CE Info Systems Ltd Q1 FY2025 Concall Summary

Key Takeaways

• Revenue grew 13.5% YoY to INR101 crores, with a deliberate shift from hardware to higher-value services compensating for an IoT hardware decline.
• The INR1,000 crores FY27/FY28 target is reaffirmed, backed by an open order book that has nearly doubled to INR1,300 crores and a confident management tone.
• Competitive noise is framed as market validation: management dismissed a big-tech price cut as a reactive, narrow move and a new free entrant as product-weak, positioning MapmyIndia as the premium, disproportionate winner.
• Legal action against Ola Electric signals IP enforcement, though management declined to elaborate, leaving the financial impact unclear.
• What to watch next quarter: whether the IoT hardware business rebounds now that the Gtropy funding approval is in hand, and any concrete international market announcements.

Revenue Mix Shift: Hardware Down, Services Up

• Strategic rebalancing: hardware sales halved YoY from INR15 crores to INR8.9 crores, while services revenue nearly doubled from INR7.7 crores to INR14.6 crores, a shift management called intentional.
• IoT hardware decline was a funding bottleneck, now resolved: the Gtropy IoT arm lacked funds, causing the drop, but shareholder approval was obtained this month, and management expects hardware sales growth to resume.
• IoT trajectory remains strong: the business grew from INR8 crores to over INR100 crores in three years, and the Q1 decline should not be viewed in isolation.
• Technical services outsource expense of INR11 crores was project-specific cost to support INR92 crores of software revenue, not a permanent headcount substitute.
• SaaS revenue sequential dip disputed: management denied subscription levels fell, suggesting Q4 may have benefited from an annual subscription lump, and noted hardware is sold both with and without software subscriptions.

Rakesh Verma: "Well, I would like to thank all the participants, and I would like to say with a high level of confidence that we are pretty much on track. And the year FY '25 has started in a nice way."

Automotive: New Wins Offset Hyundai-Kia Transition

• Hyundai-Kia ramp-down complete, ramp-up begun: the old program ended, but a new contract is in place with revenue starting this quarter; all Hyundai-Kia cars on the road have already switched to MapmyIndia, and the companion app now uses it.
• New OEM wins and go-lives: deals won for a leading electric commercial vehicle OEM and a large utility vehicle OEM; go-lives include Mahindra XUV 3XO, BYD Atto 3, Ampere Greaves Nexus electric scooter, and Ultraviolet F77 premium electric bike.
• ADAS and EV adoption driving premiumization: advanced e-horizon, ADAS, and EV software for functions like intelligent speed assist, highway assist, and range prediction are seeing large adoption.
• Auto business grew excluding IoT, per an analyst's math, despite the Hyundai-Kia transition drag, though management declined to give Q2-specific guidance, asking investors to view the business annually.
• OEM contracts are sticky 4-5 year deals: management noted customers do not negotiate daily, and the competitive pricing dynamics in the developer/API market are not relevant to the automotive OEM space.

Competitive Landscape: Premium Positioning vs. Price War

• A new entrant is giving everything for free, but management dismissed the threat, stating a bad product will not be adopted regardless of price.
• Big-tech competitor cut prices, a move management called a direct response to MapmyIndia, not the free entrant; the headline discount of up to 70% applies only to small developers with low propensity to pay, while large customers saw no change.
• Product differentiation is the moat: MapmyIndia launched 3D junction views 7-8 years ago for automotive and popularized them via the Mappls App two years ago; the competitor's recent "flyovers" voice feature was dismissed as a weak solution for complex Indian intersections.
• Mapping is a difficult, serious business requiring long-term expertise, investment, time, capital, and a track record of servicing customers across verticals that stress-test map accuracy; hundreds have tried globally, few have sustained, and in India, MapmyIndia is the one.

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. We only see more adoption happening with more noise and more awareness. We believe we will be the disproportionate winner in the market that gets added on due to all this activity."

New Verticals & Growth Engines

• C&E segment grew 16.9%, driven by flood modelling and water management in East Indian cities, 3D digital twin mapping, and go-lives including UP Police Dial 112 and an Indian army defense project.
• Corporate segment expanding: e-commerce, QSR, delivery, and mobility companies use APIs for location personalization and address capture; BFSI and retail use them for credit assessment, store-wise sales prediction, and business expansion analytics.
• Fleet segment seeing growth: monitoring of mine vehicles for large metals companies, video telematics for employee transportation, and schools deploying solutions.
• AI-driven data analytics and consulting was added as a new offering this quarter, developed through the ClarityX partnership, with all revenue and profits accruing entirely to MapmyIndia.
• Cadastral mapping opportunity: the government is focused on cadastral maps for 6.5 lakh villages, with 3 lakh already done; MapmyIndia is participating and well positioned with 2D and 3D drone-based digital twin capabilities.
• International markets are building up: management is bullish and expects serious announcements in the next couple of quarters.

Legal & Governance

• Legal notice served to Ola Electric for breach of terms and conditions: Ola ANI Technologies licensed map data in 2015, and Ola Electric licensed APIs and SDKs in 2021; certain breaches were observed, and the legal process has started.
• Management declined to comment further on the Ola matter when pressed by an analyst, limiting visibility into potential financial outcomes.
• Shareholder approval for Gtropy funding was obtained this month, removing the constraint that caused the IoT hardware decline.

Margins & Investment

• EBITDA margin guidance of 40% was previously given, but management did not directly reaffirm it, instead emphasizing the need to continuously invest in products for cutting-edge innovations and brand awareness activities.
• MaaS, SaaS, and PaaS are high-margin, but the company is choosing to reinvest rather than optimize for margin in the near term.
• Brand awareness spending is starting: activities to get more people to know about MapmyIndia and its solutions are underway, including prominent sponsorship placement in the India-Sri Lanka ODI series.
• Hardware-SaaS interplay supports future margins: hardware is treated as an installed base; once installed, the customer takes SaaS going forward, and SaaS carries higher margins.

Rohan Verma: "If you look at kind of the history of other players, they have been volatile; sometimes giving it for free, sometimes charging, sometimes charging a lot, sometimes reducing prices. We've been fairly predictable, reliable and value-based for our customers."

Guidance & Commitments

Key Metrics