Anuj Khanna Sohum, Founder, Chairman & CEO of Affle India, discusses March quarter results, business prospects in the post-COVID era, the long-term of mobile advertising, customer onboarding, and the prestige of current capital, among others, in a candid verbal exchange with Swati Khandelwal, Zee. Business. Edited excerpts:
Q: Your profit has increased by up to 24%, what are the reasons for this kind of increase?Although profits increased significantly, margins at the end decreased from 8% to 25. 3%. What led to this kind of operational performance?
A: Affle India posted 34% annualized growth in cash and earnings. As for the March quarter, our cash expansion in India was around 37% and our overseas business expansion was 26%. Overall, the expansion on a mixed basis has been quite smart (32-33%), and cash in this quarter has also been smart. On the margin side, the effects are significant on an annualized basis, but during this quarter, because we have invested heavily in overseas expansion where our operating expenses have been higher, there has been strain on our overseas activities beyond India. However, if you consider India as an independent country, the gains have been smart even from a biological point of view. But it will be noted that the impact of COVID-19 reached India in the last 10 days of March, while it reached 50% of the fourth quarter, i. e. , from February 15 to March 31, 2020, on foreign affairs. But our functionality was pretty resilient during the quarter.
Q: What are the long-term customers because the way we do business has changed so much?How do you plan to think about overall functionality if we talk about FY21 guidance, especially on the margin front, which has declined from 8% to 25. 3%?
A: If we take a look at the currency margins for Q4FY2020, they stand at 18. 3% of net profit after tax (PAT), which is quite healthy from a net attitude and can be rated as our net position. In terms of cash flow, we did very well during the year and raised more money than profits. So the monetary fundamentals have been solid. But April and May were a difficult time as most of those months were under lockdown in India. COVID is also impacting the foreign market. So this quarter, Q1 FY21, was the toughest quarter. 76% of our coins come from COVID resistant categories and I would like to classify them for simple recovery in categories E, F, G and H. Category E, which basically falls into e-commerce, entertainment and school generation ( school generation). They adopted the Internet and benefited businesses. Category F includes Fintech (money generation), consumer goods and food generation, and online users have also participated in those segments. Category G includes groceries and gaming, where significant expansion has been noted and even the government will continue spending on cell phones. Category H includes healthcare, where online usage has seen significant expansion. These 10 categories are COVID-resistant categories and generated 76% of coins for us in Q4. So we will protect it successfully, however, 24% coins of other categories suffered massive losses in April and May, however, those categories are expected to recover in the month of June. Therefore, the April to June quarter will be the most complicated quarter and the recovery will begin from June itself. The outlook therefore deserves to be positive for the rest of the year. But I would like to reserve my comment as the outlook for the rest of the year will depend on the June quarter results. But if we take a five-year quantum attitude, cell phone consumption will not decrease and people will spend a lot of time on cell phones. Therefore, businesses will have no features and cellular marketing will not be a discretionary expense for businesses and they will have to prioritize cellular service.
Q: Do you have any figures that can be shared in terms of the expansion of mobile advertising that we’ve noticed over the past few months and what expansion it can mean for your business?
A: In the last quarter, our expansion rate is higher than the industry average expansion rate. If we assume that the expansion of Indian industry peaks, our rate of expansion is higher than this figure. Even in the overseas market, if we take a look at our functionality last year, we were ahead of the industry average. It is true that average expansion rates are higher in this segment. Companies like Affle, which work with differentiated business models and take advantage of the platforms’ comparative merit, show greater expansion than the industry average. But depending on the interim era scenario, several things will replace post-COVID, in which mobile advertising will grow at an immediate rate or evolve according to the same trend that may be established after one or two more. barracks.
Q: How do you plan to increase consumers? Can you tell us what segments they come from?How many paintings do you have in preparation right now?
A: I said earlier that 76% of our profits come from the 10 most sensitive segments and we rely heavily on those categories. We successfully defended 76% of the profit of these segments during the months of April and May. Therefore, this provides a position of acceptance that you can trust, as some companies do not make any contribution. So in our case, we are lucky to do so much business on a basis of trust and as we did during the most difficult period, this is not expected to be the case in the recent future. As far as new consumers are concerned, our company is simply not founded in India, 50% of our business comes from India and the remaining 50% comes from overseas market, emerging markets. You may have noticed that we acquired several companies in an emerging market such as RevX at the beginning of the last monetary year and then Mediasmart in the March quarter. These acquisitions brought a strong dynamic of expansion to foreign activities. Therefore, there is an increase in the number of consumers. We have a team of approximately 80 people completely dedicated to sales and marketing. Our goal is to attract global consumers in categories that are COVID-resistant or whose businesses will grow in the post-COVID world.
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Q: What is your current capital at the moment?Do you have any fundraising plans in the future?
A: At this point, I can only say that since the IPO last year, the company’s monetary position, balance sheet, and money have been good. For the past six years, our money has been positive and growing steadily. Based on those factors, it’s not mandatory to have money at this time. But we have a forged opportunity because profitability and competitive balances in the sector are probably not very strong. At the same time, we’ll have to wait and see how resilient they will deal with the COVID-induced drop in activity. Therefore, if consolidation opportunities present themselves at Affle, we will use the money for this purpose.
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