Q2 22/23

Oct 28, 2022

Good morning, ladies and gentlemen. Welcome to the C.E. Info Systems Limited, MapmyIndia Q2 FY23 Results Conference Call hosted by Anand Rathi Shares and Stock Brokers. As a reminder, all participant lines will be in listen only mode. There will be an opportunity to ask questions after the presentation concludes. If you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that conference is being recorded. I now hand the conference over to Mr. Shobit Singhal from Anand Rathi Shares and Stock Brokers. Thank you, and over to you, sir. Thank you, Lisa. Good morning, everyone. On behalf of Anand Rathi, we welcome you all to Q2 FY23 conference call of C.E. 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. I will now hand over the call to Mr. Rakesh Verma for his opening remarks, after which he will take the floor for Q&A session. Thank you, and over to you, sir. Thank you, Shobit, and thanks to Anand Rathi Group for leading this analyst call. Welcome all of you who are participating in this call, and good morning. This is Rakesh Verma. I will give you some opening remarks with some basic things for everyone to understand what the company has been doing and what the company is doing and what the company is generally planning to do going forward. I need to first definitely let you know while you might be having the investor presentation in your hand, or you might have seen it, or some of you may not have seen it. I would like to read out a few opening statements. In the Q2 fiscal year 2023, MapmyIndia delivered a good performance with quarterly revenue up 35% year-on-year to an all-time high of INR 76 crores. H1 fiscal year 2023 revenue was up 31% to INR 141 crores. EBITDA was up 32% year-on-year to INR 61 crores. EBITDA margin was at 43%. PAT went up 8% year-on-year to INR 50 crores, and PAT margin at 32%. While we achieve our EBITDA expectations and the way we are operating this business, I would like to also comment on some of the things that we have recently done and what would be its benefit going forward. We really made three sets of organic investments in Q2 FY23 or let's say in the half year that will help accelerate the company's growth in revenue and earnings in the future. Please note my statement, earnings in the future. These three investments are set of organic growth, organic investments, with an eye towards the future, balancing both short and long-term goals on the growth and earnings, with the ultimate objective of further accelerating the company's future growth in revenues and earnings. First, in growing the scale of our recently acquired IoT-led business, Gtropy. I would like to address this first because C.E. Info Systems owns 76% plus of this IoT company. Focus has been on a very large multi-billion dollar addressable market of 20 plus crores existing vehicles on road in India, which can benefit from Gtropy and MapmyIndia's combined IoT-led goods and logistics and people mobility SaaS. This has been one. To further elaborate on this Gtropy, I would like to share with you that when we make the investments, acquisitions for our future, both near term and long term, we keep an eye on how to acquire more and more customers in the B2B and B2C business without sacrificing our general financial discipline. We have shared one slide in our investor presentation, which shows very clearly that while in the consolidated business of the company, which includes Gtropy, we have achieved EBITDA margin of 42.8% during the half year, FY 2023 on a revenue from operations of INR 141 crores. If you see our consolidated business without Gtropy, the margin is 50% on a revenue from operation of INR 124 crores. Also a gross margin of 37% without the Gtropy acquisition, as against 32% with the Gtropy. First, let me share with you that Gtropy is nothing but an IoT business. MapmyIndia has been in IoT business for a while, for many years. In order to accelerate the growth of IoT business because of the huge address, multi-billion dollar addressable market in India, we felt the need that a specific bandwidth for the IoT businesses created within MapmyIndia. We had a choice of either hiring our own people internally or bringing in company like Gtropy. We evaluated that, and we felt that acceleration can happen much better by acquiring Gtropy. What is the impact of that? The impact of that is, while MapmyIndia and the core business of IoT, which MapmyIndia was doing before, is created EBITDA of almost 50%, net effect of EBITDA came down to 43% with Gtropy being there. The fundamental thing here to understand is the core business of the company has been creating cash profitability in a big way. Either we could have continued with that, or we had to look at the future accelerated growth. For the future accelerated growth, this Gtropy has been acquired. The scale at which Gtropy ultimately will also give us the similar kind of EBITDA, which the core business was doing, will take some time. When I say some time, I mean the time of six months to two, three years. That is our objective. That's how the management of this company is working. So we are very excited about it, and we feel that we have done the right thing by bringing in Gtropy on board. The second thing also important to understand, it's not an inorganic acquisition. It is very much part of organic growth of the company. Everything that is reflected in the consolidated financial statement should be taken as part of the organic growth of the company only and not as an inorganic part. Secondly, when you see a dip in the market in the quarter for EBITDA, there have been a few other good reasons. While one side we are building up, scaling up our business, which reflects in our revenue growth, we also felt the need in our marketing activities to build awareness of MapmyIndia and Mappls brand is very critical for the business. We did accelerate our expenses on the marketing front in Q2. We also invested money in building up product portfolio like the RealView, which you are hearing, like Metaverse. These are all the expenses on the marketing side as well as on the product portfolio side, which will reap rewards in terms of new customer acquisition and new use cases adoption. Thirdly, the cutting-edge product and platform development, which will further expand use cases, addressable markets, growth engines, and