percent of top-line it declined from 71.7% in FY15 to 52.9% in FY19. Employee cost increased by 38.2% CAGR. In the last three years, mainly due to operating leverage, this expenses as a percent of top-line declined from 26.9% in FY17 to 16.6% in FY19. Other expenses increased by 29.9% CAGR, thereby leading to a 91.3% CAGR rise in standalone EBITDA over FY15-19 to Rs. 247.5mn. EBITDA margin expanded from 4.7% in FY15 to 21% in FY19. Consolidated EBITDA stood at Rs. 703.1mn in FY19, with a margin of 28.2%. Depreciation charge increased by 154.6% CAGR, while finance cost increased by 32.1% CAGR over FY15-19. Consequently, standalone PAT increased by 64.9% CAGR to Rs. 166.8mn in FY19. PAT margin expanded from 5.7% in FY15 to 14.2% in FY19. Consolidated PAT stood at Rs. 488.2mn in FY19, with a margin of 19.6%. The company had a positive standalone operating cash flow over FY15-19, which increased by 152.5% CAGR to Rs. 175.3mn in FY19. Average standalone operating cash flow during FY15-19 was around Rs. 94mn.Consolidated operating cash flow in FY19 was at Rs. 477.9mn. Average standalone RoIC and RoE over FY15-19 was 26.1% and 26.5%, respectively.

Source: Choice Equity Broking

(Rs. mn) FY15 FY16 FY17 FY18 FY19 FY19 Consolidated CAGR (%) Y-o-Y (%)

Revenue from Contracts with Customers 393.3 724.3 656.3 837.6 1,177.9 2,494.0 31.6% 40.6% EBITDA 18.5 57.1 35.2 167.7 247.5 703.1 91.3% 47.6% Reported PAT 22.5 50.1 3.3 88.3 166.8 488.2 64.9% 88.9%

Restated Adjusted EPS 0.9 2.0 0.1 3.5 6.5 19.1 64.9% 88.9%

Cash Flow from Operating Activities 4.3 58.2 58.3 174.0 175.3 477.9 152.5% 0.7% NOPLAT 16.2 45.5 9.4 89.5 150.7 499.3 74.6% 68.5% FCF (18.0) 35.3 (13.7) 185.6 -1452.9%

RoIC (%) 20.3% 31.7% 4.7% 29.6% 44.0% 61.6% 2,131 bps 4,866 bps

Revenue Growth Rate (%) 84.2% -9.4% 27.6% 40.6% EBITDA Growth Rate (%) 208.8% -38.3% 376.0% 47.6% EBITDA Margin (%) 4.7% 7.9% 5.4% 20.0% 21.0% 28.2% 16.3% 1.0% EBIT Growth Rate (%) 212.7% -77.7% 1015.4% 50.1% EBIT Margin (%) 4.4% 7.5% 1.9% 16.2% 17.3% 24.1% 12.8% 1.1% Reported PAT Growth Rate (%) 122.2% -93.4% 2576.1% 88.9% Reported PAT Margin (%) 5.7% 6.9% 0.5% 10.5% 14.2% 19.6% 8.4% 3.6%

Trade Receivable Turnover Ratio (x) 1.8 3.9 4.6 5.7 5.5 5.2 33.0% -3.4% Accounts Payable Turnover Ratio (x) 2.3 2.9 1.8 2.2 2.3 4.8 -0.5% 2.6% Fixed Asset Turnover Ratio (x) 61.9 13.1 4.5 5.5 4.6 4.2 -47.7% -16.2% Total Asset Turnover Ratio (x) 1.4 1.7 1.3 1.4 1.3 1.6 -2.0% -12.8%

Current Ratio (x) 1.4 1.4 1.2 1.6 1.2 1.3 -3.2% -23.6% Debt to Equity (x) 0.0 0.3 0.2 0.0 0.0 0.1 Net Debt to EBITDA (x) (1.0) (0.4) (1.5) (0.9) (0.4) (0.3) -21.1% -53.5%

RoE (%) 27.6% 38.0% 1.6% 29.3% 36.0% 67.4% 842 bps 677 bps RoA (%) 7.8% 11.8% 0.7% 15.2% 17.8% 30.8% 1,002 bps 0.0260 RoCE (%) 20.4% 30.3% 5.4% 43.3% 42.3% 74.2% 2,188 bps (98) bps

© CHOICE INSTITUTIONAL RESEARCH

Competitive strengths: • Consumer Platform has a leading position in India; a high growth market

with substantial barriers to entry • Proven international track record • Profitable, low-cost business model built on an asset light, automated and

scalable platform • Deep data-driven understanding of consumer intent and behavior • Growth driven, global customer base • Experienced and dedicated key management personnel, who are ably

supported by other employee

Business strategy:

