C.E. Info Systems Limited (MAPMYINDIA) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the CE InfoSystems Ltd. Q1 FY27 Earnings Conference Call, hosted by Arihans Capital Markets Ltd. As a reminder, all participant lines will win the listen only more, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Natasha Singh from Arihans Capital Markets Limited. Thank you and over to you, ma'am.

Thank you so much. Hello and good evening to everyone. On behalf of Arihan Capital, I thank you all for joining into Q1FY27 earning conference call of CE Info System Limited. Today from the management, we have Mr. Rakesh Kumar Vermasar, Group Chairman, MD, Mr. Rohan Vermasar, Joint MD, Mr. Anuj Jain, CFO, Mr. Saurabh Samani, sir, the CS of the company. So without any further delay, I'll hand over the call to the management for their opening remarks. Over to you, sir.

Thank you, Natasha. This is Akesh Verma. I'll briefly talk about the Q1 achievements and the things that have happened. As we have reported on the stock exchange, we had Q1 FY27 revenue is up by 14.9% year on year. The details are there in the... In what we have loaded on the stock exchange, we have also uploaded the investor presentation where you can see the details of our performance. I would like to bring to the notice of all that our framework for reporting the market segments, We have changed from A&M and C&E. Which used to be there for last five years, calling it automotive and mobility, and the other one was consumer tech and enterprise. The new framework is simple, easy to understand, and it is straight away automotive, enterprise, and government. So these are the three segments. Market segments in which we operate and we earn our revenue from. If you have questions on those, we will certainly be happy to answer that. The third point I wanted to inform all of you, and it was already announced on 30th of June, the appointment of Rohan Verma as the Joint Managing Director of the company. And with that, the company is now having stronger leadership, and it should show up in the times to come. With that, let me ask Rohan to give you some of his perspective.

Thank you, Mr. Verma, and good evening to everybody. This is Rohan Verma here. So, two broad points from my side. One is that, you know, and we have written this kind of in our Presley's and investor presentation. Would love if you kind of go through it in more detail. But essentially, on AI as the first point. That AI is not new to us. We've been using AI for the last five plus years, maybe six, seven, eight years, to update and enhance our maps. It's one of the reasons why our map is the best quality and built efficiently. But we've also been building AI capabilities into our products and delivering more features and benefits to our customers. Now, what we are doing from the recent times is leading heavily into AI. Accelerating and increasing our push into AI-native product development, AI-native product offerings, and AI-native as an organization. And that will really drive us.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may please press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Anmol Garg from DAV Capital. Please proceed with your question.

Yeah, hi. Thanks for the opportunity. And I have a few questions. Rovan, firstly, congratulations on the JMD position. Just wanted to understand what is your key focus area for the first couple of years? Any particular industry or vertical that you want to focus on the business here on? That will be my first question.

Sure. See, there are a lot of opportunities ahead for us, as I kind of mentioned in this matrix of products multiplied by industry verticals, right? Some of the big areas that we've been seeing as green should, there is a, obviously, there's a very strong whole business where we have extreme amount of market leadership, Which is the math-based automotive business and the enterprise. This is an app-based enterprise business, and that is being looked after very well already. It's the driver for profits and kind of base load of revenue, and there also there are... Other places where there's stronger growth in the nearer term also possible, where we've been investing behind, which is the public sector business, which is... Like that in public sector, to be honest, there are lots of other opportunities across a range of products.

Thanks, that's helpful. Second is, you know, last year we indicated that there's a reduction in a contract in large auto EEM. Now, I just wanted to understand that did this happen in the 2H of last year, and if that is the case, then 2H of FY827, could it be much better this year, given that we have a weaker base over there?

Uh, I'm more. It was not, and it is not a reduction in the contract. Some of the vehicles probably are not, the OEM has decided not to have the entire technology, not just ours, but the technology all related to that not to put into the vehicle at last year. Now, that may continue this year. But the two things are to be noted. One is the worst case scenario could be that the contract period might get extended or they might change, which we believe they are in the process of changing, where more vehicles will come with our technology.

Right, sir. Sir, just wanted to understand when did it start in last year, because that will give us an idea to look at our buy-on-buy growth for the next couple of quarters.

