Half Year 2025 CE Info Systems Ltd Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Unidentified Participant - - Analyst : Yeah, hi. Thanks for the opportunity. A couple of questions. Firstly, so what has led to a sharp decline in the CNE business during this quarter? Is this just quarterly lumpiness or there have been any structural changes? And also, I mean, do you expect the CNE revenue to come back in the coming quarters? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 08, 2024 / 12:30PM, CEIF.NS - Half Year 2025 CE Info Systems Ltd Earnings Call

Question: Unidentified Participant - - Analyst : Right sir. So sir, by what extent do we expect this revenue to come back? Do we expect this revenue to come back to Q1 levels in Q3.

Question: Unidentified Participant - - Analyst : Right sir. Understood that said we don't expect any impact of Google in our CNE business.

Question: Unidentified Participant - - Analyst : Understood. Secondly, sir, if you can talk about the JV that you have signed with Hyundai, Now, will it provide maps to only Hyundai cars or will it be open to other oems as well? And what kind of revenue can be from the JV (in audible) [F 26]?

Question: Unidentified Participant - - Analyst : Yes, sir. Just one follow up on this, given that we have 40% stake in this JV. This will only add to our bottom line but not on the top line.

Question: Unidentified Participant - - Analyst : Understood. And just one last thing from my end before I join back in the queue. Is that if you look at that one edge growth, it has been at around 14%. So are we confident of achieving very strong growth in second half so that we can be above 30% kind of growth which will be required for achieving our guidance of INR1000crore revenue by 2,728?

Question: Unidentified Participant - - Analyst : Understood. Understood

Question: Unidentified Participant - - Analyst : Sure, sir. Understood. I'll join back in the queue. Thank you so much, sir, for answering my questions.

Question: Chandramouli - Goldman Sachs - Analyst : Hey, good evening and thank you for taking my questions. My first question is just trying to understand the cost movement this quarter. You mentioned that you have made a lot of investment in for the long-term growth of the business this quarter. So it looks like there's a big pickup in no material costs because of the IOT hardware business. Geopy trophy has been fully funded. So I understand this seems to be since we went public since we've been getting your disclosures financial disclosures the first quarter where we've had, you know, year over year growth in topline. But year over year decline in EBIDTA. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 08, 2024 / 12:30PM, CEIF.NS - Half Year 2025 CE Info Systems Ltd Earnings Call So just trying to understand you know, the factors between within the growth margin and also the factors around the investment you've taken in the fixed costs. And how to think about, you know, run rates around profitability going forward. We used to a 40% plus margin journey, but going forward as we chase growth where we should expect profitability for the company to settle out.

Question: Chandramouli - Goldman Sachs - Analyst : Got it. That's helpful. This is a follow up to that. If I understand, will you be able to, I think last quarter you had sized out, you know how there was an increase in expenses and outsourcing expenses. So just want to understand, will you be able to size out? I think the 3 or 4 meaningful investments you've made just, just for us to understand, you know, what, what is the size of, of the investment you're making that you are actually taking the hit on the PN.

Question: Chandramouli - Goldman Sachs - Analyst : No, I think the investments that you're making in the consumer business, the drone business, the IOT business. All those 3 to 4 long term pillars on which you're making investments if you're able to size out, you know what the investment we made maybe in crores this quarter.

Question: Chandramouli - Goldman Sachs - Analyst : Got it. That's helpful. And last question is around the Hyundai Kia contract. Congratulations on the ramp up there. I just want to understand versus the business that we've been doing on Hyundai Kia over the past 5 to 10 years. Could you just tell us this new contract? What is maybe the incremental business? Is it INR5crore per quarter, INR10crore per quarter? Just trying to understand that as we get the first full quarter benefit next quarter on this.

Question: Chandramouli - Goldman Sachs - Analyst : This just last clarification on this? I'm just trying, I'm keeping the JV as I just looking at the existing Hyundai Kia Domestic Business.

