C.E. Info Systems (NSE:MAPMYINDIA) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to CE Info Systems Q2 FY 'twenty seven Earnings Conference Call hosted by Ban Capital Advisors Limited. Questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Anmol Gal from Dam Capital Advisors Limited. Thank you, and over to you, sir. Yes. Thanks, Ikra. Good evening, everyone. On behalf of Dam Capital, we welcome you all to Q2 FY 'twenty seven conference call of MAPMYINDIA. We have with us Mr. Rakesh Verma, Co Founder and Group Chairman Mr. Rohan Verma, Joint MD.

0:50 And I'll now hand over the call to Mr. Rakesh Verma for his opening remarks. Post that, we can start with the Q and A session with the entire management team. Over to you, sir. Thank you, Anmol. This is Akeesh Verma, and good afternoon to all the participants. I'll be doing a short introduction for today and then I'll ask Rohan to add more color to it and then we leave it for Q and A. Let me say something which is it will be good for the investors to understand MAPMYINDIA one a bit better. See, there are five different things we consider in running the business.

1:40 One is the market segment, which is automotive, enterprise and government and the other is the product solutions, which is MAP led and IoT led. Now these are the five things or five areas that MAPMYINDIA looks at from a holistic perspective to see how our business keeps growing. What it means is there might be one impact on one part of it in one quarter, there might be another impact on another area in another quarter. So this is something for all of all the participants and investors need to understand that. Keeping that in mind, I'll say that for the last three quarters, MAPMYINDIA has been registering a very good growth in all the three parts, be it revenue or EBITDA or PAT.

2:44 In this quarter, Q2, year on year, revenue has grown 15.8%, EBITDA has grown 60% and PAT has grown 90%. If we look at the half year for the H1, the revenue has grown 18.4%, EBITDA has grown 20.4% and PAT has grown 32%. Now if I tell you some other qualitative things, I would like to share with you that the management is investing in its technology in a big way for future readiness.

3:36 And in that context, we are further strengthening leadership team across technology, product and business to support the next phase of growth. In parallel, we are embedding AI, ML and neural networks across our MAPMY and IoT platforms, spanning intelligent mapping, navigation, in vehicle intelligence, telematics, analytics and workflow automation backed by over three decades of technology innovation, proprietary data, deep domain expertise and is differentiated geospatial and IoT platform, we are well positioned to accelerate AI led innovation, create new growth opportunities and drive sustainable profitable growth.

4:41 Let me I'll ask Rohan to give you more color to the way the business happened during the Q2 and whatever guidance he has to give for the future. Thank you, Mr. Arma, and good afternoon, everybody. I'll start by kind of talking about how the MAP led and IoT led business both did. Seeing strong growth across both of the segments. MAPMYD in Q2 reached INR 76.7 crores. EBITDA margin was 41.6%. And in the first half of the year, EBITDA margin for MAPMYD was 47%. IoT led reached 55.1 crore of revenue and EBITDA margin of 23.8% in Q2 and H1 IoT led margin was around 19.2%.

5:37 So we're seeing strong EBITDA margins in both the product led businesses. Now when it comes to automotive, enterprise and government, our market by segments, we saw pretty strong growth in automotive, growing about 52% in Q2 and 40% overall in H1. And a bunch of interesting wins were there when it comes to automotive, especially now the commercial vehicle segment with our navigation solution localized for that as well as a leading two wheeler OEM where we've secured the contract renewal besides a bunch of new go lives across four wheeler, two wheeler and more IoT deployments across line fitment and aftermarket implementation.

6:26 Then enterprise also had a pretty strong growth of 44% in Q2. And again, some very, very interesting wins, especially some very large delivery, last mile delivery and quick commerce as well as last mile logistics customers. One very large customer we won this past quarter, especially for the entire software stack, which is based on our workflow, workforce automation solution and also an existing very large quick commerce customer of ours continue to scale very high in terms of their volumes 5x, which is a good thing from our perspective as well as a QuickCommerce customer is using us for their analytics for dark store expansion.

7:15 Similarly, on the BFSI side, some interesting customers for our Geo Verify and GeoFi platform, NBFCs and so on, and a large telecom operator for their kind of network expansion. Finally, on the government side, compared to last quarter, last year, same quarter, there was a one off revenue win that year that quarter. So revenue has degrown compared to that. But in this quarter, compared to previous quarter, revenue has grown. We focused on some key go lives like in the oil and gas upstream sector, a kind of digital twin for underground and overground as well as in the national disaster response segment. Our first win there, which itself can become a very large vertical going forward and some other wins are also there in the government side.

8:12 In general, for when it comes to kind of the financial management for the company, inventory has been brought down to half. So that management is going well. Customer collections, time lines are steady right now. We, of course, want to keep improving it. And in terms of kind of cash flows are strong and we are settling supplier accounts faster. So that's an overall on the different parts of the business. Yes, Anmol, you can now. Okay. So thank you very much. We will now begin with the question and answer Participants are requested to use handsets while asking a question.

