Good morning, everyone. On behalf of Anand Rathi Institutional Equities, we welcome you all to Q2 FY 2024 conference call of CE Info Systems, MapmyIndia. We have with us today Mr. Rakesh Verma, Co-founder and Chairman of the company, Mr. Rohan Verma, CEO and Executive Director of the company, Mr. Anuj Jain, CFO, and Saurabh Somani, Company Secretary. I will now hand over the call to Mr. Rakesh Verma for his opening remarks. Post that, we will open the floor for Q&A session. Thank you, and over to you, sir.
Thank you, Shobit. Welcome to all the participants. This is Rakesh Verma. I hope some of you may have gotten a chance to look at our financials or what we have uploaded on the stock exchange. Let me say, take a minute before I talk about the financial numbers itself. The company did an investor meet in June of this year in Mumbai, where approximately 150 of you, 50 of the analysts and investor community participated. We had laid down a roadmap of where MapmyIndia is heading, saying that we are working towards INR 1,000 crore revenue with... And also the main thing we discussed on that day was how we will achieve it.
We wanted to show you a path, making sure that the market in which we are operating at this point of time with the products and solutions that we have, is based, was based on INR 9,000 crore market, and we want to achieve that INR 1,000 crore revenue. Now, since then, we have completed Q1, and now we have completed Q2 of FY 2024. The results for Q2. The second thing we have always mentioned is please look at year-to-date performance for any period, because that will give you the right picture every quarter, no doubt about it, but also in conjunction with that, look at the year to date. So when the Q2 has ended, we must look at the half year of what we have been able to achieve this FY 2024.
Then if you have to compare that, compare that with what was there in half year of FY 2023. But with this background, let me share with you that Q2 FY 2024 again hit an all-time high. Half year FY 2024 delivered robust growth across revenue, EBITDA and PAT, with strong EBITDA margins at 43.2% and PAT margin of 33.1% for the half year. So now when we look at the revenue growth for the first half year, was at a healthy 27.7%, I'm talking about for the first half year. Keeping in mind that quarter-wise revenue growth can vary, it is best to see the growth on a year-to-date, year-over-year basis. EBITDA and PAT grew by 28.9% and 31.2% year-over-year, respectively, for the first half.
EBITDA margins improved by 40 bps year-on-year to 43.2% for the half year, with operating leverage kicking in across all the business units. Cash and cash equivalents crossed the INR 500+ crore mark at the end of the quarter. Now, if we just look at the Q2 FY 2024, our revenue from operations was INR 91.1 crore, making it a total income of INR 99.1 crore, when you add the other income. We achieved an, which is, if you look at on a quarter-on-quarter, the revenue from operations went up by 19.4% vis-a-vis Q2 FY 2023. EBITDA was INR 40.5 crore in Q2 FY 2024, as against INR 30.6 crore EBITDA in Q2 FY 2023, giving a jump of 32.5%.
The EBITDA margin jumped from 40.1% in Q2 FY 2023 to 44.5% in Q2 FY 2024. The PBT also accordingly jumped from INR 35.5 crore to INR 44.2 crore, a jump of 24.5%. The PAT jumped from INR 25.4 crore to INR 33.1 crore, which is 30.3%. The PAT margin also improved from 30.3% - 33.4% for this quarter... The cash, which was INR 430 crore at the end of Q2 FY 2023, jumped to almost INR 518 crore at the end of Q2 FY 2024. Now, this is—these are the numbers on for the quarter, all, for the quarter.
Similarly, for the half year, if we look at it, the revenue from operations for the FY 2023 was INR 141 crore, and it has gone up to INR 180 crore in H1 FY 2024, which is an increase of 27.7%. EBITDA, which was INR 60.5 crore in H1 FY 2023, has gone up to INR 78 crore in H1 FY 2024, which is a jump of 28.9%. EBITDA margin, which was 42.8% in H1 FY 2023, has gone up to 43.2%. PBT went up from INR 69.2 crore to INR 86 crore, which is a jump of 24.3%.
Then if I look at PAT, it went up from INR 49.6 crore - INR 65.09 crore in FY 2024 H1, which is a jump of 31.2%. Now, the other financial information that we would like to share is always the talk between Map-led business versus the IoT-led business. Now, when you look at that, we say, we feel very comfortable, and we are happy to share with you that the IoT-led business is continuously showing a better margin quarter on quarters. It was in Q4 FY 2023, since when we started disclosing these numbers, the EBITDA was in IoT-led, it was 4%. In Q1 FY 2024, it was 6.3%, and in Q2 FY 2024, it turned to 8.2%.
If we look at the Map-led business also, it was 50.2% in FY 2023 Q4, it was 54% in FY 2024 Q1, and it was last quarter, which is Q2 FY 2024, it increased to 56.4%. So all this, basically, one can say that in every part of our business, the margins are also expanding, the margins are also improving. So with all this financial information, I'd like Rohan to talk about where all this revenue has come from and how we are and what is happening in the company currently.