Question: Chandramouli - Goldman Sachs - Analyst : Correct. Correct. So just to understand before the domestic contract was announced, responded to the old Hyundai care business that we had was that at the INR5crore per quarter, INR10crore per quarter and now we have INR20crore per quarter. I'm just trying to understand that that is.

Question: Chandramouli - Goldman Sachs - Analyst : And, and that's jumping to 20 or on average. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 08, 2024 / 12:30PM, CEIF.NS - Half Year 2025 CE Info Systems Ltd Earnings Call

Question: Chandramouli - Goldman Sachs - Analyst : Got it. That's helpful. Thank you very much and all the best.

Question: Fema Jamnadas - Alchemy Capital Management - Analyst : Yeah, thanks. Thanks for the opportunity, sir. So, but I do understand you have already mentioned the slowdown in the reasons we had to slow down in the consumer tech. But sir, even if I, and we do understand the prerogative that this business cannot be looked at on a Q on Q basis. But on, even on a 2 year CAGR basis, if I were to look at the growth, the growth has fallen down to 7% on a 2 year CAGR basis for this particular piece. So, if you can and, and, and we have highlighted in the presentation that there were certain challenge, if you can highlight, what exactly are those challenge that we face? Is it that the use case that would be increasing are, are probably slowing down maybe because the customers are taking a bit more time. So what exactly is happening there? Or and, and on the marketing expenses on the margins over the past few last 4 quarters, we spend about INR15crore to INR16crore on marketing. So we've already been doing that expense.

Question: Fema Jamnadas - Alchemy Capital Management - Analyst : So I'm talking cumulatively, sir. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 08, 2024 / 12:30PM, CEIF.NS - Half Year 2025 CE Info Systems Ltd Earnings Call

Question: Fema Jamnadas - Alchemy Capital Management - Analyst : So, the point that I was trying to make over here is that given the fact that we've been. Spending.

Question: Fema Jamnadas - Alchemy Capital Management - Analyst : Yeah. So we've been with the, the spending intensity already is, is it has been high, historically. So what has transpired now that, you know, the spending has to accelerate and will it, will it directly have a positive impact on the CNE any segment? Will it help it.

Question: Fema Jamnadas - Alchemy Capital Management - Analyst : Okay. So sir, with on the consumer app, what are the long-term plans for monetization.

Question: Fema Jamnadas - Alchemy Capital Management - Analyst : And if you can answer the question around the consumer tech slow down.

Question: Fema Jamnadas - Alchemy Capital Management - Analyst : No, no sir. I'm talking on a 2-year CAGR basis. Our revenue growth is about 7%. Now that really does not do justice to our, to the potential that we have and what we have done historically. So if you can just maybe and even in the presentation, you highlighted that there were certain challenges in the market that we operate if you can just put some more light on, what exactly were those challenges which led to this.

Question: Fema Jamnadas - Alchemy Capital Management - Analyst : All right. So thank you so much. All the Best.

Question: Abhishek Kumar - GM Financial - Analyst : Yeah. Hi, good evening. You know, question again. Sorry to hop on you know, the growth performance. I just want to understand, you know, first off,

Question: Abhishek Kumar - GM Financial - Analyst : Yeah, just a second. Let me transfer to it. Hello. Is this better? Yeah, so you know, just wanted to again harp on the growth that we have seen. Clearly the growth was slightly below what the street was expecting. So 13.5% growth in the first half year over year. Is this as per your own initial expectation or, and or has it disappointed you also?

Question: Abhishek Kumar - GM Financial - Analyst : Okay. No, that's very clear. So, you know that the only question why maybe so many participants have asked this is you know, we have a very strong conviction in our FY 2728 Guidance of INR1000crore. But the first half, we are, you know, tracking much below the required rate. So, you know, is it, I mean it's difficult to understand right when if there is a slow down near term, but we have a conviction which is five years out.

