Fundamental Analysis Of CE Information Systems: Remember how the problem was in earlier days to find any places, distances, road connectivity, hotels and restaurants en route and estimate the time to those places? As technology updates for the betterment of people, companies that deal with technology will thrive.
In this article about Fundamental Analysis Of CE Information Systems under a brand name called Map My India. We will look at the overview, finances and future plans of CE Info Systems.
Fundamental Analysis Of CE Information Systems (Map My India)
Company Overview
In 1995, Rakesh and Rashmi Verma established CE Info Systems. The business provides software services such as Digital Maps as a Service (MaaS), Software as a Service (SaaS), Platform as a Service (PaaS), and Internet of Things (IoT) for automotive OEMs, large corporations, government agencies, developers. , and customers across industries, mostly automobiles.
In FY2023, they have added more than 250+ customers in B2B and B2B2C segments and more than 850+ customers across various industries, with a retention ratio of more than 90%. It holds a market share of about 95% in the dash navigation market and provides services to customers such as BMW, Jaguar, Land Rover, Daimler, Mahindra, Hyundai, Mitsubishi, Ford, and Toyota in the B2B segment.
Segment Analysis
The company recognized revenue from a segment known as Map Data and Map Data-related services. The sale of hardware and SaaS accounts for 15% of income; 84% of income comes from the sale of map data; and the remaining 1% relates to service exports in FY23.
In FY23, revenue from products like Map led to Rs 222.4 crore and IoT led to Rs 59.1 crore. The order book stood at Rs. 918 crore as on March 31, 2023, compared to Rs. 699 crore as on March 31, 2022, an increase of 31%. The growth in the order book represents a huge potential for business growth.
There are products for the B2C segment, which are MAPPLS and Kogo App, which create business opportunities for the travel business segment of the company.
The company serves its customers across industries such as automotive, e-commerce, food delivery, transportation and logistics, banking; financial services and insurance (BFSI), retail and quick service restaurants (QSR), telecommunications and utilities, healthcare and pharmaceuticals, government, railways, and waterways.
Industry Analysis
The Indian information technology (IT) industry is estimated to contribute nearly 10% of India’s GDP by 2025, an increase from 7.4% in FY22.
The industry is always evolving, with the demand for new technology and innovation paving the way for businesses to thrive for perfection and extraordinary concepts for survival and penetration into various market segments.
The IT business is more valuable in helping other industries improve their products and services, and it is more attractive because it is an evergreen industry.
With emerging technologies like artificial intelligence (AI) and machine learning (ML), the industry’s revenue growth in India was $227 billion in FY22 and is projected to reach $245 billion in FY23. Uncertainties in various parts of the world have caused the global economy to slow down.
To reduce inflation, interest rates were raised. The SaaS companies in India have seen a 2x growth in global market share as well as in the number of internet users.
CE Information Systems – Finances
Revenue and Net Profit
The company reported Rs. 281.46 crore in FY23 compared to Rs. 200.44 crore in FY22, indicating an increase of 40.42%. Revenues grew from FY 2019 to FY 2023 at a CAGR of 20.11%. Revenues grew exceptionally after the COVID period, helped by growth in IoT by 140% and map-led business by 27% from FY22 to FY23.
Net profits increased by 23.23% to Rs. 107.53 crore in FY23, compared to Rs. 87.07 crore in FY22. Net profits increased at a CAGR of 33.19% from FY 2019 to FY 2023. This expansion is due to the consequent increase in operating margins, which allowed profits to expand at a healthy pace.
Profit ratios
The operating profit margin (OPM) in FY23 was 40.86%, up from 39% in FY22. OPM increased by 30.34% on average between FY2019 and FY2023. This increase is due to reduced staffing costs.
Net profit margin (NPM) in FY23 was 38.2% compared to 43.44% in FY22, with an average of 32.26% over a period of 5 years. Despite the increase in OPM, NPM fell in FY23 compared to FY22. However, the decline was due to a decline in other income, which was reduced by Rs 12.49 crore.
Return Ratios
The company’s RoE was 22.50% in FY23, down from 27.04% in FY22, a 16.8% decrease. The 5-year average for RoE is 24.29%. However, as reserves increased, RoE decreased.
RoCE was 28.16% in FY23, down from 29.60% in FY22, a 4.8% decrease. Over the past five years, RoCE has averaged 21.98%. RoCE is greater than RoE, indicating that the debt is used more efficiently and that the returns to equity holders are reduced as well.
Debt Analysis
In FY23, the company’s debt-to-equity ratio was 0.03 percent, up slightly from the previous year. However, the level of debt is insignificant because it is too low.
Interest coverage is 50.91 in FY23, compared to 55.32 in FY22. This decrease is the result of an increase in interest expenses and a decrease in other income in FY23. However, this high ratio suggests that the company can comfortably cover its interest costs.
Key Metrics
The key measures of CE Information Systems are provided below
Future Plans of CE Information Systems
- The company has invested around Rs 7 crore to acquire a 20% stake in Indrones Solutions, engaged in drone manufacturing and data analytics, to increase its presence in the market.
- The company intends to expand its IoT business and develop full drone capabilities.
- Marketing activities to help build the brand and increase awareness of MAPPLS products to reach customers.
- The company intends to tap the B2C segment by investing in Gadget Space for better reach and further improvement in Map My India.
- An investment in Kogo, a gamified social travel commerce platform with a 26% investment for Rs 10 crore, would enhance its capabilities to venture into and understand the new market.
- Recent decisions of the Competition Commission of India against Google can help increase market share and presence for its business, as well as open up new opportunities such as home business.
Conclusion
As we are at the end of the fundamental analysis of CE Info Systems (Map My India), we will take a look at the company.
It operates in a niche segment of the IT industry and has the potential to expand its business by entering multiple industries. CCI fine against Google for Rs. 1,338 crore for monopolistic practices may open the door to new opportunities.
Revenues and profits increase in the growth stage, and the high P/E commanding the current valuations will be justified by the company’s growth rate. What do you think about the expansion of the company? Please let us know in the comments section below.
Written by Santhosh
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