C.E.Info Systems hosted a conference call on Oct 28, 2022. In the conference call the company was represented by Mr Rakesh Verma-Chairman and Managing Director and Mr Rohan Verma-CEO and Executive Director.

Key Takeaways of the call

Revenues in Q2FY2023 grew 35% YoY to Rs 76 cr.

In H1 FY2023 revenues grew 41% to Rs 141 cr as against Rs 100 cr in H1FY2022.

EBITDA margin for Q2FY2023 stood at 40%.

In H1FY2023 EBITDA grew 32% YoY to Rs 61 cr with EBITDA margin of 43% against EBITDA margin of 46% in H1FY2022.

EBITDA Margins for the core, existing business i.e. Consolidated Business (without Gtropy), grew from 46% to 50% in H1 FY23.

In H1FY2023 PAT grew 8% to Rs 50 cr with PAT margin of 32%. Other income was lower at 8 cr in Q2FY2023 and effective tax rate was higher which led to lower PAT growth in Q2FY2023.

Revenue growth was broad based across verticals and products. Automobile and mobility segment (A&M) revenue grew by 55% YoY. Auto OEM sales grew on back of strong open order and IoT sales to vehicles and fleet owners grew on expanded distribution, enterprise sales outreach and focus

Consumer Tech and Enterprise Digital Transformation(C&E) grew by 29%. Growth was on the back of strong open order and new clients’ acquisition. C&E revenue is lumpy and is a function of order book. The company is acquiring customers from blue chip space, public sector and consumer tech space. C&E vertical is in good shape.

On the products side Map and Data grew by 32% driven by customer usage across automotive, corporate and government customers; Platform & IoT grew by 49% based on increasing sales of N-CASE suite, Digital Transformation Platform, APIs &IoT to all segments of customers.

Promotional Expenses: The promotional expenses will be based on on budgeted expenses and will be incurred in such a way that the company stays in EBITDA margin band of 35%-45%. Promotional expenses will be incurred for brand promotion and some will be expended to market the products.

In order to accelerate revenue growth and earnings growth in the future, the company made 3 investments in Q2FY2023 including acquisition of Gtropy, investment in marketing activities and investment in development of product and platforms. Acquisition of Gtropy was made with a focus on a very very large multi-billion-dollar addressable market of 20+ crore existing vehicles on-road in India, which can benefit from Gtropy and MapmyIndia’s combined IoT led goods logistics & people mobility SaaS; Investment in marketing activities was done to build awareness of the MapmyIndia and Mappls brands and product portfolio, which will reap rewards in terms of new customer acquisition and new use case adoption and investment in cutting-edge product and platform development was done which will further expand use cases, addressable markets, growth engines and moats for MapmyIndiaMappls.

Gtropy: Gtropy business is in fast growth phase. H1FY2023 revenue of Gtropy was Rs 24 cr (of which Rs 8 cr was derived from MapmyIndia). Gtropy initial revenue is IoT devise led with low margin in first year, followed by high Saas subscription margin in subsequent years.

Gtropy revenue comes from both A&M and C&E verticals.

Acquisition: The company acquired 26% stake in Kogo’s for Rs 10 cr. With the integration of Kogo gamified social travel commerce platform with the company’s maps and navigation, gives a unique edge and advantage to the company’s N-CASE suite offerings for Automotive OEMs, and allows it to reach out to consumers, businesses, government, and developers with altogether new and enhanced offerings.

Acquisition will be made to add customers and use cases and to accelerate revenue. However key financial metrics will be kept in mind before making any acquisitions.

Margin Outlook: The company plans to be in the EBITDA margin band of 35-45% and if it wants to narrow the band will be in 40-45% band. With Gtrope company plans to achieve the band within next 6 months to 2-3 years.

Order Book: The company’s open order book stood at Rs 698 cr at the beginning of the year. The company has won many new orders and the pipeline is also strong.

The company has signed a new large 4-wheeler EV OEM who is one among the top 4. The company has also signed up with large cement companies, dairy companies, BFSI and Fintech companies and also with government including state, central and local governments which are related to transport and tourism.

Dividend Policy: The company has a cash balance of Rs 430 cr as on Sep 30,2022. The company plans to declare final dividend based on the annual financial performance.

Management Commentary:

Commenting on the Q2 and H1 FY23 results, Rakesh Verma, Chairman and Managing Director, MapmyIndia, said: “In Q2 FY23, MapmyIndia delivered another strong performance, with quarterly revenue up 35% year-on year to an all time high of Rs 76 cr, and H1 FY23 EBITDA up 32% YoY to Rs 61 cr , and EBITDA margin at 43%. H1FY23 PAT grew 8% YoY to 50 cr with PAT margin at 32%. We commenced 3 sets of investments in QFY23that will help accelerate the company’s growth in revenues and earnings in future. First, in growing the scale of our recently acquired IOT- led business, Gtrop, which is focused on a very large multi-billion-dollar addressable market of 20+crore existing vehicles on road in India, which can benefit from Gtropy and MapmyIndia combined IoT led goods logistics and people mobility SaaS. Second, in marketing activities to build awareness of the MapmyIndia and Mappls brands and product portfolio, which will reap rewards in terms of new customer acquisition and new use case adoption. And third, in cutting-edge product and platform development which will further expand use cases, addressable markets, growth engines and moats for MapmyIndia Mappls. We make these investments responsibly, with an eye towards the future, balancing both short and long term goals for growth and earnings. Finally, we’re excited about our inorganic, strategic investment into Kog, a gamified social travel commerce platform, which opens a new market and use –case for us.”

Rohan Verma, CEO & Executive Director, MapmyIndia, said “Q2 FY23 was an exciting quarter for us, with lots of action on all fronts and we’ve ended H1FY23 on a strong note. Revenue growth for H1FY23 VsH1FY22 continues to be broad based with A&M (Automotive and Mobility) up 55% and C& E (Consumer Tech and Enterprise Digital Transformation) up 29% on the market side. On products side, Map & Data was up 32% and Platform & IoT was up 49%. Our newly acquired Gtropy business grew fast in QFY23, doubling revenue Vs Q1FY23. As scale and subsequent- year high margin SaaS income of Gtropy and our IoT-led business kicks in, Gtropy will enhance its contribution to consolidated profitability of the group. We’ve calibrated marketing expenses to increase awareness of our brand and range of MaaS, PaaS, SaaS, Drone and IoT solutions to drive further adoption by customers, across more vertical, and for more use cases. Our swadeshi Mappls app and platform is making further inroads, with strong government partnerships, during an interesting inflection point in India’s Aatmanirbhar journey. We continue to invest in building out our recently released RealView 360-degree and Metaverse 3D maps products, as well as our range of developer APIs, N-CASE suite, Digital Transformation Platform, and our consumer facing Mappls app. Intergrating Kogo’s social travel commerce platform  with our maps and navigation, gives a unique edge and advantage to our N-CASE suite offerings to Automotive OEM’s and allows us to reach out to consumer, businesses, government and developers with altogether new and enhanced offerings. We are optimistic and excited about the future of the company.”