It got time shifted. As Mr. Verma explained, this is time shifted. And second half is when the time shifting, let's say, started happening. I actually would have drawn... Thank you.

Understood, understood. And one last thing is, you know, in this quarter, we have stated in our presentation that there was a 4 crore write-off in one of the clients. So can you talk a little bit more on it? And is this amount recoverable over the next few quarters?

Ikeelax. If that not happened, our EBITDA would have been, instead of 40.2, it would have been 43+.

Right, right.

So, from that perspective, can we expect that our EBITDA over the next couple of quarters could be in this 43-44% kind of range?

We have been always saying that we have kept the target for us to do a 35% plus for the whole year. So, quarter by quarter, you will have to see what happens every quarter.

Sure, sir. Thanks. Thank you for answering my questions, and I'll join back in the call.

Thank you, sir. The next question is from the line of Amar Morya from Lucky Investment. Please proceed with your question.

Yeah. Hi, sir. Thanks a lot for the opportunity. Firstly, on the standalone business, if I see the map-led business, map-led business had actually... And this is the hardware part of the business which has shown a growth in the overall growth in a standalone piece.

And secondly, if I see the subsidiary,

subsidiary revenue has again came down. So what has happened to the growth? Why the growth is not coming into the poor business?

I mean, this, Amar, just to, I mean, You have to look at the console. This standalone will not give you the right picture because, as we've explained before, My India, because Mapundia has credentials, and then it gets subcontracted for government to the... What happens from the IoT system? In kind of analyzing standalone and consolidated, at standalone, you should look at the consolidated and then you can look at independently, let's say the subsidiary. At the console level, what you see is map-led and IoT-led, which is, you know, And IOT lead went from 23.4 to 41. Government is a slow starter in the years. It is, Q1 is...

Only, sir, now in terms of the growth, If I see the Q4, there were a few backlogs which we talked about on the government side which were likely to be pushed in this year as a whole. Then, then, how we should look at overall growth in this quarter on an also basis.

This other, what we had disclosed at end of Q4 or FY26 was an open order book of 1750 crores, which had grown, I think, from 1500 crores the previous year end. So that gives us strong kind of visibility into previous to 1500 crores, it was about 1350 crores was the open order book. So that's grown healthily. And that's what gives us the visibility into future growth. You know, I'm not, we can't obviously comment quarter on quarter what is going to happen. You can keep seeing. Every quarter, this quarter has been a good quarter. We're not a book. You know, we are confident about what we are going to do in the time to come.

So, basically, you are saying on a full year basis, I mean, this open order group will populate into the revenue and the growth should be visible. Because, I mean, frankly speaking, the growth we are expecting, right, a company like us. I mean, it should be a much higher growth, and specifically on a core business basis, the growth should be there, right? I mean, the map-led growth, if you see in this quarter, is basically very, very flat kind of a growth. It is largely the IoT which is basically growing, and that is the reason the profitability has also got impacted, because obviously the IoT business will not have a similar kind of profitability.

I will suggest that if you understand the overall MapMyIndia business, it is MAP-led, IoT-led. It is automotive, corporate, enterprise, and government. And within automotive, two-wheelers, four-wheelers, commercial vehicles, like that. In enterprise, again, you have all kinds of industries, whether it is BFSI. Quick commerce, e-commerce, or you name it, okay? And the government also, it is so many different verticals. Now, if each of them, if you start trying to look at that why didn't two-wheeler grow or why didn't quick commerce grow, it becomes a, it doesn't give, it should, it will not give you a true picture. What you have to really look at is one or understand that once we are so well diversified that our risk is minimized. Imagine even one contract that got delayed or let's say the one Anmol was talking about that it didn't impact us adversely to that extent because we were still diversified within our overall business. I suggest two couple of things. One is look at the annual scenario, number one. Second is look at the diversification that we have because the concentration also you people look at very closely that how much is the concentration. So even that is well diversified. So this removes the risk of a company's growth, a company's profitability and all that.

Short, short.

Sure, sir. Thank you. Thanks so much. Thank you, sir. Thank you, sir. The next question is on the line of Amit Chandra from HDFC Securities. Please proceed with your question.

