CE Info Systems Ltd Q4 FY2025 Concall Summary

Key Takeaways

• Strong finish to FY25: Momentum picked up in H2, with Map-led growth of 30% in C&E and 13% in A&M driving overall 22% growth, while IoT grew only 5%.
• IoT margin story improving: IoT-led EBITDA margins expanded from 12% to 14% in FY25 as SaaS income crossed 50% of IoT revenue, up from under 40% in FY24.
• Government business is a 20% revenue pillar: Government business grew 40-50% YoY and now represents ~20% of overall revenue, though it brings longer receivable cycles.
• International JV is a near-term drag, not a crisis: The Indonesia JV cost INR2.8 crores in PAT share of loss, but management expects losses to decline toward end-FY26 as revenues ramp on a fixed cost base.
• What to watch next quarter: The May 30 Investor Analyst Meet, where management will detail the INR500 crores revenue plan for the next 3 years and the 5-10 year vision.

Revenue Growth & Segment Dynamics

• Map-led dominance: C&E grew 30% and A&M grew 13%, together compensating for IoT's 5% growth to deliver 22% overall growth.
• Automotive diversification: New customer wins in social media, e-commerce, quick commerce, and merchant discovery show the upsell and cross-sell engine working across both new and existing customers.
• New automotive licenses: Licenses increased to 3-plus industry verticals, though management declined to split the 0.3 crore new vehicle licenses between 4-wheelers, 2-wheelers, and commercial vehicles, or between ICE and EV.
• HD map progress: The company is working on HD maps for ADAS, leveraging its strong SD map base, and has achieved some wins in this area.
• Order book duration: The average order book duration shifted from 4-5 years to 3-4 years based on current analysis, a point-in-time assessment that can change next year.
• Fixed-price predictability: Fixed-price orders give more predictability, though lumpiness will persist quarter-on-quarter customer-by-customer.

Rakesh Verma: "The Map-led growth of whatever we have achieved so far, 30% in C&E and 13% in A&M has been responsible to create a growth of overall 22% because IoT fell towards only 5%. Agreed. But going forward, A&M and the part of C&E which is the private sector is expected to keep growing along with the international automotive business."

IoT Business Transformation

• SaaS shift underway: SaaS revenue as a percentage of IoT-led revenue increased from less than 40% in FY24 to approximately 50%+ in FY25, driven by previous hardware sales converting to SaaS and new business increasingly being SaaS-led, including device rental bundled with SaaS.
• Margin expansion: IoT-led EBITDA margins improved from 12% to 14% in FY25 as product mix improved and SaaS income increased.
• Large funnel: IoT has a large funnel of opportunities across automotive, corporate, and government, with the company building a multi-ferrous IoT business and a large enterprise customer funnel.
• Short-term reset: Management is focused on putting the IoT subsidiary on the right foundation in the short term, while the long-term thesis on IoT stays very positive.

Rohan Verma: "I would say in the short term, I'm looking into how to make sure that the IoT business, specifically the part that the subsidiary is playing, is put on a right path. So based on the right foundation, growing it is strongly additive. But in the long term, our thesis on IoT stays very positive."

Government & Defense Business

• Scale and growth: Government business was approximately 20% of overall revenue in the last year and grew robustly at 40% to 50% YoY, reflected in both Map-led and IoT-led segments, including IoT for state road transport corporations and emergency response.
• Product-not-services positioning: MapmyIndia positions itself as a product, platforms, APIs and solutions company, not a services business, enabling high-quality government business.
• Defense deployments: Solutions have already been deployed for active use by the armed forces across land, air, and sea, with disclosed nautical-related work and previously Army-related work; defense technologies is one of the three pillars of the newly renamed Mappls DT subsidiary.
• Receivable trade-off: Receivable days increased to around 94 days partly due to 34% growth in the last quarter impacting year-end figures; government business inherently requires longer receivable cycles, but the company has no bad debt and is not borrowing to finance working capital.
• Growth balance: Management expects significant growth from the government side but must balance this with the impact on financials.

International Expansion & JV Economics

• Indonesia JV operational: The company started building revenue from the Southeast Asian market via its JV TerraLink Technologies, currently in the business development phase.
• Near-term PAT drag: Share of loss from TerraLink Technologies was INR2.8 crores impacting PAT, but management expects this to start declining toward the end of FY26 as revenues ramp on a somewhat fixed cost base.
• Automotive revenue timeline: International automotive revenue is expected to become meaningful in 1-2 years, forming part of the 30% CAGR confidence alongside A&M and private-sector C&E growth.

Rohan Verma: "We think that towards the end of FY '26, this share of loss should start going down. That's what our assessment is. Right now, we saw INR2.8 crores impact on our PAT due to the share of loss. But as their revenues start coming in on their somewhat fixed cost base by FY '26, and we think that they should start being a turnaround."

Competitive Positioning & Pricing

• Automotive barriers: Management dismissed concerns about new entrants like Ola Maps and Genesys, arguing that entry into the automotive sector is not simple and that just an HD map is not an answer for automotive company needs.
• Pricing discipline: On whether new players could start a price war on per-vehicle subscription charges, management acknowledged price wars are a challenge in B2B but stated the company sticks by what it thinks is right.
• 2-wheeler vs 4-wheeler pricing: Pricing is a function of what the market can bear, with INR2-4 lakh 2-wheelers having different pricing than higher-value vehicles, and varies case-by-case based on what the solution includes.

Rakesh Verma: "Entry into the automotive sector is not that simple, number one. Number two, the entry what we are also hearing the noise is HD map, SD map. And as I said clearly, just an HD map is not an answer for any automotive company needs."

Capital Allocation & Financial Position

• Cash deployment plan: INR80 crores is earmarked to grow the government business and IoT business, with cash also kept for opportunities like the Hyundai AutoEver joint venture.
• EBITDA margin target: The target remains 35% to 40% EBITDA margin range with no change in strategy.
• B2C spend controlled: B2C expenses for the consumer business were controlled in Q4, though Mappls App promotion continues as a capability statement.
• Dividend: The board declared a final dividend of INR3.5 per equity share of INR2 each (175%) for FY25.

Guidance & Commitments

Key Metrics