9:07 The first question is from the line of Anmol Gur from TAM Capital Advisors. And the... Sir, I have a couple of questions that I wanted to understand. One is on the seasonality in the consumer enterprise business. So if you can indicate why there is so much variation from a quarterly perspective in that business, if you can explain that a little bit, that would be helpful. Sure. Anmul, from a seasonality point of view, I think one of the slides we have shared is on the quarter wise revenue trends across automotive, enterprise and government. So when you say C and E, that's old way of us presenting it new ways, enterprise, government and automotive.

9:55 And yes, there is a seasonality. You can see it in the last eight, twelve quarters. I think we have broken it out. Typically, enterprise sees some peaks in Q1 and Q4 and government over the course of the year, especially towards Q4 goes up and automotive has kind of a buildup and then so there is a seasonality. This is just dependent on the different dynamics of different contracts of different customers. Sure, Arun. I was just asking about the enterprise segment. So what leads to this kind of seasonality in that business? Because and why I'm saying this is because in one quarter, the revenue almost doubles versus the other quarter. So just wanted to understand that.

10:44 Again, there are for each of our customers, we have different revenue models, different business models, some are annual license fees, some are based on delivery, some are per transaction, consumption based revenues, some are per asset, per vehicle or per user per month. So combination thereof, different contracts, different sizes, different revenue models and hence the seasonality. Understood, understood. And my second question is that if you can give out some outlook towards the second half of the year, will it be better than 1H? And if yes, then what will drive the growth in the second half? Anmol, the best way to answer this question is, if the last three quarters or at least take the last two quarters, if that is an indicator and we are growing well on all of them and we are successfully converting the open order book into revenue and you know that our open order book is quite a substantial amount number.

11:55 So anyone can think about that why the H2 can't be better than H1. Right, right. But is there any particular contract that will sort of ramp up towards the second half that can particularly make the growth over there much stronger? I understand that usually our fourth quarter is the strongest one, but if you can indicate that any sort of visibility that you can give for the second half? I wouldn't say just fourth quarter, even the third quarter should be good. Yes. Not going to like specific contracts, but at least one of the ones at least we can talk, we've mentioned it that we've gone live with one of our large oil and gas IoT, government IoT subscription customers, large contract that we went one last year, it has now gone live. So that means that the subscriptions for that have started to flow. And so that will be in its full force. But that's just one. There's many others, but we can't go into specific.

13:04 Understood, understood. See, I'm trying to what I'm trying to understand basically is that so last year particularly, our growth was relatively lower. So can we sort of in this year, do we have that visibility that we can get to that 20% plus kind of growth levels? Our growth for half year is almost 18.4% in the H1. So as things look and as the order booking or open order book is available and many of those large open order contracts where the go live has happened and Rohan talked about one example, naturally the revenue growth should happen. I mean, can't pin down any number, but it's looking very encouraging and quite bullish.

14:02 Understood. Understood. That's great to hear. And just one other question is on the cash conversion cycle. So in this quarter, we have seen steep production in the government business, as you had pointed out, that is because of the one off in the base quarter. However, despite that, our receivable days have somewhere remained in the range of one hundred twenty to one hundred twenty two days. So just wanted to understand, is there any progress with higher receivables cycle? Anubh, there was some disturbance. I couldn't hear the question properly. I'll repeat. Can you please repeat? Yes. Now you are audible, Anmol. Please proceed.

14:47 Yes. So what I was saying is that in this quarter, there was a steep reduction in the government business. As you had also pointed out. That's because of the one offs in the base. However, despite that, our receivable days have remained elevated at around one hundred twenty or one hundred twenty two days. So just wanted to understand, is there any projects with higher cash conversion cycle beyond government that is there for us? No, no. I mean, in general, I mean, receivables are fairly stable. There is no particular change from this quarter to previous quarter. Receivables, I mean, it depends on when we are billing and then the cycle to collect that, etcetera. So I mean, for sure, we know that we want to do a better job on government receivable collections.

15:42 I think that's where the team is, in one part, quite focused on. But overall, I think it's overall as a company, we're in a good good situation. And of course, there's a focus internally on the government collection. Sure. Sure. Sure, Rohan. I'll I'll come back in the queue. Thank you so much for answering my questions. Thank you. The next question is from the line of from Quiz PMS. Please go ahead. So like the consumer and enterprise business has shown a very good growth this year. So as we have had great customer wins this quarter, as you mentioned earlier, so do we see a kind of 25%, 30% growth sustaining in this division going ahead?