Yes, sir. Thanks for the opportunity. Sir, my question is on the order book. Obviously, we have a healthy order book that provides us the visibility. But within that, if you can provide the mix of the order book, how much of that would be automotive, enterprise, and government? So that would be helpful to understand which segment will drive the growth. And within the enterprise, which is the focus vertical for us? So, you know, if you can update on the recent deal wins that we had, especially with the e-commerce, large e-commerce player, where we are in terms of the traction there and the scaling that deal.

Rohan will tell you more, but I'm sure you are from Mumbai, correct?

Yes.

Now, if you see what Amazon now is doing, have you... I don't know if you have used Amazon now for quick commerce or not, but if you, MapMind is powering it, correct? Okay. And you can see our logo also at some places. So what I'm trying to make is every industry, within the industry also certain activities. Get impacted by some of the technologies that we bring in. So just thinking that quick commerce will only grow or that BFSI will only grow, I don't think it doesn't give us any direct picture or direct clue. What we look at is what the technology products platform we have built or we are continuously building now with AI, the delivery system is becoming much, much better and useful for the customers. Again, a combination of all of that is what leads us to the entire growth story. But Rohan, you can add something.

Yeah, so we disclosed I suppose currently, Amit, the order book split by fixed pricing and volume-based. So that last year we would have given, end of last year, meaning three months ago, we would have given that split to give a sense of what is fixed visibility versus what is volume-based. A-E-G. We are going at different rates. The first effort of the team is to maximize the order bookings and then from there the execution or the billing and hence the revenue. But we disclose it right now, the order book, as volume and fixed and we do this once a year.

Okay. Okay. And so my second question is on the write-off that we have taken in this quarter. So just a connection to that in terms of the government business that we have. So if you can tell us what part of your receivables would be from the government contracts and, you know, In terms of the incremental business that we're getting from the government contract, is there any further risk of, you know, any kind of write-off that we're seeing or any, like, collection delay that we see in the government contracts versus the others? And in terms of our three-year strategy, how we want to approach the government contracts?

The second part of your last question, which is kind of wins across enterprise. You know, we've talked about this mobility and logistics wins, the BFSI wins, and the... So there are winds across. The company has. Thank you. We also have to be careful, and I think that's some of the things that we are looking at very carefully, continuing to look carefully. Part of that, and this write-off was kind of as part of that only.

The reason we did the write-off was when we were 100% sure. We decided that it's better to do the write-off than just...

Okay.

And in terms of the overall receivables that we have, what part would be from government contracts as of the end of this quarter?

We must have shared in the FY26. in the balance sheet, but The majority of the receivable will be from government.

Okay, everyone. Thank you and all the best. Thank you, sir. Thank you.

Thank you, sir. Thank you, sir. The next question is from the line of Gautam Rathi from CWC. Please proceed with your question.

Hi, thanks for taking my question and congrats on a good set of numbers. I have a few of them, but just before the question, Mr. Gautam, you just clarified. The impact due to this receivable write-off is only 80 lakhs on the P&L write, but the press release presentation which I read, it says EBITDA margin was impacted by 4% due to this 4 crore one-time write-off. So I just wanted to reconcile because if I take 4%, it comes to the write number. So if you can clarify that first.

Okay, let me make you understand. Approximately four crores was the one with our And back-to-back, there was a payment for $300,000, and back-to-back, there was a payment for $300,000, I have to make that payment of 3.2 CR, and I am not going to get the fourth row CR. So the counting treatment of that has been is net 80 lakhs.

Okay, so in your P&L, the charge-off is only 80 lakhs. So that means your EBITDA margin, which you have written in the presentation, that it is impacted by 4% is actually much lower. It's about 1.5%.

The EBITDA module is impacted by the back module. 80 lakhs are impacted. EBITDA margin impacted more, 4%. That's what he's trying to understand. EBITDA margin impacted 4%. Because that write-off that happened has gone into the other expense. And that the payback, what we don't have to make the payment has gone as an other income.

Understood. So, your net impact is 80, but actually the reported EBITDA is impacted by 4%, but it's coming in other income that is below the EBITDA. That's what you're saying. Right.

You got it.

