CE Info Systems Ltd Q3 FY2024 Concall Summary

Key Takeaways

• Record quarter, 36% YoY growth: Total income crossed INR 100 crores for the first time, with revenue reaching INR 92 crores, driven by broad-based strength across both A&M and C&E segments.
• IoT margin inflection validates strategy: IoT EBITDA margin improved sequentially from 6.3% to 10%, proving the thesis that SaaS revenue and operating leverage would lift profitability alongside growth.
• The INR 1,000 crore ambition is now explicit: Management set a public target to reach that revenue mark in 4–5 years, implying a 35–40% CAGR, and plans to fund the build-out via a QIP approved by 99.2% of voting shareholders.
• FY24 guidance softened without retracting: On a direct question about the 40% growth target, management said it is still gunning for it but called holding them to a specific number "difficult or challenging," with nine-month growth at ~31%.
• What to watch next quarter: Whether Q4 delivers the seasonal uptick management expects, any disclosure on the large auto OEM win teased for "soon," and concrete QIP timing now that shareholder approval is in hand.

Revenue Performance & Drivers

• A&M steady, C&E spiking: A&M grew 19.5% YTD while C&E surged 43.1% YTD, with Q3 C&E growth hitting 70.9% on the nature of certain contracts; the balance between the two segments is what management credits for strong overall growth.
• Automotive remains sticky and annuity-like: Client retention in automotive is 100% over the last 2–3 years, and even volume-based contracts are structured as per-vehicle-per-month or per-vehicle-per-year fees, making the revenue conceptually predictable.
• New auto wins span ICE and EV: A large Indian four-wheeler OEM expanded across multiple new models, its new EV four-wheeler went live, a European two-wheeler OEM signed for navigation, and multiple EV two-wheeler OEMs went live.
• C&E wins diversified into defense, drones, and digital commerce: Large e-commerce and D2C companies signed for map APIs, a logistics major took drone-based 3D mapping and risk monitoring, and IoT-led logistics monitoring expanded across cement, sugar, and steel.
• Government business is deliberately narrow: Revenue contribution has historically been 5–6%, and the company remains highly selective, choosing only revenue-based projects that fit its product mix and declining work that does not excite them despite having the technology.

Rakesh Verma: "We just don't do any CVs, one. Second, we always do things based on revenue-based projects or work in the government. So that's why you may not be noticing us in some of the areas, which probably do not excite us. It's not a question whether we have the technology or not. We do have. But we don't try to get into those and waste our time."

IoT & Drone: The New Pillars

• IoT margin trajectory proves the model: IoT EBITDA climbed from 6.3% in Q1 to 8.2% in Q2 to 10% in Q3, as more SaaS revenue kicked in and operating leverage took hold; management called this validation of running IoT alongside the Map-led business.
• Drone business is early but designed to recur: Engagements start as first-time projects but become recurring when continuous inspections and monitoring enter customer SOPs; the current logistics customer is not yet fully deployed, with upsell opportunities across warehouses, yards, and analytics.
• Three monetization paths for drones: Selling drones outright, providing drone-based services and analytics where customers want output without owning hardware, and embedding drones as one data-collection method inside a broader solution.
• Inorganic investments are ecosystem plays, not just financial bets: The KOGO investment ties to the Mappls App, Indrones ties to the drone pillar, and both are startups that will take time; the objective is ecosystem growth, with the company already generating standalone drone revenue for 1–1.5 years.

Rohan Verma: "I mean see, once somebody starts wanting to do these continuous inspections and monitoring, it starts becoming a recurring business. But obviously, this drone business starts off with first time and then as it becomes part of their SOPs to do the risk assessment, and risk assessment can't be a one-time activity. It has to continuously happen."

Mappls App & Consumer Push

• Marketing spend was concentrated and cost-effective: INR 5.3 crores in total marketing (INR 4 crores stand-alone) was absorbed in the Map-led and Mappls App segment, covering ATL on cricket and TV news, BTL at point of sale, and social media during the Cricket World Cup with Metaverse.
• In-app advertising revenue has begun: A campaign with Cadbury's promoting local businesses and entrepreneurs ran exclusively on Mappls, marking the kick-start of a monetization lever management calls quite promising.
• Mappls KOGO revenue model spans OEM and consumer: For OEMs, it mirrors the NCASE suite with per-vehicle fees; for consumers, it adds membership subscriptions for discounted bookings and commerce transaction-based revenue from purchases made through KOGO.
• MAU and DAU metrics remain undisclosed: Management declined to share user data, saying only that it will start disclosing those metrics at the appropriate time.

Rohan Verma: "I don't know how many companies are able to be creative with their ATL/BTL, social, online, offline, cricket, TV news, which are mainstream, yet spend such less but get large bang on the buck."

Margins & Cost Structure

• EBITDA margin at 39% includes a one-off: The figure benefited from a ~INR 2.5 crore provision reversal on inventory sold during the quarter, booked in other income rather than as an expense reduction; without it, the underlying margin would be lower.
• Cloud costs will rise but with leverage: Communication and cloud hosting expenses stood at INR 3.94 crores and will increase with business scale, but engineering optimization across public cloud, private data centers, and hybrid cloud provides a lever to control the trajectory.
• Marketing spend is calibrated quarterly, not pre-committed: Management declined to give a quarterly range, saying decisions are based on quarterly objectives and the marketing mix, with no pre-decided envelope.

Capital & Strategic Direction

• QIP approved, timing open: The shareholder postal ballot approved the QIP on December 29 with 99.2% of the 85.5% of shareholders who voted; the company has a one-year window and will proceed when market conditions and internal readiness align.
• Fundraise deployment is a 2–3 year build for a 5–10 year horizon: Raised funds will be invested organically or inorganically to build the business for the subsequent 5–10 years, with international expansion, the drone business, and the consumer business as the named priorities.
• International expansion is product-first but customer-led: The software is world-class and customers are already asking for it; where they ask for maps, the company will provide maps, but the approach is to follow customer demand rather than push a map product globally.

Rakesh Verma: "See, overall, if you think of MapmyIndia, I mean, overall, there might be exceptions. That it is always annuity SaaS kind of a business, where even if it is automotive, the vehicle that comes out, if I signed up a 5-year contract and for every vehicle that leaves the factory, I'm getting x rupees, it's kind of annuity from a conceptual perspective. So that's how MapmyIndia's future business is pretty much predictable."

Guidance & Commitments

Key Metrics