16:34 I mean we'll not put specific numbers for what is going to come. But yes, definitely, there's very strong momentum, very good funnel when it comes to enterprise and including also in government, including defense and others. There is a kind of very strong funnel that exists, a good open order book. So teams are working strongly. I can't say the number that will happen. We'll let that let the quarter and then the balance part of the year unfold for that. But yes, otherwise, it's looking quite good. Got it. Got it. And for the government business, as there was one off execution, as you mentioned earlier, but since we have had good wins, as mentioned, for the national disaster program as well as digital wins for the oil and gas sector, how are we looking at this business going ahead? Like how big can this opportunity be going ahead?

17:32 See, first, we are careful right now in the government what type of business to take and we are trying to calibrate or kind of create a portfolio where it is it makes sense for us as a company. So where collectability is important, where margins are one factor, where so we do not want to get carried away with government doing things that can create larger issues later. So we are being kind of we are being careful what to take and what not to take. There are a lot of opportunities, especially for our type of products and platforms within government, the civil part, within defense, within oil and gas, within other verticals like urban or in the financial part of the government side.

18:21 There are interesting opportunities, and we are kind of focused on those. Sure. Thank you. Thank you. That's it from my side. You. And one at this moment. Next, we have a follow-up question from the line of from DAM Capital Advisors. Please go ahead. Yeah. Hi. Just one more thing that I wanted to understand is that, you know, we have seen a good increase in the EBITDA margin in our IoT business. Now, you know, this is despite a good in chip in the IoT hardware sales. So just wanted to understand what is driving up this increase in the margins?

19:10 Anmol, there's a couple of things. One is, of course, there's a built in operating leverage in this business. So we have a fixed cost. But as the let's say, over the last one year, one of the things that the company has tried to do is synergize the sales effort of IoT across the overall growth. And that is coming to I mean, showing its results because automotive is a strong domain for us as more and more OEMs or through OEMs, we're able to sell more IoT, it is adding to the size of the business. Yes, on the other side, we are trying to be careful about how to manage inventory, how to optimize costs, all of those things also there. And finally, third is we are trying to continuously build and enhance the technology portfolio so that we can have more and more follow-up SaaS revenue.

20:05 So it's simply a function of larger amount of business that we are generating in the IoT space across automotive enterprise and government. And naturally, we will have kind of the operating leverage from that. Understood. Understood. And Rohan, lastly, how should I think about the margins for us across as a group company across IoT and MAP for the consolidated business for the full year? We have already talked about it for last six months. We are saying that expect we are trying to see that we maintain EBITDA margin of 35% plus. So for the H1 also, if you see that we have done that, EBITDA margin for H1 is 3735.7% I'm sorry, 7.2%.

21:13 Understood. Understood. Sure. Thanks. That's it, Maher. Thank you. The next question is from the line of Gautam Rathi from CWC Advisors. Please go ahead. Gautam, we can't hear you properly. Can you hear me now? Please proceed. Thanks for taking the questions. So the first one, Rohan and Mr. Varma, right? So in this IoT business, which has shown a decent growth this year Y o Y, this quarter Y o Y, is there something which we should be aware of in the hardware sales, which could be one time similar to something which was one time in the last year's service line item revenue, same quarter?

22:15 No, not really. I mean, basically, as we sell more and more of our devices to more customers, I mean, it's we've said it before that we want to be more aggressive when it comes to the sales and marketing side, I'm talking B2B. And that is what is showing up, whether automotive or enterprise or government. The teams are able to take the IoT products to more of the product to our existing customers or to more customers. And that's what's what is showing up here. So is it fair to think about it going forward, right? The hardware sales, which we have seen in this quarter, say INR30 odd crores, that should continue because you will keep on building the number of devices in your network.

23:02 And the service side of revenue, which was INR 22 crore should keep on building as you keep on getting the growth in the SaaS or the number of devices. Is that the fair way to look at it? Yes. Look at it on a yearly basis. I'll not say just take every quarter as the base, but look at it as a yearly basis, yes. Understood. That's helpful. Second is, I think Anmur was trying to also understand this, and it will be really helpful if you can throw some bit more light on this. The receivable number, right? It's a large number, INR174 crore, despite your government business in H1 being lower, right? Our understanding was government business is the most capital intensive in terms of receivables, right? So still INR 186 crore odd number seems to be a large number. Is there something which is dragging this longer to collect?

24:04 Because historically, your other lines of businesses were running with a certain amount of receivables, which was sub-one hundred days, right? Suddenly, are at one hundred thirty three days without the government being a large part in this H1. So is there something again on the receivable which we could do better or is there something which we should be aware of? I mean, at least I'll say that from the non government part of it, it is BAU, okay? There is nothing that from a receivable point of view, non government that it's pretty healthy. Government, we have been collecting. We continue to collect cash. But yes, we want to be able to collect more cash sooner because it's in that 100 crores kind of region of the government collections.

