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BACKGROUND

MapmyIndia is a leading provider of advanced digital maps, geospatial software, and location-based IoT technologies in India. Having pioneered digital mapping in India in 1995, the company have earned its market leadership position in this industry and built a strong moat by capitalizing on its early mover advantage. The company derive majority of its revenue from B2B and B2B2C enterprise customers and has serviced over 2,000 enterprise customers as of Sep, 2021.

Objects and Details of the Issue

The public issue consists of Offer for sale of ~Rs 1040 cr by Promoter and selling shareholder

Investment Rationale:

* Growth in the industry will lead to growth for the company

* New Guidelines By GOI for acquiring and producing Geospatial Data by only Indian company creates opportunity

* Marquee customers across sectors with strong relationships and capability to up-sell and cross-sell

* High operating leverage company leads to higher margins.

Valuation and Recommendation

Over FY19-21 the company sales have grown by 6%, new orders for the same period have grown by 82%. With Covid situation normalizing and , looking at good order book, we expect, conversion of these orders will happen going ahead. With this in H1FY22, company recorded a growth of 81.3% YoY and revenue came at Rs 100.3 cr. Going ahead, the company will be able to leverage its leadership position in India and with expansion in different country, acquisition of new customers and with cross sell and upsell opportunity to existing customers, we feel, the company has the potential to show good growth ahead. Since most of its products, platforms and solutions are digital, created in-house, and then deployed and delivered over the cloud, the company has high operating leverage with relatively low variable cost and high fixed cost which will enables company to grow profitability faster than revenue growth. The same is visible in H1FY22 wherein Ebitda margin stood at 45.2%, indicating higher sales is leading to high profitability to the company. Company is debt free and OCF for the company stands at Rs 83.2 cr in FY21 indicating lower working capital requirement by the company. ROE for FY21 stands at 16.6%. At the given upper price band of issue of Rs 1033, C.E. Infosystem is offered at PE of 58.8x annualized H1FY22 EPS which we feel is attractive. We recommend subscribing to the issue

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