• Enhance Consumer Platform’s revenue from existing and new customers in India and acquire new consumer profiles beyond Tier 1 cities

• Expand international business through local business development efforts and through referrals from existing customers

• Drive further penetration among top customers and deliver more converted users for large e-commerce companies

• Continue to invest in and develop technological capabilities • Selectively pursue acquisitions • Cross-sell the consumer and enterprise solutions

Risk and concerns:

• Slowdown in global economic expansion • Lower growth in relatively high margin developed and other Asian

countries • Highly dependent on top customer and top-ten customers for

business • Poor expansion in the recently acquired business • Unexpected rise in the inventory and data costs • Competition

© CHOICE INSTITUTIONAL RESEARCH

Financial statements:

Standalone profit and loss statement (Rs. mn)

FY15 FY16 FY17 FY18 FY19 FY19 Consolidated

CAGR over FY15 - 19 (%)

Annual Growth

over FY18 (%)

Revenue from Contracts with Customers 393.3 724.3 656.3 837.6 1,177.9 2,494.0 31.6% 40.6%

Inventory and Data Costs (281.8) (518.4) (323.8) (424.3) (622.9) (1,341.1) 21.9% 46.8% Employee Benefits Expenses (53.6) (70.8) (176.2) (159.5) (195.5) (212.3) 38.2% 22.5% Other Expenses (39.4) (78.0) (121.1) (86.1) (112.1) (237.5) 29.9% 30.1% EBITDA 18.5 57.1 35.2 167.7 247.5 703.1 91.3% 47.6% Depreciation and Amortization Expenses (1.1) (2.6) (23.1) (32.1) (44.1) (101.0) 154.6% 37.3% EBIT 17.4 54.5 12.2 135.5 203.4 602.2 84.8% 50.1% Finance Costs (1.5) (8.7) (15.9) (10.8) (4.5) (8.1) 32.1% -58.5% Other Income 1.3 2.7 11.7 11.2 36.5 4.0 130.2% 225.4% PBT 17.3 48.5 8.0 136.0 235.4 598.0 92.1% 73.2% Tax Expenses 5.3 1.5 (4.7) (47.7) (68.6) (109.8) 44.0% Reported PAT 22.5 50.1 3.3 88.3 166.8 488.2 64.9% 88.9%

Standalone balance sheet statement (Rs. mn)

FY15 FY16 FY17 FY18 FY19 FY19 Consolidated

CAGR over FY15 – 19

(%)

Annual Growth over

FY18 (%) Equity Share Capital 158.2 158.2 242.9 242.9 242.9 242.9 11.3% 0.0% Other Equity (76.7) (26.6) (32.6) 58.8 219.8 481.2 274.0% Long Term Borrowings 42.8 5.3 69.2 Non Current Provisions 3.8 5.5 9.1 11.4 15.4 15.4 41.9% 34.6% Non Current Deferred Tax Liabilities (Net) 2.7 2.7 Short Term Borrowings 28.3 20.8 Contract Liabilities 1.0 3.4 2.5 6.8 -26.9% Current Trade Payables 168.5 190.7 160.1 220.2 323.7 517.1 17.7% 47.0% Other Current Financial Liabilities 59.7 24.9 104.5 198.8 319.8% Short Term Provisions 3.5 2.8 1.5 1.1 1.4 3.5 -21.1% 28.0% Other Current Liabilities 31.3 50.9 11.6 17.6 23.0 24.5 -7.4% 30.6% Total Liabilities 288.7 424.4 486.9 580.3 935.9 1,582.7 34.2% 61.3%

Property, Plant and Equipment 1.3 1.7 3.6 3.7 6.6 7.5 49.9% 78.7% Intangible Assets 5.1 11.1 80.1 88.2 94.7 240.2 108.1% 7.4% Goodwill 59.2 59.2 134.4 325.3 126.8% Tangible / Intangible Assets Under Development 42.6 3.1 18.0 18.0