Thank you very much. And, good morning, everybody. I think we're happy that, you know, the growth continues to be broad-based, be it both on A&M, Automotive and Mobility Tech, as well as, C&E, Consumer Tech and Enterprise Digital Transformation. On automotive OEM, our volume continues to grow faster than industry growth. That basically shows that it's reflecting a growing attach rate of MapmyIndia's automotive OEM solution across all cars, two-wheelers, and even now, commercial vehicles. What's also interesting is this whole N-CASE suite we talked about, our spectrum of solutions. You know, we are seeing adoption across the spectrum, meaning that the two-wheeler, EV and ICE, companies, which are going live with our navigation software. But our wins also include, for the first time, a four-wheeler OEM, who's become a customer for line fit for IoT, supplier.
That opens up a large opportunity. And then there's an OEM customer who we're providing a shared mobility software platform. As you know, OEMs are looking to offer MaaS or Mobility as a Service, business models. Our technology is now powering that. And also the commercial vehicles space. With the bus OEM, we're providing a connected vehicle software platform. In the past, we've talked about navigation, ADAS and electric, but now the C&S, connected and shared, is also seeing adoption. So that's good in automotive. On mobility, we continue to expand our business, you know, across sectors and across use cases. For example, a pretty large state road transport corporation has expanded its business significantly with us for public transit, IoT-based monitoring, and a consumer-facing app solution, as well as in G20. It's a pretty prestigious event.
The whole VIP cavalcade movement planning and monitoring was done using our, our IoT. Then on C&E side, of course, as we said before, C&E revenue can be lumpy, so looking at it quarter-on-quarter, not a good idea, but year to date, year-on-year, it's grown 32%. The wins span sectors, new age tech as well as traditional. Lot of BFSI companies are adopting our solutions, multiple use cases. We elucidated that in the investors' day's presentation as well as deck. We have pretty large payments and Fintech conglomerate using us as an example for territory and beat planning of the large field force.... as well as geospatial analytics and AI for kind of market expansion.
Large e-commerce company transporters as well as large cement companies are using us for IoT-led logistics optimization, and a large steel company is signing up for our video telematics for mine vehicles. What's also interesting is defense customers. We achieved revenue this quarter, a few of them, and so that is an important market segment for us. We want to and we will do more. This is the beginning. And then on the government side, so many digital transformation initiatives are happening, and we are well placed as a product and platform company there, whether it's in housing and urban development, town and country planning, civil supplies, or the electronics development, as well as smart cities and municipal corporation. Our maps, IoT, drone-based solutions are getting adopted. So that's going well on the B2B and B2B2C side.
What was also a pretty good highlight is this quarter, we, our B2C optionality started to open up, and we crossed the 10 million download mark on Android and 1 million on iOS. We were trending as the number one app across all categories on iOS, not just navigation, and the number one maps and nav app on Android as well. And on the other side, the monetization we do with Map-led Gadgets and subscription with its full range, that's also going quite good. So this opens up consumer for us as well. And just to say for H2, we are quite excited about the opportunities ahead, for us, especially Q4.
And then, of course, beyond four to five years, we've kind of given the parts quite in detail, grounds up, how we will achieve this INR 1,000 crore revenue. So overall, quite excited about the time to come as well. Thank you, everybody. And now, Shobit, you can take it forward from here.
All right. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mr. Shobit Singhal. Please go ahead, sir.
Congrats on a strong operating performance. So I have two questions from my side. First, on the revenue side, C&E segment growth seems to be on low side this quarter, though it grew by around 33% in first half. So sir, I need to understand which sector in this segment, like BFSI, FMCG or e-commerce or retail, et cetera, which results into lumpiness in this business, and how do you expect second half for this segment?
Yeah. Shobit, lumpiness depends on what type of contracts with which type of customers. You know, we have a combination of these kind of map data contracts, map API, SaaS subscription contracts. So it's I would say some of these contracts around big tech and e-commerce tend to be large e-commerce, they tend to be lumpy, and that's why we don't look at it on a quarter-by-quarter basis. But overall, on the years, we see C&E kind of growing. But and these others, other kinds of contracts or agreements or transactions, whether on BFSI or e-commerce, FMCG, government, defense, you know, they continue to grow. So we're acquiring more customers.
There's a large funnel of opportunities ahead for us also in H2, which is what is giving us that kind of confidence and excitement.
Hmm. Okay. And, second question is on the Ola. So I think it's for revenue from Ola, I think it contributes around 3%-5% of our overall revenue. And, they are making their own maps and solutions, and right now they are our customers as well. So how do you see the impact going forward from it?