moats for MapmyIndia Mappls. Finally, also what we have done is we have invested INR 10 crores for 36% stake in a company, Kogo, unified social travel commerce platform, which will open up new markets and new use cases for us, and we are very excited about this strategic investment in Kogo. With these words and opening statements, I would like to hand over to Mr. Rohan Verma to explain more in detail how the business has performed and how he looks at the future. Good morning, everybody. This is Mr. Rohan Verma, CEO and ED of MapmyIndia. Q2 was a pretty exciting quarter for us. I mean, in terms of lots of action on various fronts, and I was going to go through that. We ended H1 FY23 on a strong note. If you look at revenue growth it was on pace. H1 FY23 versus H1 FY22. As we have always said, MapmyIndia is an annual business. Let us have a year-to-date, you will understand us better, given that we are in the SaaS space, where it is all about licensing or annual resumption or API transactions, et cetera. A&M revenue went up 45%, automotive and mobility tech, and C&E, which is consumer tech and enterprise digital transformation, was up 29% on the maps side. On the product side, Map Data was up 32%, and platform and IoT was up 49%. As Mr. Verma explained, our newly acquired Gtropy business, it grew fast in Q2, it actually doubled revenue versus Q1 FY23. As scale subsequent year high margin SaaS income of Gtropy will kick in because IoT tech differs. What happens is initial margin gets compressed because you are selling a device. But what happens is in subsequent years, it is high margin SaaS revenue. That, besides the fact it is acquiring customers which Gtropy is helping us to, or which Gtropy we are able to acquire customers for the particular use case of logistic SaaS or mobility SaaS, we can upsell our entire range of products to such organizations like, as I have quoted, the cement companies, dairy companies, and other organizations that Gtropy is bringing into MapmyIndia's fold. Then on the marketing side, we've calibrated our marketing expenses so that we can. In this quarter, we calibrated it towards increasing the awareness of our MapmyIndia's Mappls brands and range of products, whether it's for our maps, whether it's for our different APIs, our drone-based solutions, our IoT solutions. The idea is to create more awareness amongst, and adoption amongst customers for different verticals and different use cases. That was an important activity that we undertook in this quarter. The good thing is our Swadeshi Mappls app and platform, meaning not just B2B and B2B2C, where we are very strong and intend to be very focused and strengthen ourselves even more on, but even the B2C side, our Swadeshi Mappls app that we have is making further inroads, and that's in conjunction with strong government-led partnerships, and I'll talk about that. This is an interesting point where very organically India is on an Atmanirbhar journey and inflection point, so it's working in our favor. As Mr. Verma said on the product and platform side, we are investing in building our RealView 360 degree and Metaverse 3D maps. Let me explain what this is and why it's important, and why it's very different from all the typical Metaverse that people are understanding. This is creating the next generation of maps, which is not just 2D, but 360 degree and 3D. That opens up a whole new range of use cases. Of course, it makes 3D delivery to the doorstep on e-commerce delivery to the doorstep, meaning even in 3D better. Or it gives enterprises wanting to site selection of where they should open up retail outlets by giving them the RealView of that area, so 360 degree area view better. Or if you look at the now back to I think real estate market where 360 degree and 3D of that area gives people better decision-making. Or the government side for infrastructure planning or smart city, or just generally for consumer mapping and navigation, the next level experience of AR or VR based on real world. That's what is opening up for us across use cases. Again, we have many. So that's what's exciting. But also we've invested in our developer APIs, our NCASE suite, our digital transformation platform, and geo-fencing Mappls app. Now what Kogo is allowing us to do is adding on these set of components of gamification, social, meaning social or community, travel-related content, planning itineraries, and commerce, so you can book travel-related itineraries or products or services into our maps and navigation. Now this is aligned quite nicely with what our automotive OEM customers are looking for, the next generation of connected navigation services or connected travel or location-based services. So this strengthens our use cases and additional offerings to OEMs and keeps differentiating us from whatever else options or substitutes or competitors that could possibly be there. Besides, of course, further opening up B2C opportunities for our company and Kogo combined in the future. So with that, I'll point to other things. Financials, Mr. Verma has kind of talked about the headline numbers, revenue, and EBITDA. A note on PAT, we had lower other income in this quarter, and effective tax rate was higher, so that affected PAT margins and PAT growth also year-on-year. Then I think the next point I wanted to make was on the consolidated revenue by markets and product line. As on A&M or C&E, as we've said before, we have a very strong open order book. We started the year with INR 600 crores, INR 699 crores of open order book. We are working through that order book and hence revenue as an outcome of that besides new sales and new order wins which will impact the future revenue. Whether it's the automotive companies which are doing more sales than expected, which will continue to do more sales in the rest of the year, our revenue has grown well. Q2 year-on-year is not a good comparable. In general, year-to-date is a good comparable for us usually as a business, but specifically for automotive, previous year Q1, means FY 2022 Q1, because of lockdown there was a spillover effect on Q2 and hence doing the Q2 comparison is probably not useful for A&M. On the other side, our IoT sales to vehicles and fleet owners or fleet operators that increased on the back of as I said on the bandwidth, orders, expanded distribution and that will continue