Investment in Subsidiary 138.2 Non Current Investments 0.2 0.3 0.3 0.3 0.0% Non Current Loans and Advances 1.6 32.1 6.3 5.8 0.1 0.8 -54.3% -98.8% Non Current Deferred Tax Assets (Net) 4.0 4.6 19.0 4.9 -100.0% -100.0% Other Non Current Assets 0.3 0.1 -100.0% Current Investment Contract Assets 38.9 77.2 96.5 131.9 25.0% Current Trade Receivables 223.5 147.9 135.3 158.2 269.3 478.8 4.8% 70.2% Other Current Financial Assets 0.1 0.1 12.5 29.0 12410.0% Cash and Cash Equivalents 19.2 68.3 87.5 144.9 99.4 304.9 50.9% -31.4% Short Term Loans and Advances 21.5 47.6 0.4 1.6 7.6 10.8 -22.8% 370.4% Current Tax Assets (Net) 28.5 24.4 36.2 11.6 48.5% Other Current Assets 12.7 68.6 24.5 11.7 22.3 23.7 15.1% 89.8% Total Assets 288.7 424.4 486.9 580.3 935.9 1,582.7 34.2% 61.3%

Source: Choice Equity Broking

© CHOICE INSTITUTIONAL RESEARCH

Financial statements:

Note: Ratios calculated on pre-issue data; Source: Company RHP

Standalone cash flow statement (Rs. mn)

Particulars (Rs. mn) FY15 FY16 FY17 FY18 FY19 FY19 Consolidated

CAGR over FY15 - 19

(%)

Annual Growth over

FY18 (%) Cash Flow Before Working Capital Changes 31.6 69.9 57.6 190.4 264.3 703.3 70.0% 38.8% Change in Working Capital (25.3) (9.3) 6.1 13.1 (16.2) (137.8) -10.6% -223.4% Cash Flow from Operating Activities 4.3 58.2 58.3 174.0 175.3 477.9 152.5% 0.7% Purchase of Property , Plant & Equipment (6.6) (51.6) (32.3) (37.3) (71.5) (151.1) 81.4% 92.0% Cash Flow from Investing Activities 5.1 (78.1) (57.0) (14.0) (222.9) (501.9) 1491.8% Cash Flow from Financing Activities (1.2) 72.2 (22.1) (81.2) (4.3) 83.8 37.4% -94.7%

Net Cash Flow 8.2 52.4 (20.8) 78.8 (51.8) 59.7 -165.7% Opening Balance of Cash and Bank Balances 7.7 15.9 68.3 47.5 126.3 146.4 101.3% 166.0% Closing Balance of Cash and Bank Balances 15.9 68.3 47.5 126.3 74.5 206.1 47.1% -41.0%

Standalone financial ratios

Particulars (Rs. mn) FY15 FY16 FY17 FY18 FY19 FY19 Consolidated

Revenue Growth Rate (%) 84.2% -9.4% 27.6% 40.6% EBITDA Growth Rate (%) 208.8% -38.3% 376.0% 47.6% EBITDA Margin (%) 4.7% 7.9% 5.4% 20.0% 21.0% 28.2% EBIT Growth Rate (%) 212.7% -77.7% 1015.4% 50.1% EBIT Margin (%) 4.4% 7.5% 1.9% 16.2% 17.3% 24.1% Adjusted PAT Growth Rate (%) 122.2% -93.4% 2576.1% 88.9% Adjusted PAT Margin (%) 5.7% 6.9% 0.5% 10.5% 14.2% 19.6%

Liquidity ratios Current Ratio 1.4 1.4 1.2 1.6 1.2 1.3 Debt Equity Ratio 0.0 0.3 0.2 0.0 0.0 0.1 Net Debt to EBITDA (1.0) (0.4) (1.5) (0.9) (0.4) (0.3)

Turnover ratios Inventories Days 0.0 0.0 0.0 0.0 0.0 0.0 Debtor Days 207.4 93.6 78.8 64.0 66.2 70.1 Payable Days (218.2) (126.5) (197.7) (163.6) (159.4) (140.7) Cash Conversion Cycle (10.8) (32.9) (119.0) (99.6) (93.1) (70.7) Fixed Asset Turnover Ratio (x) 61.9 13.1 4.5 5.5 4.6 4.2 Total Asset Turnover Ratio (x) 1.4 1.7 1.3 1.4 1.3 1.6

Return ratios RoE (%) 27.6% 38.0% 1.6% 29.3% 36.0% 67.4% RoA (%) 7.8% 11.8% 0.7% 15.2% 17.8% 30.8% RoCE (%) 20.4% 30.3% 5.4% 43.3% 42.3% 74.2%

Per share data Restated Reported EPS (Rs.) 0.9 2.0 0.1 3.5 6.5 19.1 Restated DPS (Rs.) Restated BVPS (Rs.) 3.2 5.2 8.2 11.8 18.1 28.4 Restated Operating Cash Flow Per Share (Rs.) 0.2 2.3 2.3 6.8 6.9 18.7 Restated Free Cash Flow Per Share (Rs.) (0.7) 1.4 (0.5) 7.3 Dividend Payout Ratio 0.0 0.0 0.0 0.0 0.0 0.0

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