Yeah. Thanks, Shobit. See, they're, they continue to be a customer. They're still using us. So some of these experiments happen where people try to build solutions, but we'll see, you know, whether consumers, whether it'll meet up to the standards of what consumers are looking for. If you see the way Map-led app and MapmyIndia maps are being adopted by consumers directly, and the way so many OEMs, including a bunch of others, leading EV, as well as the much larger ICE two-wheeler companies are adopting us, as well as on four-wheeler and now, as I said, even on CV side, we see pretty strong traction and customer satisfaction on automotive. And in any case, they are less than 1%.
It's an immaterial revenue, in that sense, or trivial revenue, I would say, in that sense. So, and, you know, some of these things also we do or we did when they were launching to give them a support. I mean, we got specific requests from Bhavish that: "Support us, we're trying to launch a big initiative," and we've, and we've done that. So, we're, we're happy to keep advancing our maps into 3D, ADAS, HD, 360, and we think that, you know, this will be the solution, that in the end OEMs will need, continue to need be able to offer a good solution to consumers.
Okay. Thank you, sir. So I will come on queue for another.
Thank you so much. The next question is from the line of Amit Kadam from Canara Robeco. Please go ahead.
Yeah, hi. Good morning. Just my, again, the question is on the C&E-
Could you speak a bit louder, please? Sorry, we are not able to hear clearly.
Am I audible now? It's okay.
Much better.
Okay. So then, again, the question is on the C&E. So just, with the, with comments on that particular thing, what is C&E? But, like, just wanted to check, is there a, like, is there a competition in this particular segment? Like, with, with whom you compete and how the business comes to you? It's like a case, basis, this particular thing you do it for the customer. Just can you elaborate? The whole point I wanted to just check how the, the business comes to you, and then, like, do you - do we have to compete for this particular business? Or because if that growth, growth fluctuates over quarterly, is it just the underlying, market dynamics is only leading to that rather than any competition adjustments?
Yeah, sure. See, there is probably we are by far, if only and by far, the best map and data company, map data product company. So when large companies want to have a all India comprehensive digital map data, whether for the consumer-facing maps, applications, or for their e-commerce or other kind of enterprise use cases, for that we are, we are the company of choice. The other competition would be companies like Here or TomTom, which are the global suppliers, but in India, they have negligible share in whichever contract they used to have over the last 10 years, we have dislodged them. So on map and data, we're pretty much the only company, and if there are anybody else, they're a very small sliver of you know the offering that we have.
Beyond map and data, we have a very broad set of offerings when it comes to enterprise or consumer tech companies, spanning APIs, spanning different types of software, like workforce management or workflow automation or geospatial analytics, et cetera, as well as the whole IoT, IoT-based, SaaS solution. Every vertical, we provide a suite of use cases. Be it BFSI, e-com, logistics, FMCG, or on the government side, different, different departments at central, state or local level, or the defense. And so when we go to these companies, we're able to offer them an end-to-end or pretty comprehensive suite of offerings, which we don't find anybody else in the market being able to, provide. They might provide point solutions.
So yes, there is competition when it comes to each point solution, but as a bouquet of offerings, and that to a company which is full stack in terms of map data, location data, then the software on top of it, then the IoT attached to it, analytics and drone, we don't find a competition. It's the nature of the business with C&E contracts, which can cause, in some cases, lumpiness. And that's like quarter by quarter, you might see variation. But otherwise, based on the transaction-based revenue, subscription-based revenue, those things keep going on, and that's where, which is generating the growth. So I, I hope that helps you understand a little bit dynamics of our C&E business.
All right. So what I can get from this particular thing is that when, whenever our customer wants a full bouquet or kind of a thing, then we are the only choice for current, in the current times. But only like case to case basis or some if you break it down in that particular, the value chain is smaller part, then there will be some competition for each part.
Yeah, and that's what our land and expand approach is. So we enter the customer. If we have 10 or 12 use cases, you know, they... At least we can enter with one or two, and then the upselling happens, or their own usage scale-up happens. And that's the gradual growth that we see. Like, I use the example of that state road transport corporation. There it was, we landed with one use case, and their own usage has expanded. The case of the fintech conglomerate, they were using us for maps in their consumer-facing application, and now they're using us for their enterprise use case as well, and for the Salesforce Territory Planning, beat planning management. So, that's how we are able to get in an entry.
Getting an entry is a challenge in many cases, like for any enterprise company. But once we enter, over the next few years, we are able to continue to grow the business with these customers.
Right. Right. And just my second question is, again, continuing with the previous participant on that Ola thing. What I want to just check, like, what it takes for a new guy, in terms of rebuilding this entire ecosystem. So because right now, like, the way we are in terms of use case spaces, but as things develop in India, and then the usage goes up, and it becomes so sizable for, like, a company like Ola or maybe some this our own customers, that they why there is a need for, like, a company like Ola to create this entire ecosystem, which may not be a part of their core, maybe kind of expertise, but then they could have easily outsourced and get it done, but then they're still going for it.