to scale including enterprise sales leads. On the C&E side, which has grown 49%, we are seeing broad-based growth across our consumer tech companies, traditional enterprises, even the public sector and government, which are all consuming more and more Map Data, APIs. Our digital transformation platform is, which is unique in the sense that it brings the power of location and geospatial to it and of course now IoT solutions as well. Map Data revenue and platform and IoT revenue are scaling up quickly. I'll end with just two more things. One is that we've had a lot of customer wins across A&M and C&E on automotive OEMs. We've had a new large four-wheeler EV OEMs line up and you'll see the effect of that in the years to come. A bunch of market-leading vehicles like Gloster and all the cars of MG have gone live. Many businesses, cement companies, dairy companies, FinTech companies, e-com, FMCG, health tech, even voice assistant, real estate, digital companies, many new customers acquisitions. On the government side, road construction equipment for state road transport departments, IoT tracking of that, civil supplies distribution, IoT tracking for map-based platforms for tourism, smart city and drone solutions for energy company. A lot of good customer wins and a lot of strategic partnerships with government which we've highlighted in the investor presentation and in our discussion today here. Thank you, Rohan. I think I'll hand it back to Sohit. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone wishing to ask a question, please press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Operators, add a question to your handset while asking your question. Ladies and gentlemen, we will wait for a moment for the question queue to settle. The first question is on the line of Shubham Chandu from Anand Rathi Shares and Stock Brokers. Please go ahead. Thank you. Hello, sir. I have two questions. On the C&E side, which is our fastest growing business segment, given the base. In the H1 FY23, we have grown at just 39% against 40% historically. So what are the issues that you are facing here? The second question on the margin side, given you have started investing in brand building and other two areas, so how should we look at the margins going forward? Earlier you have guided the range of around 35%-45%. So is there any new guidance which you want to highlight? First, let me help answer your second question. The 35%-45%, I think we have achieved 40% in the half year. Again, I will say, always look at us as a year to date. In the H1 this year, I think we have achieved 43%. So that's pretty much not only within the range of 35%-45%, it is closer to 45% only. I think probably you want to get and nail us down if we can give a lower band rather than a 10% band. If that's in your mind, let me help you in a very simple way. This percentage and the revenue also have to be linked. When we try to accelerate the top line, we may end up spending in two ways. One, either see the IoT business as one part. The second part is also spending certain money in the product development, in the marketing expenses. Now, we calibrate this to ensure that if the top line message has grown 40% this time in a half year. Keeping that in mind, we also plan our expenses. Now, 35%-45% I know is a wide range. If you can think of something, if you want me to nail it down I'll say that we definitely do not want to be below 40% in the EBITDA side. That's not something which we are striving this year. We definitely are striving in that 40%-35% area. On the question on C&E, our revenue every quarter is a function of our order book. So revenue, as we said, in C&E especially, can be a bit lumpy. So you have to look at what the order book that we have and when the go-lives of the solutions happen, and when the revenue starts kicking in. So nothing to really worry about on C&E. It is just a function of what the order book was and is. In fact, it is very heartening to see that we are continuously acquiring more and more customers, which are all blue-chip, all the good names across categories, consumer tech or traditional enterprises across verticals or the public sector. So I would just keep watching out on how the overall year stacks up for C&E. It is in a good shape. Okay, sir. Thank you, sir. I will keep on C&E. Hi, Jeev. The next question is on the line of Samit Dasani from ICICI Prudential AMC. Please go ahead. Hi, thanks for the opportunity. I just want to understand, the Gtropy revenues is included in A&M or is it in C&E? It is in both. Actually, it depends on the particular use case. Is it an enterprise digital transformation or is it in a bigger mobility use case? You start seeing the effect of that in both. If I want to see H1 FY 2023 A&M without Gtropy, what will the number be? Sorry. A&M revenue for the quarter, H1 FY 2023, what would be the revenue excluding Gtropy there? A specific number we can either get back or we do not have to get into the specific number, at least on this call. Given that automotive sales have grown, A&M in general also has grown even ex Gtropy. Right. Exactly. That was my question. We are majorly on CE side, right? Consumer and commercial. If you look at passenger vehicle sales, H1 FY 2023 versus FY 2022 has been improved. I want to understand what was our growth on H2 Gtropy because Yeah, it would be similar. I mean, it would be similar. We would be more or less tracking this market growth only, right? Yeah, that's right. Also, the new OEM added, how big is this OEM that you added? Can you give some colors? Yeah. We don't want to be specific till the time they don't go live with the solution. It's about two cars go live in 3-6 months, but definitely it's in the top four OEMs. Okay. Also to understand the C&E market, what is the longer-term growth that we should understand and how should we interpret the growth of these business, the C&E business? I wish I could give you an exact answer, but what we always think of is how our total business grows. Really doesn't matter so much to us between A&M and C&E in general, excluding the devices part of it. So if overall growth happens in a healthy manner within the range as we talk about the profitability, the growth is happening the way it has happened, 40%, like that, probably we should not get too much mixed up between this C&E and A&M. Currently