CE Info Systems Ltd Q3 FY2025 Concall Summary

Key Takeaways

• 25% YoY revenue growth, C&E-led: Revenue hit ₹115 cr, driven by a 39% surge in the C&E segment from a major social media deal, quick commerce wins, and government projects.
• Margin compression is deliberate: EBITDA margin fell to 36% from 39% YoY as lower-margin government work and outsourcing costs for rapid scaling weighed; management prioritizes absolute EBITDA growth over margin percentage.
• Hyundai-Kia JV is live, revenue next year: The Indonesia JV was operationalized with only days left in Q3; revenue is expected to begin in Q1 or Q2 of the next financial year, with a 2-3 year ramp to full potential.
• Mappls App spend is being cut: Management is calibrating B2C investment from Q4 onward, viewing the app purely as an R&D showcase for B2B deals, not a standalone business.
• What to watch next quarter: Whether delayed IoT contracts actually land in FY26, the pace of Hyundai-Kia JV revenue contribution, and the full-year order book disclosure on March 31.

C&E Segment: The Quarter's Growth Engine

• Social media mega-deal: A major deal was signed with one of the largest global social media networks across their app platforms in India; deal size is undisclosed due to an NDA.
• Quick commerce and BFSI wins: Significant new business was added in the quick commerce space and the BFSI vertical, broadening the segment's client base beyond the headline deal.
• Government project drag: Government projects carry lower margins than corporate and automotive work, and the outsourcing expenses required for rapid scaling and COTS software pulled down overall company margin.
• Revenue share rising: Government business has been increasing from a small base over 2-3 years and will be a double-digit percentage of total revenue this year, though still less than 20%.

Rakesh Verma: "Definitely in the government work the margin is not high like what you see in typical corporate and automotive sectors. So, it does draw down the overall margin of the Company. But at the board level also we are very clear that we must undertake them for hundreds of good reasons."

A&M and IoT: Steady Penetration, Delayed Hardware

• A&M license growth: The A&M segment grew 9% YoY despite Q3 being a seasonally slow period for automotive; license count grew 23% on a nine-month basis, signaling deepening OEM penetration.
• Hyundai-Kia ramp: From Q4 onward, 100% of Hyundai and Kia models will have MapmyIndia maps built in, up from partial coverage in Q3; revenue can be tracked with Hyundai car sales and could become 2x in 2-3 years from the current base.
• IoT hardware delays, not losses: IoT-led business grew only 4% YoY because large device contracts expected in Q3 were postponed to future quarters; these were not lost and are anticipated to materialize in the next financial year.
• Subscription mix improving: IoT subscription revenue grew 31% YoY, and the segment's EBITDA margin improved from 8% to 12% on a nine-month basis due to a focus on higher-margin subscription revenue.
• Retail hardware stable: The shortfall versus the 300,000-unit expectation came entirely from large projects that did not materialize; retail-side hardware sales did not decline.

Hyundai-Kia JV and Global Expansion

• JV operationalized: The joint venture with Hyundai Autoever in Indonesia was legally operationalized at the end of the calendar year, leaving only 10-15 days to report anything in Q3.
• Revenue model: License revenue from Hyundai-Kia for Southeast Asian countries will be directed to the JV; MapmyIndia provides tools and technologies to local map players and processes data from the JV for licensing to any automotive customer, including non-Hyundai-Kia OEMs.
• Revenue timing: Initial content preparation is complete and productization is underway; revenue is expected to begin in Q1 or Q2 of the next financial year.
• Ramp timeline: The JV will likely take 2-3 years to fully ramp up and capture the full total addressable market advantage; the key focus is on winning opportunities during the FY26 period.
• Qualcomm partnership: The engagement is initially focused on automotive OEMs for inline-fit connectivity; revenue impact will be seen post 1 year at least.

Rakesh Verma: "So don't expect any magic numbers. The key focus should be on how quickly we are able to win opportunities during the FY26 period, especially due to the formation of the JV."

Margins: Growth Over Percentage

• Margin walk: EBITDA margin fell to 36% in Q3 from 39% YoY, and stands at 38% for the nine-month period versus 42% last year; government projects with lower margins and associated outsourcing costs were the primary drag.
• Management's reframe: Leadership explicitly redirected focus away from margin percentage toward absolute EBITDA growth and PAT growth, arguing that fixating on margins could negatively impact revenue growth and that maintaining very high margins while growing is unrealistic.
• Year-end expectation: EBITDA margin should remain close to 38% by year-end, consistent with the nine-month figure.
• Government receivables healthy: Despite lower margins, government receivables are under 100 days with no increasing bad debt provisions; the company is selective, only taking projects where payment is assured.

Rakesh Verma: "If we fixate on margins alone, it could negatively impact our revenue growth. I'm sure all of you understand that achieving revenue growth while maintaining such high EBITDA margins is unrealistic."

Mappls App and B2C Strategy Recalibration

• B2C spend cut: The company spent approximately ₹5 cr on the Mappls App in Q3; from Q4 onward, it is calibrating its approach and has decided not to invest in building a business around the app at this point.
• App as B2B showcase: Management views the Mappls App not as a B2C revenue generator but as an integral driver showcasing R&D and innovation, such as junction view, that leads to B2B and B2B2C revenue.
• Future optionality preserved: The company will consider building a B2C business around the app if an opportunity arises in the future, but no investment is planned now.

Rakesh Verma: "I don't view the Mappls App primarily as a B2C business. I believe I have been able to clarify that today. It is an integral part of supporting our B2B and B2B2C business."

Guidance & Commitments

Key Metrics