And second, how much time it takes for creating, recreating such kind of a ecosystem like MapmyIndia? So eventually, down the line, five years, some other company wants to do it, then whether that these guys could eventually lead to a incremental competition in this area in next five years?
Okay, let me try to address this. First, I would not like to address Ola directly. It's not fair on my part. What I would like to address is anybody.
Mm.
Now, if you think of anybody, first you try to understand what is their goal, for anyone, or it, it applies to us also. For anyone to get into any business, is it how they want to address their core business? Is, in case of maps or map-based solutions, it's very different than manufacturing something here and there, and from there somebody is getting some data, and hence that data can be used to make maps. That's available to hundreds of enterprises, where they get data through whatever ways they operate their core business, and they get the data. The next question comes up, to convert that data into maps. Then the question comes up, to continuously keep updating the maps. Now, the situation is where you do it on a real-time basis.
So all these factors, we understand over the last 20 long years, at least hundreds of companies tried to make maps.
Mm.
We, we have a long list of them and what has happened to them. Now, the next part is there is a, there is a big moat factor, there is a big network factor, and then there is a big, reliability factor. And then on top of that, map by itself doesn't become sufficient unless you have a deep tech behind it to ultimately solve the problem of the customers, and every customer is different. So, so these are the factors which lead, which is leading us to, or giving us the opportunity to keep succeeding and keep moving up. Is moving up in the value chain using map in the core, is the answer to, somebody's success, and that's what we believe, we will keep succeeding.
There may be, at times, some of these, the best word to use, people might do experiments. There might be a little bit of noise, and those factors will prevail. So, we are not. We keep a watch over it. It's not that we ignore it. We try to keep looking at it, what they are trying to do. Thanks. This is the best answer I can give you.
Okay. Got it. Thanks a lot. I'll come back again.
Thank you so much. Ladies and gentlemen, in order to ensure that the management will be able to address the questions from all the participants in the conference call, please limit your questions to two per participant. Should you have any follow-up questions, you can always rejoin the queue. Thank you. The next question is from the line of Mohit Motwani from Nuvama Wealth Management. Please go ahead.
Yeah, hi. Thanks for the opportunity. Yeah, my question was like, you know, in the first half, you have grown around 28% on a year-on-year basis. Previously, you have guided for around 40% growth on an annual basis, so which implies in the second half, you'll need to do around 52%. So is that something that you are looking for in the second half, or any color around that?
Yeah. See, I mean, I think we're quite excited about the second half, especially Q4, in terms of the opportunities ahead. And yeah, we're working towards this. And like, I think, if you look at the customer acquisition we've done in the last year, those customers are building up. If we look at internally the funnel that we have or the order bookings that we've done, in the first half of the year, I think that all gives us a fair bit of excitement, for the second half. So we are confident, we are working towards it.
So when you say Q4 in particular, you have, I mean, the revenue will start flowing through in Q4, like you are, any, you have any pipeline of projects that you expect to win in Q3? Because you have specified Q4 in particular.
I mean, I think we're just trying to give a general sense of, you know, where we see the business loads coming in and when we see. I don't want to go into specifics of what will happen in Q3 or Q4, but just to give you a sense of what we as management are saying.
I think he's trying to address that question which you made, saying that it if it was 28, now will it be 52? First is of the pre- that previous half year. In that context, he's talking about that that we see certain things happening in Q4, and that's why he made that statement. Not that nothing is happening in Q3.
Sure. One more question was around the... There's a big jump in your receivables. If I look at the cash flow, like there's a negative settlement growth impact. So is it anything to do with increase in government contracts or increase in defense contracts, anything to do with that?
No, no. Let me address that. I knew that maybe that question will come up. If you look at our receivables in terms of aging and of course collection period, first is the September billing was quite heavy. Okay? So naturally, if that was heavy and they are not overdue, there is a typical normal course 30 days collection period. We use a normal course for normal customers. But overall, if you see, our receivables aging has been in the range of 60-75 days, depending upon when the billing has happened. So in this quarter, we know we are aware that the amount of billing was quite large in the month of September. Right?
Sure, sure. And the last one, if I can chip in, Mr. Manohar. So the IoT led margin, definitely we are seeing an improvement in the last three quarters. Is it to do with the fact that number of IoT led devices are being sold less and the SaaS revenue component is increasing, which is driving this margin improvement? Or, is it that, you know, the IoT devices being sold remain very good? Can you give some color on that?
It's a combination of both. The how you position your product in the marketplace is the key. So we are trying to position in the market the IoT devices with subscription more and more. So what that is leading to increase in the subscription, which is the SaaS, and hence the margin is improving. So that's our business strategy, rather than just to sell the hardware as is and wait for a year or so.
Sure, sure. Understood. Thank you so much for answering the questions.