24:57 That is where the effort is to collect it. You had seen Q4 was also very large revenue from government last year. So it's not like this is aged receivables or... So of the 186,000,000 broadly, 100,000,000 is government and 86,000,000 is others is what you're saying, right, broadly? Probably slightly more on government, but yes, exactly. Understood. That's really helpful. And the last bit, right, you spoke about the business models across licenses, per transaction, per month, per user and say API, right? So can you just help us broadly understand in your MAP led business, how much would be more data based selling versus say this recurring API based or per transaction based revenue, just broad numbers?

25:51 I think the way you should look at it is API or data licensing, put them in one category and API based solutions that we build value addition we do for so many different use cases that where the software development for a customer happens based on our products like workflow, workmate types. So API and data, could again, I'm repeating, put it in one bracket. It's just the way you serve the data. Okay. The only thing actually I was trying to understand from that was the APIper transaction is more sort of evened out during the year versus I believe the data part of it is seasonal, which Rowan was trying to hint at earlier.

26:47 Right? So I was just trying to understand how should we think about what is seasonal versus what is more throughout the year. Maybe if there's something that you can explain on that will be helpful. This is why it's important to look at it on a yearly basis because whatever pricing we do, we factored in those types of usages and think about it on a yearly basis. Quarterly, it will just not give the full proper picture. It. Got it. And when you compare with a quarter for a quarter, it will it can give you some good picture, some relatively. But if you keep comparing Q1 to Q2 to Q3 like that, it all throws you off. Understood. Understood. No, that's helpful. And just if I may, one more, right? So just more philosophical and more when we hear you and when people are asking, right, how do you think about the growth H2 going forward? There seems to be two messages which I'm getting. One, when I read your presentation, you say we continue to see significant business visibility and long term opportunities across markets, product segments, etcetera, and we also see that in the growth number this quarter, right? But at the same time, something is just it looks like, okay, I don't know.

28:02 It looks like something is holding you back from saying, okay, or something that they will let. Fine. It will be much better going forward. Right? Maybe are there something which we should be aware of and maybe it could be external, geopolitical, whatever. That that is what... You know, maybe if we look about the next twelve months, that could be possibly a drag which is holding you back. Because if there is strong order book, there is strong business momentum, there is strong visibility, then logically it should flow through, right, everything into the P and L eventually. Naturally, then you should expect that because you answered all your questions also. And you are seeing that in the last three quarters, Q4 of last year, Q1 of this year, Q2 of this year.

28:50 And we are saying that the momentum is there. So obviously, the result has the result will be there, but the result should be there. But actual numbers will come out only after the quarter ends. I mean, I can't how can I predict the future revenue number today? However, on the EBITDA side, we have given you the comfort. Mr. Pampa, actually, I'm not looking for a number. I'm just talking about an acceleration, right? Because we used to be a twenty five thirty percent odd growth company for years, right, which was slowed down in the last couple of years. There were reasons which we understand, right? So I'm just saying, is there a path because the ex geopolitical external issues, just forget that, if we forget that, should we expect an acceleration over the next two years?

29:41 So far, we have not been impacted by the geopolitical scenario so far. Can't talk about the future geopolitical on us. We don't see anything I mean, we don't have any visibility of geopolitical impact on us. But what geopolitical happens, neither you know nor I know. So far, it's all going good and the business is growing. Momentum is there. Order book is there. So accepting two quarters last financial year, which was Q2 and Q3, I guess we have maintained a healthy growth every time. It's just the last last year two quarters, which had a negative kind of a scenario for our growth.

30:31 Got it. All the best. All the best. Thanks for answering my questions. Thank you. Ladies and gentlemen, we'll take this as a last question for today. I would now like to hand the conference over to the management for closing comments. Over to you, sir. Yes, would just like to say thanks. I think in general, what you've seen is that MAPMYINDIA has been taking a very, I would say, calibrated and considered way of bringing momentum into the company. As Mr. Amman mentioned in the beginning, we have strengthened leadership at all levels, whether technology, product or business.

31:18 It's reflected in the Board outcome today. It's a very, very strong team led very ably across all functions that is able to now build the best tech, continue to build the best tech as well as go to as many customers as is needed with our products and solutions. I think that is what is keeping us in the best stead, the steam and momentum that we have here. The financial fundamentals of the business stays strong. It's a profitable, cash rich, growing business. And so with those kind of key ingredients in place, the business, which is a yearly business, is showing the right results on a quarterly basis.

32:04 Of course, there are two more quarters to be done for the full year to show the difference between this year versus, let's say, the previous year. So I think in all fronts, whether order book or customers or funnel or team or tech, we are quite happy, and the results of that are showing already in the last few quarters results, and we are looking forward to the time to come. Thank you. Thank you. On behalf of Dam Capital Advisors Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.