also, it is maintained at almost 50/50% if you see the numbers. Almost. Yeah. Each of them have their growth vectors, as we've said before. Automotive is tracking the overall new vehicle sales and the adoption of N-CASE within that. Those are both on growth vectors. Then mobility and some part of C&E, which is driven by the logistics-based digital transformation. It's working with existing base of vehicles and logistics optimization market, which is again, quite large. Consumer tech is basically more and more apps which are consuming APIs or powers and enterprises which are generally digitally transforming. Each of these are- Digital transformation government. Yeah, enterprise digital transformation includes the government digitalization that is happening in a big way this decade, what Honorable Prime Minister also talks about. You've seen a lot of wins in the last year based on our platform on the central government, state government, and local government or smart city level as well. All of these are slightly different growth vectors, and each of them has a lot of promise. It's about how fast and how much we want to and we can invest in existing while maintaining some fiscal discipline, which is that balance that we look to strike. Just to understand C&E, how much percentage of your- How big is the portion that is API dependent and how much is your other revenue? Because API is basically just once you order or per use. This is I would say roughly half and half. Just to give you some frame reference. If I look at overall growth, right, excluding Gtropy, I think last year was around 30%. Now it has been a little bit more, but if you normalize to 25% growth. If you look at Gtropy's business as a standalone company, the growth which we've seen doubled in Q2 versus Q1, a lot of it is also attributed to MapmyIndia's existing IoT business that we are combining with them. If you look at MapmyIndia's organic business, it continues to grow. Adding on Gtropy helps us create a focus and bandwidth within the company or the group company so that different business leaders and different organizations can focus on achieving on their addressable market. I think overall our story is going well, but Gtropy will further help accelerate that. Okay. What is the margin profile that is sustainable after maybe two years, that is when SaaS revenues or margin will come back? What is the kind of profile of this business and what is the margin that we should expect from this business? See, there are two components to the business. One is the device-led sales, and the other is the pure SaaS sales. The third is the device-led SaaS. Device-led SaaS. The revenue mix will evolve for the company. Most we are on workplace SaaS and no device cause, of course, it is very high margin, like our core existing business. Device-led SaaS is important because devices let you put in the goals. Now when you are part of a logistics company's operation, let me just say like a cement company, where they're every day tracking their shipments using your device and the staff associated with it. When you become a core part of their operations, the stickiness is very high. That's why you're seeing cement companies, dairy companies, logistics organizations continuously use us. The revenue mix over the course of next 2, 3 years will determine a kind of a stable EBITDA level. That's what we are working with them. We are focusing our efforts on which market segments to focus on. Specific you want to talk about or you want to wait? I think if you are asking more on this topic of the IoT and related, I had said in the beginning itself that the core business of MapmyIndia base products and platform, also along with that, there was an IoT also that was a product and platform base list of devices. There was a certain level of growth happening in that, what has happened in the past. What we felt was that device-led, if we create the business, the growth will accelerate at a much faster pace. The moment we have entered with the devices with a customer, particularly B2B customer, the SaaS automatically kicks in. It is just a matter of some time. It may be six months later, 12 months later, and that SaaS gives us back the same kind of accessibility which our existing business was doing. That is the way you should look at it. In any case, without that IoT thing, the growth has been 30% plus. Just to understand this business model. Once you started device led, say, per 100, what is the kind of SaaS revenue you expect every year? 20, 15, 30? I just want to understand more. If you spend in year one the investment in the devices is INR 100, the next year, what should be the SaaS revenue of this tracking device? Whether it be 10, 20, 50? It could be in the range of 45 to 60, could be 23. I am just giving you an idea. Right of the subsequent SaaS yearly revenue from this. Okay. On this device, we are making less profit, right? Then SaaS will be a better margin. is what's stressing the margin as priced in the beginning. Right. No, thanks. Answers are all there. Thank you. Thank you. The next question is from the line of Vimal Gorheil from Alchemy Travel Management Private Limited. Please go ahead. Yeah, thank you for the opportunity, sir. I hope I'm audible. Yes. Yeah. Great. Sir, just one clarification. This quarter or rather the first half of the year, I think Gtropy has done the revenue of how much? Will it be closer to INR 6 crores, if I'm not wrong? Around INR 24 crores is the first half. Sorry, INR 24 crores. Sorry. Yeah. And this number in FY 2021 was around INR 8 crores, if I am not wrong. Sorry. Gtropy's own business, which is INR 24 crores is the entire IoT business you are referring to, right? We are talking about standalone Gtropy business, the likeness revenue which you reported for FY 2021, INR 8 crores. How much of that is in H1 FY 2023? Actually, just to give you more depth into the accounting side, out of that 24, 25 crores with Gtropy shows as a revenue, around 8 crores went to bill MapmyIndia because the business came from MapmyIndia to Gtropy for execution. If you look at it that way, then MapmyIndia might have billed to the customers for 10 crores with its own margin. The net for Gtropy becomes then 16 without MapmyIndia business. That is the another way to look at it. In the first half In the first half 8 for them for the