That's why. Okay. Understood. Very clear. Understood. Second, just actually now... Two things. One is, can you share some update on your international regions, which you had quoted some time back? How is it going? How is it progressing? That is one. And second, also, if you can help us understand the seasonality of the services part of the IoT business, right? Because my understanding, or at least the way we look at it, we thought it's much recurring business and over a period of time, but there seems to be some seasonality there too. So if you can just help us understand that better also.

Sure. Let me ask you the second one first. It's easy. It's something that we've explained before, which is see any immediate growth that you see in IoT. It's not a quarterly seasonality, Gwassam. Thank you. I will. For example, we talked about at the end of Q4 that, you know, two very large IoT accounts Both an enterprise business and the government business. Currently, what that means is that hardware will grow first, which will be lower margin, and then the stats will kick in. So, it is a continuous, you know, there's a previous stats revenue that is coming, and then there will be a new stats revenue that will come. So, you know, saying that is there a seasonality, there may be...

So let's not, just the revenue part, like you said, right? So it's a, when it moves from hardware to services over time, which you get, it is a cumulative, right? So every quarter you keep on adding hardware, the revenue of the services will keep on flowing later in the coming quarter. So logically, the services revenue is a buildup quarter by quarter, which means the old revenue plus the new revenue will keep on stacking up, right? I am just trying to understand, if you think about it that way, so going from 37 crore in Q2 to FI26 to 27 crore in Q3 to 24 crore in Q4 and to 18 crore in Q1 of the services part of the IoT revenue, that is the only situation I am trying to understand.

See, I mean, Q1 to Q1 is 16.3 to 18. I think what... What is getting confused is you're looking at sequential quarter, but our billing cycles for services varies. It might be yearly also, it might be two yearly also, or it might be monthly, or it might be quarterly, or it might be six monthly. So Q4, historically, if you've seen the IoT let, is a large number. So comparing Q4...

Actually, okay, fine, I'll just take it offline, just if I mail the last one.

Yeah, the IOC, the international business, I'll tell you, huh? International business, yeah, things are going fine. So, I mean... Good morning, everyone. See that that is... We've shown it in the financials. It has reduced. So what that means is, you know, some, like we said, you know, we are continuously kind of monitoring what's happening in the JV. That's part of our international business for Southeast Asia. Like that, we are making other... Middle East or One of the things that we're doing is trying to sell our full stack of solutions, you know, map-led and IoT-led. So it's still developing. You know, we have to be patient, especially in Southeast Asia. But, you know, it is an interesting, exciting market from a medium-term point of view. And we are continuously doing some course correction or the other, so that we ultimately kind of win that, win the international business also in a good way.

So, in the current revenue, there might not be a material contribution directly into our P&L on the revenue side? No, it's not.

Right? That's fair?

Thank you, sir. The next question is from the line of Abhishek Jain from Chris EMS. Please proceed with your question.

Thanks for the opportunity, sir. Sir, in automotive segment, I just wanted to understand how is the mix in terms of the two-wheelers, passenger vehicle and CEs, in terms of the revenue.

I mean, it's all shown in the automotive. We have explained it. And we have also given, if you see the highlights, we've talked about in automotive, the wins that we've had across a leading two-wheeler OEM, even an export maps program we have won for an existing passenger vehicle OEM customer for international. Some of the deployments that have gone live is like Data Sierra, EV, for the EV trip planning. Four new vehicle launches have happened across two-wheelers like Suzuki, Vespa, Richard. And some IoT deployments which have happened in FAST and some other OEMs across LineFit and up to market. And in general, kind of we are building up our business in a gradual way across this AI-powered cockpit, in-vehicle intelligence, SDV, and TV charging network. So I think it's on the right track, and it's looking good at a total level of auto.

So, I think that your revenue, more than 75% will come, most probably, to come from this passenger vehicle segment. Is it right, sir?

We don't break out, you know, sub-vertical levels, Abhishek.

So, how is the revenue per vehicle in terms of the two-wheelers, passenger vehicle, CVs? And how much the increase you are expecting from your quotas?

This is all bespoke. Price is a function of product and use case and customers, and it's all negotiated bespoke. So I can't speak to individual prices or even, it's all competitive information.