Thank you so much. The next question is from the line of Vimal Gohil from Alchemy Capital Management Private Limited. Please go ahead.
Yes, sir, thank you for the opportunity. So just taking forward the working capital question, so you expect this INR 89 odd crore to sort of normalize in the second half? That is, the monies will be received by the end of March, right? So you should be back to that 60-odd days of receivables. Would that be the... Would that be a fair assessment?
I can't exactly predict. Just like I said, that in the September 30th, the receivable aging is 71 days. Okay? Now, if the billing was large, quite a large amount in the month of September, it became 71 days. If it had happened in August, probably it would have been lower. So again, what would be the receivable period, receivable aging at the end of March is hard for me to predict. But I think we are overall saying that 60-75 days is the overall consideration we look at.
In general, our collections, as Mr. Manohar said, are going well. It's not that overdue has increased. I mean, like we said, we position as a product and platform company. So I think in all that sense, things are going fine. Of course, we watch this, but we are not concerned about it.
Understood. So no risk of any, any, any, overdues or any write-offs?
No, I mean, if we are very conservative, as a matter of fact, if you ask me, that even when we feel that there's no risk, but if the overdue is there for more than 90 days or 108 days, in some cases, we do try to make provisions, and you will see it in the balance sheet.
Understood. Uh-
That's on a conservative side, not on an aggressive side.
Right. Understood. So just one more question on Ola. I understand you mentioned that it's just 1% of your revenue. While I'm not trying to harp on why is it 1%, but if I were to just look at... So on an annual run rate basis, that would be about INR 4 crore of our revenue. And if I were to look at the sales of Ola, they sell about 850,000-odd two-wheelers per year. So if you were to look at the revenue per vehicle, that doesn't seem to be very high.
Is the assessment that the maps that are getting sold are probably partially sold to some of the vehicles, not all the vehicles or what?
Okay, let me help you on that. As Rohan also said, that it was a personal... At a different level, he had requested for support. At the point of time of launching, Ola had requested and made a special request because even I was involved. I said, "Fine, if he, if a CEO of Ola is making that request," of course, we didn't know that he has other plans at that time. So that's... And the investment- and it is not even 1%. Let me put it, it is lower than that 1%.
Right.
Okay? So if we did, if we did some favor to someone at some point of time, and now we find that if we are there doing it, we are watching it closely. If, if they are going to become a competition or they will also experiment and then ultimately forget about it.
I mean, I'll just align my perspective on this. There are a lot of companies in the last 20-25 years, even in India, who have tried to build maps and even abroad. But if you look at it globally, there are very few companies who have actually ended up becoming a map product company, which has been able to stand on its own. And those are extremely large companies, and even in some of the big tech, they have not even been able to externalize it as a third-party business. So I mean, these are experiments people do with a very narrow set of data that they are able to collect...
to have some solution, but it's a matter of being able to sustain investments which are quite large over time, not just money, but also a lot of technology. And then the whole use cases, which are broad enough to ensure that the map is accurate and stress tested in various ways. So I don't think at this stage we are concerned from a competition point of view. Of course, we believe that all the customers would benefit from using our maps because we continue to not just update it, but enhance it, provide more features, and you're seeing that epitomized in the Map-led app with so many different capabilities. And consumers themselves are voting by downloading it in droves, in millions now. So in that sense, we think that OEMs will continue to use us.
A few customers here and there will try. You saw Uber also in the U.S. attempt to create its own maps, and now they're back to being what their core business is. So, you know, these are things people try when they try to expand or experiment, but I think eventually they realize what is the right solution and what is the right partner who's willing to be reliable and support over long term.
Thank you. Thank you, Rohan. Thank you, doctor-- Thank you, Mr. Verma, for that detailed answer. I'll get back in the queue.
Thank you so much. The next question is from the line of Anmol Garg from DAM Capital. Please go ahead.
Yeah, hi. Thanks for the opportunity, and congratulations on good set of margin performance. So, just have two questions. Firstly, on the margin side, so we have seen strong margin performance in VANEDGE at upwards of 43%. While initially we have guided for 40% margin range in FY 2024, from that perspective, do you see investments that the company would have to make in the second half, that can bring down the margins in too much?
Yeah, I mean, it's good we have this question of margin because we want to invest. See, the levels of investments are not just for the quarter, but also for the upcoming year and also for the longer term. So there are different level of investments we are doing. We're a deep tech product and platform company, remember. We're building 3D maps, now we call it 4D Digital Map Twin. We're building different types of software for the automotive as well as for the enterprise markets. And now we have the consumer app that is seeing traction as well as drones that we have to do. So there's different levels of investments we want to make.
Of course, we do these investments in a calibrated way, and the core business, generating cash, generating margin, allows us to innovate so the company can go into a different orbit in the medium term and longer term to come. So we will continue to do those investments. And good that in the first half we have that kind of margin question.
