Affle’s Q4 margin slips as costs outpace revenue
Revenue grew 20.28% year on year, while a higher tax rate and other income equal to 14.37% of pre-tax profit shaped earnings quality.
Filed 09 May 2026, 17:55 IST · after market close · Affle 3i Ltd (AFFLE)
Key takeaways
- Affle’s consolidated Q4FY26 operating margin fell 0.48 percentage points sequentially to 22.25% as expenses grew 1.58% against 0.96% revenue growth.
- Consolidated revenue rose 20.28% year on year, but the 2.47-percentage-point increase in the tax rate limited net-profit growth to 15.96%.
- The stock gained 8.71% in the initial reaction, well above its 2.12% median move after the previous eight results, before slipping 3.33% by the fifth session.
Price around the results
Revenue growth stayed ahead on a yearly basis
Affle reported consolidated revenue growth of 20.28% year on year in Q4FY26, with operating profit increasing 20.31%. Management said India and emerging markets grew 21.2%, while developed markets grew 18.0%; it also said conversions grew year on year in every quarter shown through Q4FY26. The company’s 22.25% operating margin was 2.56 percentage points above the 19.69% median for the 19 Information Technology peers that had reported.
Sequential margin decline reflects faster expense growth
Quarter on quarter, revenue increased 0.96% but expenses grew 1.58%, narrowing operating margin by 0.48 percentage points. This reversed three consecutive quarterly increases in margin from Q3FY25 through Q3FY26. Year on year, expenses grew almost in line with revenue at 20.27%, leaving margin broadly unchanged, up 0.01 percentage points.
Tax and other income mattered more to reported profit
The consolidated tax rate rose 2.47 percentage points year on year to 19.25%, so net profit growth of 15.96% lagged pre-tax profit growth of 19.51%. Interest expense fell 58.61%, helping offset the higher tax burden. Other income contributed 14.37% of pre-tax profit, making a material contribution outside operations.
Management is adding privacy and fraud-prevention technology
Management said Affle is developing technology intellectual property focused on privacy and advertising fraud. The company also said its research and development is directed toward building a strong patent portfolio. These initiatives extend beyond the quarter’s reported growth and identify technology development as an area to track alongside operating performance.
Initial market reaction was unusually positive, then faded
The stock rose 8.71% in the initial reaction and was up 5.24% after one session. That first move was well above the 2.12% median absolute move across the previous eight results, which were evenly split between four rises and four falls. The stock was down 3.33% by the fifth session and 2.70% by the 30th session.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹724 cr | ₹717 cr | +0.96% | +20.28% |
| Other income | ₹21 cr | ₹18 cr | +21.33% | +12.48% |
| Expenses | ₹563 cr | ₹554 cr | +1.58% | +20.27% |
| Operating profit | ₹161 cr | ₹163 cr | -1.15% | +20.31% |
| Operating margin (%) | 22.25% | 22.73% | — | — |
| Interest | ₹1 cr | ₹1 cr | -19.84% | -58.61% |
| Depreciation | ₹33 cr | ₹33 cr | +0.72% | +25.77% |
| Profit before tax | ₹148 cr | ₹146 cr | +1.29% | +19.51% |
| Tax | ₹29 cr | ₹27 cr | +6.34% | +37.09% |
| Net profit | ₹120 cr | ₹119 cr | +0.16% | +15.96% |
| EPS (₹) | ₹8.51 | ₹8.50 | +0.12% | +15.78% |
Operating margin of 22.25% compares with a Information Technology sector median of 19.69% across 19 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +8.71% | +10.20% |
| Next session | +5.24% | — |
| 5 sessions | -3.33% | -1.15% |
| 15 sessions | -0.49% | — |
| 30 sessions | -2.70% | — |
Volume on the results session was 29.91× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- India and emerging markets grew 21.2% year on year in Q4 FY2026, while developed markets grew 18.0%.
- Affle reported year-on-year growth in conversions in every quarter shown through Q4 FY2026.
New initiatives
- Affle is developing technology intellectual property focused on privacy and advertising fraud.
- Affle is focusing its research and development on a strong patent portfolio.
What to watch
- Whether consolidated operating margin recovers from 22.25% after the sequential decline of 0.48 percentage points.
- Whether revenue growth stays near the 20.28% year-on-year pace while expenses remain aligned with growth.
- Whether the tax rate moves below 19.25% and other income remains below its 14.37% share of pre-tax profit.