Release Date: August 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue grew by 13.5% to INR101 crore, indicating a strong start to FY25.
- EBITDA margin increased significantly from 14.3% to 42.8%, showcasing improved operational efficiency.
- Profit after tax (PAT) grew by 12% from INR32 crores to INR36 crores.
- New customer acquisition and upselling/cross-selling efforts have shown good progress.
- The company has a robust open order book of INR1,300 crore, providing a solid foundation for future revenue growth.
Negative Points
- Sales of hardware declined significantly from INR15 crores in Q1 FY24 to INR8.9 crores in Q1 FY25.
- There was a noticeable increase in technical services outsourcing costs, which rose to INR11 crores.
- Legal issues with Ola Electric for breach of contract terms could pose a risk.
- Concerns about competition from Ola Maps and Google Maps, although the company remains confident in its market position.
- The IoT hardware segment saw a 42% year-on-year decline in revenue, raising questions about future growth in this area.
Q & A Highlights
Q: With the government focus on traditional mapping, are you part of the initiative to map 6.5 lakh villages, and how do you see revenue flow from this?
A: Yes, we are participating in the government's initiative for mapping land records, both rural and urban. We offer 2D and 3D mapping capabilities and software solutions for property tax management and urban/rural planning. This initiative will aid in our addressable market and growth.
Q: On the hardware side of IoT, we saw a significant decline in revenue. Are we facing challenges, and what is the gestation period for SaaS income to flow once the hardware is sold?
A: The decline was due to a temporary lack of funds with Gtropy, which has now been resolved. We are bullish on IoT growth, and the SaaS part of the business has shown good results. The hardware acts as an installed base for SaaS annuities, and we expect growth to continue.
Q: Regarding the INR1,000 crore revenue target for FY27-28, how do you address the lumpiness in the business, and do you foresee achieving the growth target?
A: Our revenue is predictable based on our open order book, which has grown significantly. While there can be quarter-on-quarter lumpiness, we are confident about achieving our revenue milestone of INR1,000 crore by FY27-28.
Q: Can you provide an update on the Hyundai contract and its impact on revenue?
A: The ramp-up for the new Hyundai-Kia contract has begun, and all Hyundai-Kia cars currently on the road have switched to MapmyIndia. This contract will unfold in terms of revenue over time, starting from Q2.
Q: Why are your maps not updated with current geographical changes, and why are they not working through Apple CarPlay or Android Auto?
A: Our Mappls App fully works with Apple CarPlay and Android Auto. We have the most agile way of updating our maps in real-time. If there are specific issues, we can discuss them offline. We continuously track and update our maps through various methods.
Q: Is there any pricing pressure from competitors like Ola Maps and Google Maps, and how easy is it for customers to switch?
A: We offer premium value to customers and are confident in our market position. Switching is not easy due to deep integration with our solutions. We have faced competition for years and believe our value proposition will help us maintain and grow our market share.
Q: Have there been any incremental revenues from the partnership with ClarityX, and how do the revenue and profitability sharing agreements work?
A: The revenue from the ClarityX partnership accrues directly to MapmyIndia. This partnership enhances our AI-driven data analytics and consulting offerings, increasing our wallet share and engagement with customers.
Q: Can you provide an update on new initiatives like international markets, drones, and consumer adoption?
A: We are bullish on international markets and expect significant announcements in the next couple of quarters. Our drone-based business is growing, and consumer adoption of Mappls App and gadgets is increasing. These initiatives are building up well and will contribute to our long-term growth.
Q: What is the reason for the increase in technical services outsource costs, and what can be the normalized level for this expense?
A: The increase is related to project-specific costs incurred to support revenue. These costs depend on the nature of the projects we undertake. We prefer outsourcing for project-specific needs rather than increasing internal headcount.
Q: Given the fund approval for IoT hardware, are we looking at a softer Q2, or can we make up for the lost time?
A: The business is not lost, and with the fund issue resolved, we expect increased hardware sales going forward. The more hardware we sell, the more SaaS revenue we generate in the future.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