full year. Last year, without MapmyIndia. Got it. We have already doubled our revenues with Gtropy the first time itself. The benefit to Gtropy has been with MapmyIndia, that they have the muscle to now accelerate their own growth. Plus for MapmyIndia, the benefit, even if you look at MapmyIndia's first half revenue, IoT revenue in the first half it was relatively lower. That also quickly important. Overall, the IoT revenue is accelerated quite quickly in that first six months. Got it. Sir, and just on Gtropy, in your opening remarks, you commented that Gtropy is expected to improve EBITDA. I am not sure if you meant that it will reach a PATCO G level EBITDA. You said that it will take around six months to two years. That is a pretty wide band again, to understand. Specifically when you say six months to two years, are you talking of Gtropy coming to company level EBITDA, or it has a bit of hardware component, it will be at a slightly lower rate, the profitability going forward structurally? Structurally, it is bound to have a little lower level of profitability than the other one. But then when you look, whatever that level of profitability is, will add on to the overall profitability of the company in absolute terms. If you look at the PAT as an absolute number. Margin, if you are thinking of as a PAT, as a percentage margin of the revenue. Yes. Or EBIT, not PAT so much, EBITDA, let me tell you, as a margin, we have seen the effect this quarter also, and this half year also. So what looks like this quarter or this half year particularly, is something which is not out of line for the next 2 years. It will be a journey. Definitely. What is happening is, let's say you sell the device today and the SaaS kicks in for that 6 months later. SaaS revenue now starts giving you a huge EBITDA because the operating leverage kicked in for them. But then at 6 months again, they will sell more devices. Whose EBITDA will happen again, SaaS revenue will happen again 6 months later. So that is how you keep building the SaaS revenue with some lag. Got it, sir. Sir, now my question is on your other expenses line item. Basically, thank you so much for providing the breakup this time around. I hope this continues. Now, what I noticed is that sales and promotion expenses have risen even on a constant currency basis. Now, was this on expected lines for the company? That is point number 1. And if your spending intensity has increased substantially, would your own growth estimates then imply that intensity would increase? Or is it that your growth estimates remain the same, it is just that your spending intensity or your sales and promotion intensity will have to be more because of competition increasing? Or is it that the business now requires slightly more to also grow that much? So how would you look at that? First of all, let me address it saying that whatever the budget we prepare for the year, and then we move it down to quarter by quarter internal management control, we stay within that. How do we stay within that? For the quarter, internally, beginning of the quarter, we try to see what would be the revenue that quarter and what would be the EBITDA, and then look at how much we should spend also on the marketing expenses. The marketing expenses can be unlimited also. We can spend INR 100 crores and try to get lot of new businesses. But whether it is wise or not in the current scenario of a listed company, we also are a bit concerned about it. And hence we say that, okay, we have talked about 35%-45% EBITDA. Can we stay within that range? Or whether 40% plus, can we stay within this range? How much money is available for that? That is what Rohan was talking about, calibrating our marketing expense. We use these opportunities when we calibrate to increase at least, to basically create awareness and future demand for a new set of use cases. The revenue impact of that may come immediately, that is fine, or it may create a multi-billion growth engine for the future. I would just say that, look, we have a pretty optimistic and belief that there is a very large set of addressable markets for MapmyIndia ahead of us in the medium and long term. If we do the judicious investment at the right time, then we will be well-positioned to take care of that. I mean, to make sure that we can capture that when the market is in front of us. We are careful with it. We do different types of investment in marketing for different objectives. Some could be brand-led, some could be promotion of specific set of products or new set of use cases that we are in. So, sir- Thank you very much, Mr. Koel. Sir, maybe let other analysts also ask questions, please. Give them some opportunity to ask their turn. Right. Thank you so much. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in this conference, please note that questions are limited to two per participant only. The next question is from the line of Anmol Gujral from DAM Capital. Please go ahead. Hi, sir. Good morning. Thanks for the opportunity. Actually, I had a couple of questions. Firstly, wanted to ask that we have been highlighting various initiatives with the government. So what kind of revenue can be expected out of this and can any large contracts also be expected from the government initiatives that we are taking? See, there are multiple reasons why we partner with the government. The end objective is to be part of operation-scale platforms. The government has big plans for digital transformation and geospatial, and even IoT maps, the areas that we are in could play a critical role. These are the things. Each partnership is slightly different also. Like ULIP, which is the Unified Logistics Interface Platform, government announced it with National Logistics Policy. Honorable Prime Minister even visited our stall to see what all we are doing and then tweeted about it. This is going to be UPI for logistics. Meaning every logistics transaction in the country will eventually get digitized and put on ULIP, and we are the mapping solution around that. It becomes an interesting thing that as it scales, this is a little bit analogy to ONDC, which is slightly different area, and you are seeing ONDC take shape in the country as the next part of India Stack. ULIP is also going to take shape as next part of India Stack. That will have an impact in future. The other part, what we have done with Uttar Pradesh police, this really is to address 26 crore citizens or commuters within Uttar Pradesh. 