Got it, sir. And how is the share of business in the large passenger console, like in Maruti, Hyundai, and others, Mahindan, Mahindra?

Yeah, we are the provider there. We are the supplier there.

And how much is our share of business in them?

We are the supplier there. We have all the shares in these companies, Maruti, Hyundai, Mahindra.

Okay, got it. So, sir, just wanted to understand what kind of the growth you are targeting in the automotive segment in this 4FI 27, sir?

I mean, it's looking good. I mean, target, I mean, I'm not going to talk about quantitative target, but the objective is to keep winning more orders and to execute on the orders and to kind of... As I said before, we have multiple products for multiple products, platforms, APIs, and solutions for every vertical, including automotive and sub-vertical, so I mean, you know, we are continuously kind of adding, and if you look at the history of our automotive highlights, we have been sharing it for like five years. You'll start seeing... Product.

Thank you, sir. The next question is from the line of Pranaya Jain from Banyan Tree Advisors, Private Limited. Please proceed with your question.

Hello, sir. Can you hear me?

Yeah.

Hello.

Yes, please proceed with your question.

Yeah, thank you for the opportunity. I have two questions. Number one is... I want to understand how a typical contract with an automotive plant and an enterprise plant look like. If you can spend some time on, you know, what is the typical tenure, how is the pricing structured at inception, what are the provisions for, say, a price escalation or scope expansion over the life of the contract, that would be great. So, that is my first question.

Yeah, you know, in the slides in the investor presentation, we've gone into a fair amount of detail to explain the business description. We've talked about products, we've talked about industries, we've also talked about the way that we deliver our various products, platforms, APIs, and solutions, and there we have talked about the revenue model. So I'll kind of point you to that, where we talk about product licensing and subscription. We have the device. Option of, or in some cases, providing the delivery of the solutions, services, and systems integration. So you can think that we are both an OEM as well as a, in some cases, we are able to do FDE. Thank you. So, we've explained that. I think it will be good if you go through that. It will help you understand.

Yeah, I have gone through that. So, I also wanted to understand, you know, typically, what is the tenure of the contract, like, say... There's no typical.

It varies. Some customer could be one year. I mean, there's no typical.

All right. Another question is on, say, wallet share expansion. Like, within the same customers, how do you grow your, you know, sales?

Multiple use cases. Multiple products, platforms, APIs, and solutions. Actually, that is what makes us interesting and differentiated to the customer also. Unlike any other company, there are multiple products we can offer, and also we can do solutions, especially in our segments of this map-led and IoT-led, which we have detailed out of what do we mean in map-led, what do we mean in IoT-led. It's all deep tech. It's all digital transformation driven. It is all sunlight sectors. And some which are getting adopted now and in the future. So in every customer, there are opportunities for wallet expansion. And that is what the cadence is for our teams in existing customers. And then we also kind of replicate what we have done for that customer to other players in that industry. And that's kind of how the business, you know, kind of the order book and then the billing.

Understood. Got it. Thank you.

Thank you, sir. The next question is from the line of Jainam Doshi from Chris PMS. Please proceed with your question.

Yeah, so just wanted to confirm like the reason for lower gross margin, is it primarily due to the change in the product mix, like higher growth of IoT hardware sales is leading to such like blended margins or how is it like if you can give a color on that.

You're talking about lower margin means lower EBITDA.

Gross margin, which is, yeah, that is also okay, like we can talk about EBITDA also, that will be, it will be,

we have not talked about gross margin, we have given you the idea of EBITDA margin, correct?

Understood, understood. And sir, how are we evaluating the digital twin cities opportunities which is unfolding? Like, are we looking at such opportunities aggressively? And with respect to the Naksha scheme being launched by Maharashtra government, will we play a role there? Like, just to understand on the government side for us.

Yeah, we are pretty well positioned in digital twin from a capability point of view. I think more we are platform.

Understood, understood. Thanks a lot. That's it, from my own.

Thank you, sir. As there are no further questions from the participants, I now hand the conference over to management for closing comments.

I mean, just thank you, everybody, for kind of joining, and we look forward to, you know, the year to come.

Thank you, sir. On behalf of Arihans Capital Markets Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines. Thank you.

Thank you.