Question: Abhishek Kumar - GM Financial - Analyst : Yeah, REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 08, 2024 / 12:30PM, CEIF.NS - Half Year 2025 CE Info Systems Ltd Earnings Call

Question: Abhishek Kumar - GM Financial - Analyst : No, fair enough. Just that the end, I mean the current growth is significantly below the ask rate. So that's, that's why the concern. But I take the point. The second question is I just want to understand maybe you know, the construct of our order book, right? We give fixed pricing and we give volume projections and when there is a slowdown, maybe in C&D any business but such a sharp slowdown in one particular quarter. Is it the, I mean, my understanding is, is the fixed price contract which gets pushed out or maybe.

Question: Abhishek Kumar - GM Financial - Analyst : Okay, maybe I, I didn't really get it. How is it? I mean, are there milestones which happened in Q1 and Q4?

Question: Abhishek Kumar - GM Financial - Analyst : Understood. Okay. Understood. My last question is on margins. So I think we have maintained earlier that 40% medium term margin is what we. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 08, 2024 / 12:30PM, CEIF.NS - Half Year 2025 CE Info Systems Ltd Earnings Call

Question: Abhishek Kumar - GM Financial - Analyst : Okay. Sure. So the current level is what we should factor in for the rest of this year.

Question: Abhishek Kumar - GM Financial - Analyst : Got it, got it. Thank you, sir. And all the best.

Question: Unidentified Participant - - Analyst : Hello.

Question: Unidentified Participant - - Analyst : Yes. Thank you, Rakesh, sir. First of all, let me introduce myself quickly. So my name is (in audible) [Pia] and I am a proud rated investor in MapmyIndia. So this is the first time I'm attending this conference call and thank you for the opportunity given to me for asking the question. So yeah, I will not ask for multiple questions. So I can understand that the difficulties take place in the market and in the business also. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 08, 2024 / 12:30PM, CEIF.NS - Half Year 2025 CE Info Systems Ltd Earnings Call So this quarter is not that much you know, bad that everyone should start firing. So my question, a straight forward question to you. We as a MapmyIndia, you know, doing the business in different segments like, you know, setting up the map and services into the desk as well. And you know, we have, we have set up another company like Clarity X for analytical Solutions. So considering all these aspects. So my question to you what I mean, what MapmyIndia can do in the long, longer term, like, you know, 7 years to 10 years from here. I'm not worried about the short term of 3 years. I'm pretty much confident on you the revenue, you know, the value we have given that I'm confident that we will fulfil that. But I'm from an investor perspective, I'm thinking a bit above of a, you know, larger broad range. So can you please enlighten me if it is possible to give me picture like where we can, you know, push ourselves in the next 7 years to 10 years of range? Thank you for, thank you sir in advance for answering the question.

Question: Unidentified Participant - - Analyst : Yes, And I have a very good.

Question: Unidentified Participant - - Analyst : Yes.

Question: Unidentified Participant - - Analyst : Yeah. Okay, sir. Thank you. That's it from me.

Question: Unidentified Participant - - Analyst : Oh, yeah, thank you. So, on the B2C side, what I see is that we are building to use cases. The first is the travel commerce and the Daily News Maples Mall. So how is the revenue share over here? And are we doing on some on something like on for booking basis or and on the travel? Also, I was saying that we are giving some discounts as well. So how is the transaction happening over here? I just wanted to understand.

Question: Unidentified Participant - - Analyst : Okay, so, but I just wanted to understand what exactly we are trying to do on our B2C side?

Question: Unidentified Participant - - Analyst : Yeah, B2C is the Maple. So we are building the travel commerce. Now, I can see Maple small. And so how is the, how is the opportunity size or how big is the opportunity size are we looking at going forward?

Question: Unidentified Participant - - Analyst : Okay. Thank you.

Question: Unidentified Participant - - Analyst : Understood. Thank you.

Question: Sameer Dosani - ICIC - Analyst : Yes. Thanks for the question. Am I audible.