20% of India's population are being told and promoted about Mappls app and Mappls platform as being the de facto official for issue maps and navigation app. In which the UP Police is also, through us, giving the traffic advisories and road safety information and taking the reverse feedback and fixing. There will be a lot of allied revenue that will come as we start getting embedded in smart cities and traffic and police and emergency response, which will come as a result of that. The last is the state level, what we are doing with Delhi government for EV charge station site selection using our geospatial analytics platform. Just recently, in fact, Delhi government invited many PSUs who all want to get into, all the oil and gas companies, PSUs want to get into EV. A lot of the distribution companies, the infra companies that are around EV, they had invited them all and got MapmyIndia to present what work we are doing and ask them to collaborate with us, which will generate revenue for us. These are different areas, different geographies and different government levels we are participating in. Parallely, we are winning already contracts with the government. With that we are putting our customer wins, like a state road transport corporation or civil supplies or state roadways department or tourism department of a state or state cities. That continues to be the near-term revenue and the other partnerships are solving different needs for the company for future. Thanks, Rohan. Just to dwell a little more into this, sir. You were highlighting about the Unified Logistics Interface Platform program, and it is a pretty large program from the government. What kind of opportunity is this particularly from your point of view? We do not want to comment on the specific revenue opportunity till the time Unified Logistics Interface Platform. It is still in beta phase. The government will come out with its kind of specific policies and transactions and revenue models around Unified Logistics Interface Platform. I think it is a bit premature for us to talk about revenue specifically that will come in to us. But it is good that we are deeply embedded in the platform under the map API. Sure. Mr. Das, you can firstly return to the question here because it is waiting for the adjourn. Sure. Thank you. Next question is in the line of Moiz Chandani from Centrum Broking. Please go ahead. Thank you for taking my question. My first question was on the C&E segment. Are you seeing any sort of slowdown from your FinTech and e-commerce clients, given that there is a feeling slowdown in those segments? Are you seeing any slowdown there? No, not at all. We are riding the consumption wave. More and more consumption is happening. More and more e-commerce transactions, FinTech transactions are happening in the country. So we are riding the consumption wave. That is, of course, secularly growing. If you are relating to slowdown in our growth in the C&E compared to some previous numbers, I don't know if you are relating something like that. Remember always, there are some lumpy revenue booking that happens in C&E. Okay. Sure. Got it. Thank you for that. Also, I wanted to understand, are you seeing greater traction in the EV two-wheeler space? Because that's a space that's growing pretty fast. So if you find a greater traction there? Yeah. Hugely. I think pretty much almost all EV OEMs. All, I would not make that statement because not everybody has come out. The majority of EV OEMs are two-wheelers are looking at this N-CASE. They are already there in a few and more have signed up, so they will go live soon. Yeah, this is critically a strong space for us. Got it. Thank you. Thank you. The next question is in the line of Nitin Sharma from MC Pro Research. Please go ahead. Hi. Thanks for taking my question. I would like to understand more about the 3D/360-degree maps, digitally, whether that you offer to customer differ pricing-wise, some understanding on the overall potential of it. Sure. As we explained before, our Map Data is overall. What is this? It is a 4D digital map twin of the real world, meaning we are representing the physical real world digitally to our Map Data. It enables all sorts of use cases, whether for e-commerce or FinTech or government planning or navigation or tracking, et cetera. Now, with 360-degree panoramic views as well as the 3D Metaverse maps, what we are able to do is allow, for example, let us take real estate. Now, anybody wanting to do a real estate purchase would want to see how the view will look like from the flat on a particular floor that they are going to buy. In that perspective, all the 3D of the neighboring areas would be very relevant to find the 3D of the tower and society, et cetera, or generally the 360-degree view of how the area as they are driving around looks like will help them. So that is one use case. Plus, I can say many use cases I talked about it in the beginning. The revenue model around these is similar to our maps and our APIs. So it is part of our Maps as a Service offering. It is just a more advanced solution that enables us to continue to offer best-in-class, first-in-class unique solutions that keep us there. So similar kind of revenue model for us going forward of these 3D and 360 degrees, except that we are at the cutting edge, this disruptive level of innovation here. Okay. Thank you. Next question is in the line of Shristi Jain from Kotak Investments. Please go ahead. Hi. Thank you for the opportunity. Can you tell me the new order bookings for Resmart in 2022/2023 or the overall order book as on H1 FY23? Actually, we talk about annual new order bookings and open order book. This is a year-end number that we talk about because order bookings are throughout the years and can get bunched up here or there. What I can tell you at least qualitatively is that many customer wins we have had with our new orders that we have booked across A&M and C&E, and we kind of talked about it in our investor deck, whether on the large four-wheeler EV OEM and that. These are just Q2 related. Q1 we have anyways talked about previously. Cement companies, dairy companies, FinTech. I think I have referred to it earlier in the call as well. So lots of