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Broker’s call: CE Info Systems (Buy)

Target: ₹2,500

CMP: ₹1,965.7

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 per cent q-o-q (up 36 per cent y-o-y) led by C&E Market Segment which was up 8.8 per cent q-o-q (up 70.9 per cent y-o-y) and A&M Market Segment which was down 5.8 per cent q-o-q (up 12.5 per cent y-o-y).

EBITDA margin decreased sequentially (down 585 bps QoQ) led by increase in overall cost. IoT-led business EBITDA margin was at 10 per cent in Q3-FY24 vs 8.2 per cent of Q2-FY24 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 Automotive and Mobility Tech; 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 per cent over FY23‐26 with average EBITDA margin of 43.3 per cent over the period.

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