Also, understand that while the product or platform investments are happening across the board, as Rohan said, for different types of business units, there's also investment we primarily keep making in operational efficiency, and that also helps us in make, giving us a better margin.
Sure. Sure. And secondly, I wanted to have your perspective a bit on the drone business. Currently, like you indicated, that it's currently a small percentage of revenues, but let's say in two to three years down the line, how do you see this business to be, and in what all services that MapmyIndia wants to focus on, particularly on the drone side of things?
Yeah. See, I mean, drone business is going well for us. We continue to get customers. We are supplying drones to them. We're providing drone-based solutions to customers. We are able to provide this full package of map, IoT, and drone-based platform, which allows, you know, people to map and see from ground as well as the sky, and then get, you know, software solutions for various use cases, and especially useful in urban development, for even tourism, real estate, you know, manufacturing, mining. So we're seeing a bunch of different use cases. We are positioned to be able to supply drones and provide drone solutions.
There's a large opportunity in the next few years around drones, and we are putting our full effort to do both inorganic and organic way of being able to cover the span of the drone opportunity. The way we've covered the span of map opportunity-
Or IoT.
or IoT opportunity, we want to cover a span of drone opportunity. Of course, it will not happen in day one or one quarter, two quarters, and so the third pillar is something we are building for the medium and long term. But good thing is traction is happening, and we continue to see more traction in the time to come.
Just a quick follow-up on this. Are we expecting... Are we also expected to manufacture drones, as well, or just provide services on the same?
Something that, I can't, I can't comment today, what exactly we'll be doing, but Rohan, if you want to add. I'll say that MapmyIndia is positioned as a digital products and platforms company, but you see that we have these investments in various companies in allied spaces, which are doing things in a slightly different way. There's a standalone company, and then there's a group company, so we don't want to go into specifics. But if we see an opportunity and we see value that we can create around products and platforms, and then solutions on top of that, we evaluate that....
Sure, sure. And just one last bit, from-
really sorry to interrupt you. Can you
Yeah, yeah, sure, sure.
Question queue?
Sure, sure, sure.
Thank you. The next question is from the line of Vishnu Gopal from Singular Capital. Please go ahead.
Yeah. Hi, sir. This is more question on the cost of materials in your financial statements. So despite the rapid-
We cannot hear you. Can you speak up, please? Sorry.
Mr. Gopal, if you
There's some disturbance in your line.
If you're using the loudspeaker, may I request you to use your handset, please?
Sure. Is it better now?
Not very clear.
Uh, hello.
Better now.
Is it better?
I don't think the voice is coming through.
Well, as there was no response from the current participant, we'll take the next question. The next question is from the line of Dhavan Shah from AlfAccurate Advisors. Please go ahead.
Yeah. Thanks for the opportunity, sir. My question is on the Map-led EBITDA performance. You mentioned that well, because of the operating leverage, very, you know, the margin improvement during this quarter. But, you know, if I look at, you know, the quarter-on-quarter basis, the revenue growth, the hardly INR 2 crore quarter-on-quarter improvement in the revenue. And if I look at the EBITDA, the same number has been improved. I'm unable to understand, you know, how the operating leverage has helped us, you know, in the Map-led business. And can you please share the revenue breakup between A&M and C&E under the Map-led during this quarter versus the last quarter?
Three things. One is, we shouldn't look at the company Q-on-Q. We've said year-to-date, year-on-year. Second is, this, I think. Yeah, so that's on the Q-on-Q and year-on-year kind of operating leverage question is across the whole company. I don't think, I don't know if it's a specific point. It's on the whole company as a products and platform company. And A&M and C&E split we have given. In Q2, we got INR 47.9 crore from A&M. And the next one, we got INR 89 crore from A&M. Versus C&E, we got INR 43.2 crore in Q2, and H1, we got INR 91.5 crore.
Right. But, but this is for the entire year, right? Under the Map-led, what would be the A&M revenue and what would be the C&E revenue, and how has been the mix changed?
Yeah, we don't give that split.
Okay. Okay, okay. But C&E, roughly, can we assume that it is roughly INR 30-odd crore, kind of the quarterly run rate that we are maintaining at this moment?
I missed your point, can you-
In the C&E business, under the Map-led, is it safe to assume that we are maintaining roughly INR 30-odd crore kind of quarterly revenue run rate?
There's no split that we specifically give, so I don't want to comment on specific numbers-
See, these splits can't be even predicted that easily. So that's why it's not that we don't want to, it becomes difficult, and any statement which can be maintainable. The business is going, growing across all sectors, A, M, C, E, and also the consumer now. So I think what, if we are able to achieve the growth of the revenue overall, and also giving... are able to maintain a healthy margin, 40% is what we have given the guidance. If it is more, will it, if you say that will it get used up in some investment, or it will not be used up in some investment, if we bring operational efficiency, it's a matter of time.
