MapmyIndia C.E. Info Systems: Q1FY25 Earnings Call Highlights

Clear vision for future growth. Commitment to technological innovation. While challenges exist, MapmyIndia is positioned to capitalise on the expanding mapping and geospatial market

Money Muscle

Sep 25, 2024

mapmyindia.com | NSE: MAPMYINDIA

Overall Performance

Strong start to FY25 with growth across all financial metrics: revenue, EBITDA, and PAT.
Revenue grew 13.5% YoY to INR 101 crores.
EBITDA grew 14.3% YoY with a margin of 42.8%.
PAT increased by 12% to almost INR 36 crores.

Business Highlights

Map-led Business:

Revenue contribution of INR 78 crores.
EBITDA grew to INR 39 crores YoY, representing a 50% margin.

Key growth drivers:
- Strong new customer acquisitions across automotive and C&E segments.
- Increasing adoption of advanced EV and ADAS solutions in automotive.
Growing demand for 3D digital twin mapping and geospatial solutions in C&E.

IoT-led Business:

Revenue contribution of INR 23.5 crores.
EBITDA increased to INR 3.7 crores YoY, representing a 15.7% margin.
Hardware sales declined due to temporary funding constraints at Gtropy, their IoT arm. However, this was offset by a 90% growth in SaaS revenue.
Funding issue has been resolved, and hardware sales are expected to recover in the coming quarters.

Key Strategic Developments

Addressing Ola Electric Legal Dispute: MapmyIndia has served a legal notice to Ola Electric for alleged breach of contract terms related to map data usage.
The company is pursuing legal action to protect its rights and is confident in its position.
Navigating Competitive Landscape: The company acknowledges increased competition, particularly from Ola Maps and Google Maps.
MapmyIndia remains confident in its market position as a premium map provider in India, citing its long-standing expertise, superior product quality, and strong customer relationships.
The company is addressing pricing pressures strategically and is not overly concerned by recent competitor moves.

Other Notable Points

The company remains on track to achieve its revenue milestone of INR 1,000 crores by FY27-FY28.
MapmyIndia continues to invest in innovation, including 3D digital twin mapping, drone-based solutions, and AI-driven data analytics.
International expansion efforts are progressing well, with significant announcements expected in the coming quarters.
The company emphasizes the importance of viewing its performance on an annual basis rather than focusing on quarterly fluctuations.
Management remains optimistic about future growth prospects and is committed to delivering value to its customers and shareholders.

Key Quotes:

On Competition (Rohan Verma): “MapmyIndia is the premium map provider in the country, offering the best value to customers. We are pretty confident about our market position, and these different dynamics that are at play, we don't see as a risk to our business."
On Market Positioning (Rohan Verma): "Mapping is a very difficult business. It's a very serious business. It requires long term expertise, investment, time, capital, and a track record of servicing customers across industry verticals... and only that creates a map that customers would like to choose.”
On IoT Business Growth (Rakesh Verma): "On IoT, we are pretty bullish, and it's growing quite well... This year also, I'm pretty confident that we'll have a pretty good growth in the IoT business.”
On Reaching INR 1,000 Crore Revenue Target (Rohan Verma): “We are confident about our revenue milestone of INR 1,000 crores by FY27, FY28. The business is building up in that direction very nicely.”

Overall

MapmyIndia’s Q1 FY25 earnings call projected an image of confidence and ambition. Despite increased competition and a temporary setback in the IoT segment, the company’s management conveyed a clear vision for future growth and emphasised their commitment to technological innovation and customer satisfaction. While acknowledging the challenges ahead, MapmyIndia appears well-positioned to capitalise on the expanding Indian mapping and geospatial market.

C.E. Info Systems (MapmyIndia) Q1 FY25 Earnings Call FAQ

1. What is driving the decline in hardware sales in the IoT business?

The decline in hardware sales, specifically in Q1 FY25, is primarily attributed to a strategic decision to temporarily limit hardware sales due to the non-availability of funds at Gtropy, MapmyIndia's IoT arm. However, this situation has been addressed with shareholder approval for increased funding to Gtropy. MapmyIndia is confident that hardware sales will see a resurgence in the coming quarters.

2. How does MapmyIndia view the interplay between hardware and software in its IoT business?

MapmyIndia considers its hardware installations as an entry point for generating recurring revenue through SaaS (Software as a Service). The company aims to leverage its expanding hardware installed base to drive the growth of higher-margin SaaS revenues in the long term. This strategy is reflected in the recent quarter's performance, where despite a dip in hardware sales, SaaS revenue saw significant growth.

3. Is MapmyIndia on track to achieve its INR 1,000 crore revenue target by FY27/FY28?

Yes, MapmyIndia remains confident in achieving its stated revenue milestone of INR 1,000 crores by FY27/FY28. The company's confidence stems from its steadily increasing order book, which has grown from INR 699 crores to INR 1,300 crores in recent years. While quarterly revenue can fluctuate in a B2B environment, MapmyIndia focuses on long-term growth, supported by its strong order book and new customer acquisitions.

4. How does MapmyIndia address concerns regarding map accuracy and updates?

MapmyIndia employs a real-time data updation system to ensure the accuracy of its maps. The company utilizes a combination of automated and semi-automated processes, customer feedback, and dedicated data acquisition teams to capture and validate changes in real-time. MapmyIndia aims to provide the most up-to-date and comprehensive maps, reflecting the dynamic nature of the Indian landscape.

5. What is MapmyIndia's response to the entry of Ola Maps and pricing strategies of Google Maps?

MapmyIndia acknowledges the emergence of new players like Ola Maps and the evolving pricing strategies of established competitors like Google Maps. However, MapmyIndia remains confident in its market position, emphasizing its premium map quality, deep customer relationships, and value-driven pricing model. MapmyIndia believes its longstanding expertise and customer-centric approach will continue to drive its success in the market.

6. How will the partnership with ClarityX benefit MapmyIndia's revenue?

The partnership with ClarityX will enable MapmyIndia to offer AI-driven data analytics and consulting services, enhancing its existing product and platform portfolio. All revenue generated through this partnership will be directly accrued to MapmyIndia. The collaboration allows MapmyIndia to expand its service offerings, leading to increased customer engagement and potential for higher revenue generation.

7. What updates can we expect regarding MapmyIndia's international expansion, drone services, and consumer-focused initiatives?

MapmyIndia is making significant progress in its international expansion plans and anticipates making key announcements in the coming quarters. The company's drone services, particularly in 3D digital twin mapping, are gaining traction across various sectors, indicating promising future growth. MapmyIndia is also committed to its consumer-focused products and services and will soon be announcing enhancements to further enhance the user experience.

8. Does MapmyIndia anticipate any margin pressure due to increased competition in the map data and services market?

While MapmyIndia acknowledges the competitive landscape, the company remains committed to investing in cutting-edge technology and expanding its market reach through strategic initiatives like marketing campaigns. MapmyIndia views EBITDA margins as an outcome of its growth strategy and will continue to balance profitability with investments that drive long-term value creation.

Source: Link to Earning Call Transcripts

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