Release Date: May 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CE Info Systems Ltd (BOM:543425, Financial) achieved all-time highs in revenue, EBITDA, and PAT for Q1 FY24.
- EBITDA margin for the map-led business was strong at 54%, and the IoT-led business saw an increase to 6.3% from 4.0% last year.
- The company outlined a 5-year vision for growth and is laying the foundations for long-term success.
- The Mappls MapmyIndia app has seen a surge in interest and usage, becoming the top app in the app store.
- The company is experiencing broad-based revenue growth across automotive, mobility tech, consumer tech, and enterprise digital transformation segments.
Negative Points
- Despite the strong performance, the IoT-led business still has relatively low EBITDA margins compared to the map-led business.
- The company faces potential competition, especially given its high margins, which could attract new entrants.
- There is uncertainty regarding the long-term sustainability of margins, especially with the expansion into lower-margin IoT and drone businesses.
- The international business is still in its early stages and not yet a significant contributor to revenue.
- The company has not provided specific revenue projections for the drone segment, adding uncertainty to its future impact.
Q & A Highlights
Q: Since the last 2 quarters, C&E is showing good growth and its contribution has increased than A&M segment now. How do you see this growth going forward in C&E segment? And also, how are solutions used on ONDC ecosystem?
A: For us, it's our business growth, we look at it as a combination of A&M and C&E. The specific contribution of one versus the other on a quarter-on-quarter basis, it's not something we look at. Our objective is to grow our business across the board. Specific to ONDC, there are a ton of use cases, which can make ONDC-based commerce and commerce players much more competitive, from a cost efficiency point of view as well as a customer experience point of view, and that's why they should be using MapmyIndia.
Q: July month, automobile sales growth has been very strong. How do you see growth for A&M segment for the year?
A: We will be in line with or above industry growth. It's a pretty steady business as more and more new platforms go live in the next year, especially the large EV platform, then we'll see some even more uptake. So it's a steady state right now, and we're on track for what we want to achieve over the full year.
Q: Can you tell me where this growth is coming from and how are we placed for FY24 and '25?
A: The growth is coming from across our market segments and across our products. This includes automotive OEMs, mobility fleets, logistics fleets, consumer tech companies, traditional corporates, and government. We have a large open order book, and as we deliver on that order book, our revenues start happening. For this coming year, we are planning for a 40% plus type of growth.
Q: Can you tell me about the drone business, what services you're into, and the total addressable market of this segment?
A: In drones, we are a full-stack solutions provider. We can supply drones, provide services based on drones, and act as systems integrators. The market segment includes mapping and survey, smart cities, state-level government projects, and private sector needs like manufacturing or energy companies. This is a large addressable market, and we believe we can participate in it strongly in the time to come.
Q: How do you see the mix of growth between map and IoT services, and how will this impact margins?
A: We look at all of them together as three pillars of the company. Our objective is to grow our profits. We are making significant investments in advancing our maps and expanding our software solutions. Our DNA of execution is to make sure that we are capital efficient, and we believe we will be in a good position.
Q: What is the growth from international businesses, and how do you project yourself in the international mapping market?
A: We are actively building international maps for various geographies where our customers are. We are starting to see customers taking us for our international maps. This is a story that will develop in the next few years, and we are working hard towards that. Our focus for this year is on the India story.
Q: Can you give us some sense on the number of IoT devices sold for the quarter?
A: We talk about the IoT device volume on a yearly basis. We are on track, and it's going well. Specific numbers will be shared at the end of the year.
Q: Can you give us some color on the geospatial analytics solutions that went live during the quarter?
A: Customers are using our geospatial analytics for various purposes like retail expansion, credit risk assessment, and workforce management. This includes banks, energy retail companies, QSR companies, fintech companies, and more. Our analytics platform allows them to correlate their first-party data with market data for better decision-making.
Q: How are the contracts done with the OEMs for the auto business? Are we getting the revenue upfront or is there an annuity part?
A: The auto business involves new platforms every couple of years with a bunch of car models. Revenue is both at the time of sale of the vehicle and potentially additional monies per year. There are more use cases across our NCASE suite that we are upselling to the OEMs.
Q: Regarding the drone services, do we provide pilots and drones on a need basis?
A: We are not a pilot rental company. When we talk about drone services or solutions, we mean providing mapping and data analysis services using drones. This includes capturing data, processing it, and delivering relevant outputs to our customers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