order wins and the pipeline is also looking strong. So I would just say wait for the year-end numbers around this. Okay. Thanks so much. Thank you. We will move to the next question. It is in the line of Sameer Bisari from ICICI Prudential AMC. Please go ahead. Just one question. So without Gtropy, you have to show us different numbers. So here the margin has moved to 60% now, right? Is this kind of sustainable between Because we will have to do some investment also. So what should we look at without Gtropy into next phase? Actually, we should all look at group level. Okay. This was only shown for you to make sure that people understand that the other side has not fallen apart or anything like that. Just to clarify that, we made this slide. Okay. Also one clarification on service portion of the Gtropy. Here we told that service portion, on 100 device sold, you would have 50-70 service portion. Here, the service cost should be very low because the masks are already there. You have already done that. So the service cost of that service certainly would be very less. Yeah. That's true. That's the SaaS part of it. That could be a hugely contribution profit. Along with that, you also keep selling the devices. New devices. New devices to new customers or whoever. It works out a overall benefit scenario. Right. Understood. Thanks, Dad. Thanks for the information. Thank you. Thank you. The next question is from the line of Sweta from ANS Wealth. Please go ahead. Hi, sir. Thank you for giving this opportunity. I just wanted to understand, in terms of revenue, you think in next 3, 4 years, can we double the revenue from current run rate? Can we do around INR 500 crore, INR 550 crore of revenue? Whenever we look at that, first, can we do that in 3 years, 3 to 5 years, 6 years? What kind of margins would we be able to maintain that same margin to a INR 500 crore, INR 600 crore kind of revenue? I want to understand that on a very front basis. 3, 4 years we are talking about becomes a little longer term because we are a tech company. However, to answer your question, since we are fundamentally a product and a platform company. Same case of IoT, maybe it is a device-led, but in other cases, there could be a digital transformation happening in the country. The other one, in the automotive, there is something else, OEM with its own space. The way we have structured our business and the fiscal discipline is operate within a certain metric. The metric we have shared. Whether it is INR 500 crore revenue, INR 400 crore revenue, INR 600 crore revenue, certainly our objective would be to strive for what metric we have set for ourselves. Open order book with and the progression of order bookings and open order book in the last few years will also give you some sense of what base revenue anyways we expect for the future years. Then add on to that new order bookings, which will generate revenue. Further, I will just add, we started with INR 150 crores for fiscal year 2021, and we are reaching almost doubling that this financial year. Right. All this can give you some indicator. Only future will tell us what happens, but at least the past indicator is there, how we maintain the fiscal discipline. Mm. Okay. Thank you, sir. Thank you. Next question is on the line of Sasha Sanwal from Raymond James Capital. Please go ahead. Yes, good morning. This is Sasha here. Firstly, just to go back to Gtropy again, could we just get more clarity on, one, what is the margin on the IoT? Are you actually getting it to a zero margin just to break even with the customer? Then, just any kind of color you can give us on, if you think about the Gtropy business, there's just a feeding of GPS locations, and then there's analytics that you can have overrun above that. I think like supply chain, logistics, route management. If you could just give us a sense of how you see that business shaking out and what your customer conversations are, if you're having right now. I didn't hear clearly the second part of your question. Just if you don't mind, if you can repeat that. Yeah. Just if you could give us more color on just the conversations you're having today, different use cases all the way from the simple, because you just get chained to your asset or your vehicle is at one location, all the way to analytics where you help supply chain logistics, trying to target and things like that. What sorts of conversations are you having? That's right. I can just use the example, let's say, of a certain company which wants to track its shipments and wants to make sure that the shipments are on time, and then they want to optimize the route that the shipment is taking so that it can. Basically, at the end of the day, everybody's trying to minimize their logistics cost and maximize their SLA, meaning on time arrival and the service ability that they can do, and that's the center of enabling that. So it's a very exciting time to be talking to different verticals of customers and private and public sector who are all trying to. I think this is good and that's the set of conversations we are having. In the first set, I think we've given some colors already too on the other questions, so I'll skip that for now. Okay. Then just the second question, just to get a better sense maybe of your strategic investments and how you are thinking about the future. For example, in the last quarter, there was some talk about international expansion. That did not come up in this quarter. This quarter, on the detail side, the big gorilla in the room announced his reentry into city finishes, and we Sir, I am so sorry. Your voice is coming quite disturbed. So maybe there is a problem with the mobile phone. Are you using a mobile phone? Yes, I am. Is that better? Sasha, you are okay if I mute you, so Okay. Yeah. Is this Oh. Yes, this is better. Sorry about that. Please proceed. Okay, cool. Yeah, I just and last quarter, international expansion was mentioned. You have made more progress in the last two quarters with the consumer-facing app, versus the B2B or B2C before. I would just love to get a sense of how you figured out in terms of your plans and investments. Yes. How are you strategically thinking Yeah about these different pools? Yeah. I mean, see, even during the IPO process and outside also, we've talked about that, look, this international and consumer are