Right. Right. Got it, sir. Yeah, that's all from my side. Thank you.
Thank you so much. The next question is from the line of Moez Chandani from Ambit. Please go ahead.
Hello. Yeah, hi. I had a question on the B2C part of the business. So can you give us some idea of how you plan to monetize both the B2C app, Map-led, as well as the investment that you've done in Kogo Tech Labs?
Yes. Yeah, thanks, Moez, for that question. It's actually quite exciting, the B2C opportunity, although it will take some time to build up. Obviously, it starts with creating a large, engaged consumer base, which is what we have been able to achieve and cross that milestone in Q2. On the back of which actually there's, N number of, monetizations we will look at in the time to come. First, obviously, being upselling the gadgets or products and subscriptions of our own. And so that combination of via app or offline and online, you know, commerce of our own additional products, to Map-led app consumers, because these gadgets are usable, like the dash camera or the trackers or the smart helmet kit or the, you know, smartphone-connected infotainment systems are all, you know, powered by Map-led app, but being at the center.
And so these Map-led gadgets will be one form of, and the subscriptions will be one form of monetization. But beyond that, a bunch of different interesting, you know, advertising and additional commerce opportunities will open up. We'll talk about that more in future quarters, not right now, because we are building it up. But I think that is an exciting opportunity for both consumers to be able to discover and transact through commerce, as well as discover interesting products and services in a hyperlocal way. That will be one. And Kogo is super exciting. This is actually a travel commerce play, where you can get best prices for travel bookings, like hotels or flights or even car rentals or other travel-related gear, by becoming a member and paying a membership subscription.
And we are seeing the Kogo app and Kogo platform build out. There's an OE business that we do together with Kogo to enable our OEM customers to increase gamification, loyalty, and commerce relationships with their consumers. That's one side. But just on the consumer side, if you're, if you're tracking Kogo, you'll start seeing a very new age, you know, map-based, but not only a map application, which is gonna become a travel, you know, app and travel-based monetization on its own. And obviously, we will do integration between Mappls app and Kogo, because you use Maps for stepping out locally or to travel. So this is a very interesting, exciting phase we are entering for the company around B2C, separate from the B2B and B2B2C business. Finally, there's a synergy.
The more B2C, you know, consumers using and enjoying our app, obviously it has a good knock-on effect on B2B adoption and B2B2C adoption amongst consumer-facing apps, third-party consumer-facing apps, or automotive OEMs. That's overall B2C.
Sure. Okay, thank you for that. My next question was on your margins, especially in the IoT-led business. So your sale of map data and services, that contribution has remained constant from Q1 versus Q2, but your margins expanded by 200 basis points. So what exactly drove this margin expansion, since your subscription revenue sort of was more or less constant across the quarters?
You're asking about the IoT,
Yes
margin expansion, right?
Yes.
Not the map mix.
No, not the MapmyIndia.
Yeah, yeah. IoT, it's a combination of product mix and choices that we are making about which products to sell and which products not to sell, and operational efficiency. There's. See, there's many levels to growing the margin in the IoT business. We are quite bullish about it in the longer term. And so every quarter, the execution on this IoT business is across different aspects. There's a SaaS income kicking in, that will have an impact, but there are also other levels to grow the margin steadily over time, and that's why you're seeing this gradual improvement. And we continue, we expect to. We want to make this continual improvement in margin on the IoT business.
Okay, thanks. Thank you so much.
Thank you. The next question is from the line of Sameer Dosani from ICICI Prudential Asset Management Company. Please go ahead.
Thanks for the opportunity and congratulations on a good set of numbers. So if you look at margins in IoT, what is the kind of, is there a range, at a particular scale that you want, want to, reach in IoT business? That's my first question.
Are you asking where we want to take the-
Margin range. Yeah, yeah, margin range of IoT business. Is there a margin range that you're targeting, and what scale do you think that will reach? And if you can clarify, is there some seasonality in this business, like H2 is heavier, et cetera? Thanks.
I mean, so, you know, it's this IoT business is still in growth phase. We see pretty large opportunity-
Early growth.
And so it's in early growth phase, so we want to keep investing behind that growth. The good thing is, you know, MapmyIndia has been historically a pretty fiscally disciplined company, tight on execution, tight on operational efficiency. So when we acquired Gtropy, we merged our IoT business into that. Then, you know, every quarter there are things that we can do to create that same discipline or rigor that we have in MapmyIndia. Of course, the margin structures, terminal margin structures, will be different in the two businesses. But we want to keep... You know, we are, like, focusing on growth as well as on improving profitability, and so it's a balance we are maintaining every quarter.
I don't want to say till what time, until what level or what range, but obviously we still see growth and growth potential in the margin structure, besides growth in revenue for this company. It's in early growth, early growth phase.
Understood. So margins should remain around this range, for till we are in the growth stage, that is how we should think of?
