C.E.Info Systems
hosted a conference call on Jan 31, 2023. In the conference call the company
was represented by Mr Rakesh Verma-Chairman and Managing Director, Mr Rohan Verma-CEO,
Mr Anuj Jain –CFO and Mr Sourabh Somany-Company Secretary.
Key Takeaways of the call
The company delivered another quarter of
strong performance.
Revenues:
Revenues in Q3FY2023
grew 56% YoY to Rs 68 cr.
In 9M FY2023 revenues
grew 46% to Rs 209.0 cr as against Rs 143.4 cr in 9MFY2022.
Revenue growth was
driven by upselling and cross-selling to both existing and new customers.
Growth in revenues was
broad based across verticals and products side.
From market perspective in Q3,revenue
from Automotive and Mobility Tech(
A&M) grew by 45% YoY and Customer Tech & Enterprise Digital
Transformation(C&E) grew by 76% YoY. For 9M, A&M grew by 51% YoY and C&E grew by
40% YoY.
From products perspective in Q3, revenue
from Map & Data was up 78% YoY and Platform &IoT was up by 51%.
Due to nature of the
business, revenues of the company is seasonal and lumpy.
Margins:
In Q3 EBITDA grew
by67% to Rs 27.8 cr with EBITDA margin of 41.1%.Improvement in margin in Q3 was
on account of the company calibrating the marketing cost down.
In 9MFY2023 EBITDA
grew 41% YoY to Rs88.4cr with EBITDA margin of 42.3% against EBITDA margin of
44% in 9MFY2022.
Effective Tax rate: Effective tax rate was lower in Q3 when
compared to Q2 as other income includes unrealized income on investment due to
re-valuation of portfolio investments. Capital gains tax is lower when compared
to business tax.
Marketing Expenses: The company closely monitors and will
caliberate up and down the marketing
expense based on the growth of revenue and
profitability.
Cloud hosting expenses: The company expects the cloud hosting
expenses to go up but expects optimize the same.
Investments:
Gtropy:
The Company acquired 76% of Gtropy to scale up IoT
led products business as there is huge opportunity.
High growth in IoT business compresses
margins initially, as device hardware has lower margins, but starts creating
high margin SaaS revenue in future, typically 12 months down the road.
9M FY23 Revenue from Sale of Hardware
increased to Rs 31.8 Cr YoY from Rs 10.7 Cr in 9M FY22 (H1 FY 23 was Rs 20.4
Cr). 9M FY23 Revenue from SaaS Subscription for IoT-led business increased to
Rs 12.4 Cr YoY from Rs 4.1 Cr in 9M FY22 (H1 FY23 was Rs 6.5 Cr) and EBITDA
margins for the rest of the business (map-led business) are very strong at 53%.
Indrones
Solutions Private Limited: The board of directors
have approved the acquisition of 20% equity stake in Indrones Solutions Private
Limited for Rs 7 crore. The acquisition will aid to improve the company’s
activities and synergies for company’s
products.
Acquisitions of the portfolio companies are
based on improving the overall business of the company.
Valuation of the portfolio companies are
based on lower of either the valuation of new investments made in the portfolio
company or by an valuation expert.
New
Projects Signed:
In A&M
vertical : Auto NCASE sales for the Company have outperformed the automotive
OEM industry volume growth i.e. increased attach rate to more number of
vehicles for our NCASE solutions; Large, new 4-wheeler EV OEM entrant into
Indian market signed up for NCASE solution;Large 4-wheeler OEM upsold on ADAS
use case of NCASE solution; Large 2-wheeler OEM signed up for NCASE solution;
Multiple 2-wheeler EV OEM startups signed up for NCASE solution and Taxi Cab
company signed up for Video Telematics solution to monitor their cabs and also
ensure safety for their drivers and customers.
In C& E
vertical: Multi-year extension of contract with Big Tech company; Large
Marketing/Ad Agency customer upsold on Micro-Geodemographic Analytics Data Set
and 2 Large Bank & Fin-tech companies signed up for workforce &
workflow monitoring, management & automation solutions.
Competition by
Google: The Company expects good opportunities for its
consumer app and B2C business, based on recent competition actions by CCI and
supreme court, which opens up the market fo the company’s Mappls app. The
company expects Google to implement the changes directed by Competition commission
of India and Supreme Court.
Dividend Policy: The board
will look at paying the dividend at the end of the year. Dividend payment will
be based on cash requirements to make investment in portfolio companies; Investments
required to grow organically and normal cash requirements for operations.
Management Commentary:
Commenting on
the performance Mr RakeshVerma CMD said: ‘In Q3 FY23,Mapmyindia delivered
another strong performance, with quarterly revenue up 56% YoY to Rs 68 cr,
EBITDA up 67% to Rs 28 cr, PAT up 61% to Rs 30 cr. EBITDA and PAT margins both
expanded in Q3FY23 onaQoQ basis as well as YoY basis, with EBITDA margin at
41.1% and PAT margin at 38%. Year to date Year on Year is the right way to
compare performance trend of the company. 9MFY23 YOY revenue is up 46%,EBITDA is up 41%, and PAT is up
22%. EBITDA margin is 42.3% and PAT margin is at 33.9%. Overall these are very
healthy growth and profitability numbers. The upselling and cross-selling of
our products and solutions to existing and new customers continue, which bodes
well for the future of the company. We are happy that we have been able to
balance our growth and profitability goals, maintaining financial discipline,
while also ensuring that we are investing for the future.”
Mr
ROhanVerma-CEO said “ In Q3 FY23, revenue growth continues to be broad based
with A&m up45% YoY and C&E up 76% on the market side. On the product
side, Map and data was up 78% and Platform &IoT was up 51%. For 9MFY23 YoY,
A&M revenue was up 51% and C&E revenue was up 40%. Similarly, Map &
data revenue was by 39% and platform and IoT revenue was up 50%. Thus, both for
the quarter and the year, the business is on a strong trajectory. As part of
financial discipline, we calibrated marketing expenses down during the quarter,
aiding in the company’s profitability, while successfully leveraging previous
quarters’ marketing expenditure to generate revenue and order book growth. We
are excited by the customer wins for our various products and solutions across
industry verticals for many exciting and newer use cases. Good prospects lie
ahead for our consumer app and B2C business, based on recent pro-competition
actions by CCI and Supreme Court which opens up the market our Mappls app.”
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