Question: Sameer Dosani - ICIC - Analyst : Sir, Typically if he's stronger, it's (in audible) [two in c] any segment. So should we expect this is the order book that it should be stronger and if I understand that [it's two you] know, this series and Business. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 08, 2024 / 12:30PM, CEIF.NS - Half Year 2025 CE Info Systems Ltd Earnings Call

Question: Sameer Dosani - ICIC - Analyst : Okay. Am I audible, sir?

Question: Unidentified Participant - - Analyst : Yeah. Am I audible?

Question: Unidentified Participant - - Analyst : Yeah, sir. My question revolves around this JV which you have announced with Hyundai, Kia. Sir in India, you know, it took us considerable time to build this map business, the kind of detailing and precision we have on the routes. Now we are trying to replicate the same in a foreign geography, right? With this JV partner and you have also indicated that in FY 26 you will start to break in the revenues. So I was just thinking, would it be possible for you to quickly scale up that JV, given that the Indian business has taken so long to kind of achieve that level of proficiency. Is it that the JV partner is bringing on something on the table for us to ramp up that quickly?

Question: Unidentified Participant - - Analyst : Okay. Got it.

Question: Unidentified Participant - - Analyst : Okay. So data will be sourced through this local partners or local agency as you call it and using your tech, you will develop what we have in India right now. And the technological part, some would be assisted by Hyundai.

Question: Unidentified Participant - - Analyst : Okay. And sir, could you please elaborate this $4 million which you have outlined? I mean since when will we start investing this? And exactly where these investments will be around this 32 odd road number $4 million.

Question: Unidentified Participant - - Analyst : Okay. So the investment will start from this month. And sir, can you just elaborate this where these investments are, means what is the outcome of this investment of this 10 million that we are trying to achieve?

Question: Unidentified Participant - - Analyst : Understood. So basically the source code or the map is a development phases where our capability. But on the front end, it is the Hyundai Auto care software which the client will see or the user will see as a user interface.

Question: Unidentified Participant - - Analyst : Got it. But then wouldn't there be you know, conflict of interest? Because then let's say we already uses your software and you have also used their own software and then you're competing against each other. Right?

Question: Unidentified Participant - - Analyst : Just now we explained in BYD, the software can be something else apart from Hyundai Auto care, right? So if that software is kind of provided by us, then aren't we kind of provide.

Question: Unidentified Participant - - Analyst : Through the JV?

Question: Unidentified Participant - - Analyst : Okay. Got it, sir. Thank you for all the clarifications all the best.

Question: Sameer Dosani - ICIC - Analyst : So thanks to the opportunity. Sir, C&E segment. Should we expect normal season? Like H2 is always heavy? So should we expect H2 to be heavier for C&E segment? That is one question second. How should I think of the margin? Like obviously, now we are at 36% to 37% EBITA margin. So we think this is a new level of EBITA margin for us or should we expect this module to record in H2 or when, when do we expect this to recover?

Question: Sameer Dosani - ICIC - Analyst : Right.

Question: Sameer Dosani - ICIC - Analyst : Okay.

Question: Sameer Dosani - ICIC - Analyst : Okay. So it's true, obviously, with revenue growth, we should see that and, and that's my assumption. Now on here, should we think that JV margin would be higher than our own company level module because we don't have to do SLM, right? We don't have to do sales marketing, etc So how should I think of the margins of JV.

Question: Sameer Dosani - ICIC - Analyst : Thank you. Okay. Got it. And just one of festive season sales in auto is already covered in Q2 numbers or it is something she is getting Q3 normally.

Question: Sameer Dosani - ICIC - Analyst : So festival So basically on an OEM level, there is a stocking of, of, of vehicles. Yeah, for the festive season. And that's a higher volume for so is it only actually Q3 or sorry? Is it only actually Q3 or will it come in Q3 for us?

Question: Sameer Dosani - ICIC - Analyst : Yeah, thank you. Thanks, sir.