Yeah, yeah, yeah. I mean, margins should remain, I mean, over time, I'm not giving a timeframe, but over time, margins, we would like to see improve also.
Okay.
See the improvement already from 4% to 6% to 8%. We definitely expect, definitely understand that as the operating leverage there also kicks in. You know, just like in Map, we already have the operating leverage. But in IoT, we still do not have that level, where the operating leverage will kick in to provide a nice, very good arrangement. That's the best that we can say at this time.
That is what my question was, that is there a scale where that kicks in, that operating leverage kicks in, you think?
We couldn't hear the last one.
I don't know if we, if I just trying to tell you what. Let me try to explain. You know, the before Gtropy came on board, they were at INR 8 crore of revenue. Last year, it was something of the order of INR 55 crore. And this time already you are seeing the IoT-led business for half year is, INR 45 crore-INR 46 crore. Okay?
Yes, yes. So we totally appreciate, totally appreciate the execution here. Now, on the Map-led business, if you look at Map-led business growth rates, that has been hovering around mid-teens for now, on a YoY basis, how should we think of that? You know, I mean, the business except and excluding the IoT business, that business growth has been around mid-teens. So this is, this is how we should think of the growth for next two, three years, or if you can shed some light around this.
No, no, I, I wouldn't think of this as the, as the terminal growth stage at all, for the next, few years. I mean, it's going to be more than that. And so that's the mix. Over four to five years, we've tried to give a picture, you know, what, what it will become. I think we talked about in auto, we see a 4x, in corporate we see a 5x, in government we see a 6x. From a lower base, government will be less than 20%. You know, in IoT we see a 10x. So I think consolidated is how over the next four to five years, 35%-40% different contributions from these.
You know, to be honest, there are, there are use cases that we have or technologies that we have, whose market isn't necessarily there even yet. So over the next two, three years, things might change also in a good way. So, you know, this is... We are in this for not just quarter by quarter. We are doing the quarter execution, but we really think that in the next year, two years, five years, there's lots more to be done and business to be generated.
Understood. And, lastly, on this, cash flow that you discussed, there is a INR 20 crore provision you have taken on inventories, and around INR 10 crore for, for receivables. Any, any-
Can you hear please?
Can you hear me?
Yeah, now it's better.
Yeah. So I'm saying, INR 10 crore, close to INR 9 crore provision you've taken on receivables and INR 21 crore, you've taken a provision on inventory. If you can clarify that, if there's something we should, you know-
No, no. What you, what you think provision of inventory, what did you say?
Provision for inventory obsolescence, that's reflected in your cash flow, around INR 21 crore.
No, no, I don't know. I'll get back to you. Let me examine it.
Sure, sure. No, no, no issues. All right. All right.
Please send a mail. I'll look into it, but-
Sure.
Something we can-
I'll do that. Thanks. Thanks. That's it.
Okay.
Thanks.
Let the next question come. If I get the answer now, I'll give.
The next question is from the line of Nitin Sharma from MC Pro Research. Please go ahead.
Thanks. All my other questions are already answered. I have a bookkeeping one. So your technical service outsource expenses came down sharply this quarter. How should we look it as a percentage of revenue? Some color would be helpful. Is 4%, 5% of the revenue, and when-
Sorry, really, we are not able to hear. Maybe it's our end, but I request you if you can speak louder, so-
Yeah. Is it better? Hello.
Yeah, this is better.
Yeah. So, I have a bookkeeping question. Your technical service outsource expenses have come down sharply in this quarter. How should we look at it as a percentage of revenue on annual basis? Some color would be helpful. Thank you.
Now, technical services outsourcing itself means that something that is getting done from outside, correct?
Right. Yes.
Depending upon what revenue project work we are doing, accordingly, that technical services outsourcing happens. In this quarter, that kind of revenue might have been lower.
Also, what kind of product investments we do? Because it's a combination of product investment, you know, customer project, projects or customer delivery execution.
Okay.
This varies.
So this will vary. I mean, it will depend upon those, if it has come down this quarter, who knows, it might come down more or it might go up next quarter. These are not predictable. They are a function of what work we are doing. Either we do in-house, if we can't, if we don't have enough resources in-house, we outsource it.
Understood. Thank you.
In the same way, let me explain that inventory. Somebody was talking about INR 21 crore. It's INR 2.1 crore, not INR 21 crore. The provision for inventory.
Mr. Sharma, do you have any more questions?
No. Thank you.
Thank you so much.
Thank you.
Ladies and gentlemen, due to the time constraints, that was the last question. I now hand the conference over to the management for closing comments.
No, just wanted to say thank you to everybody for taking the time. I think we continue to execute, and we are excited about the future. So, look forward to talking to you again soon.
Thank you, everybody.
Thank you so much. On behalf of Anand Rathi Share and Stock Brokers, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.