Buy CE Info Systems; target of Rs 2500: YES Securities

YES Securities' research report on CE Info Systems

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 1.0% QoQ (up 36.0% YoY) led by C&E Market Segment which was up 8.8% QoQ (up 70.9% YoY) and A&M Market Segment which was down 5.8% QoQ (up 12.5% YoY). EBITDA margin decreased sequentially (down 585 bps QoQ) led by increase in overall cost. IoT-led business EBITDA margin was at 10.0% in Q3FY24 vs 8.2% of Q2FY24 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 35.6% over FY23‐26E with average EBITDA margin of 43.3% over the period.

Outlook

We maintain our BUY rating on the stock with revised target price of Rs 2,500/share based on DCF methodology. The stock trades at PER of 59.5x/43.8x on FY25E/FY26E EPS.

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