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Inline financial performance with robust outlook for H2FY24

Result Synopsis

CE Info Systems (MAPMYINDIA) reported inline financial performance for the quarter. Both, the sequential revenue growth and EBITDA margin were as per expectation. It reported sequential revenue growth of 1.9% QoQ(up 19.4% YoY) led by C&E Market Segment which was down 10.6% QoQ (up 15.8% YoY) and A&M Market Segment which was up 16.5% QoQ (up 23.1% YoY). There was sequential improvement in EBITDA margin(up 309 bps QoQ) led by positive operating leverage. IoT-led business EBITDA margin was at 8.2% in Q2FY24 vs 6.3% of Q1FY24 as SaaS income continues to grow.

The business outlook remains strong led by rising demand for digital mapping services and navigation solutions. It enjoys strong moat in domestic B2B digital mapping space led by diverse offerings across Map and Data; and Platform and IoT categories in key markets of a)Automotive and Mobility Tech; b) Consumer Tech and Enterprise Digital Transformation. The use cases of its digital mapping services continue to grow across industries driving business growth. The B2C Mappls application is witnessing rising traction. We estimate revenue CAGR of 39.3% over FY23?25E with average EBITDA margin of 44.4% over the period. We maintain our BUY rating on the stock with revised target price of Rs 2,625/share based on DCF methodology. The stock trades at PER of 81.3x/58.4x on FY24E/FY25E EPS.

Result Highlights

? Reported revenue of Rs 911mn (up 1.9% QoQ, up 19.4% YoY). The sequential growth was led by A&M Market Segment which was up 16.5% QoQ (up 23.1% YoY) and C&E Market Segment which was down 10.6% QoQ (up 15.8% YoY).

? Revenue Contribution of Platform & IoT stood at ~62% of total revenue (up 11.0% QoQ, 28.6% YoY) and contribution of Map & Data stood at ~38% of total revenue (down 10.4% QoQ, up 6.8% YoY).

? EBITDA margin improved by 309 bps QoQ to 45.0%, led by positive operating leverage.

? IoT-led business EBITDA margin continued to expand quarterly to 8.2% in Q2FY24 versus 6.3% of Q1FY24, due to improved product mix and operational efficiency.

? Reported PAT of Rs 336mn (up 4.8% QoQ). Net Profit Margin stood at 36.9% (up 103 bps QoQ).

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