optionality factors that we have beyond our core, very strong, growing B2B, B2B2C business in India. The third we talked about was IoT, if you recall. So these are very good interesting areas. International anyways is a journey, which is a function of we've set up office in Korea, we have an API presence, we have set up presence in the U.S. or we have a U.S. focus. Middle East, we were at Gitex. So these will unfold with results in the next one to three years. We never said count on that in the beginning. So we want to do it in the right way, in a calibrated manner. Similarly, on consumer also, we've always said that we want to do it at the right time and the right way. Just the interesting thing people might not have seen and should see is what CCI, our Competition Commission, has charged against Google for the Android pre-loading, et cetera. This came last week. It's something interesting that you should keep tracking what is happening for indigenous apps. Of course, MapmyIndia is the leading one in the mapping space. So the right time and the right way. But yeah, we are definitely keen on these in the next two, three years as additional growth engines for the company. Okay. Thank you. Thank you. The next question is from the line Amar Maurya from AlfAccurate PMS. Please go ahead. Amar Maurya, your line is in the talk mode. Please go ahead. So, sir, in terms of your existing order book, fixed price is largely for auto business? No. Volume business are fixed price. No, auto OEM business is mostly the volume-based business. Volume business. The fixed price normally comes in the C&E side. Yeah, in use case driven. Okay. When you say fixed price volume business is auto business, is it safe to assume 85%-90% business is largely an auto business in this volume business? No, not 80. Out of volume business, what is the volume business? One is the automotive OEM charges goes out. Volume business could be also API transactions. No, API transactions we book as and when we- I am talking about revenue. I am talking about the revenue side, the API transaction. Oh, you support. Yes. I think it was what Rishabh was talking about. Yes. That is also a volume business. On the order book side, I would say probably the large majority of volume-based is. Automotive. Yeah. Is it like 80%, 90% order book would be the automobile business? API would be very small portion into that? The component of open order book, which is volume-based, large majority of that- Is about 80/20. I am saying percentage-wise, is it 80%, 90% of the order book which we report, is it the automobile business order book? No. Our order book- Let's clarify. There's an annual order booking during the whole year, what new orders we keep winning. Then there's an open order at the beginning of the year, the orders that would get executed. Correct. I'm asking for the new order book. In the new order book, we give the split, right? Every year, we give the split between the volume business and the fixed price business. I'm asking in the volume business, when you say that majority is the automobile business, is it like 80% to 90% of that business is the automobile business? It's not 18, 19. No, the split between volume and fixed pricing is there. We have shared it in the presentation. Correct. Got it, sir. I am just asking about in terms of the fixed volume business, as you said that volume business is majority is the automobile business. The volume connection business. If I identify the majority business is the volume business in the new order book? Yeah. I mean, I am not giving a specific number, but the large majority of that is, yeah. Secondly, sir, as you said that normally, in terms of the execution pipeline, this automobile business is likely a four-year kind of a contract, and C&E is like a three-year kind of a contract in terms of the execution. I am just trying to understand, if you see your pipeline, are you on the track of that three, four years, in terms of the quarterly number or you are lagging behind? Because what I calculate, you said probably is that I think we are significantly lagging behind in the consumer business. I don't think we are lagging behind based on the profile of our order book. Because if I see your two revenue from the consumer electric business is around about, consumer business, consumer tech business is round about what? I think INR 70 crore business, right? If you just multiply by two, that is INR 70 crore business. I mean, INR 134, INR 135 crore business. But if I see the order backlog, and if I divide it by three, based on the new order billing, ideally, the run rate should be something around, even if I consider 70% of that, ideally the run rate should be something around INR 64 to INR 65 to INR 50 crore kind of a run rate quarterly basis. Do you feel that we are on track in terms of the consumer business? There are two things I will say. One is that you should do the analysis on an annual basis because it's like we have said, this is an annual business. The second is if you were doing INR 60 crore quarterly for C&E, then our numbers would have been much more in first half. I would just say that our revenue is a function of our order. Again, we have given overall number to you. Look at the overall number at a company level, and then at the end of the year, it's worth having this discussion that are we tracking or not tracking. In our assessment, we are tracking. Basically in terms of, let's say the annual growth Sorry to interrupt, Mr. Maurya, may I request that you return to the question, please? Ma'am, can I just finish this question? It is an extension of the first question only. Sure, sir. But the participant's waiting for the answer. Okay. Thank you. Next question is from the line of Anmol Garg from DAM Capital. Please go ahead. Hi, sir. Thanks for the opportunity again. Just had one question. Just wanted to get an outlook on the Gtropy business for rest of the year FY 2022 for H2 FY 2023. Can we expect a similar amount of growth that we have seen in this quarter to continue in the next two quarters as well? If that is the case, then still we can expect that the margins for consolidated entity will be above 40% for H2, given that relatively now that we are selling more devices, therefore the margins are lower in the Gtropy business. Your color on it would be nice. First question you asked, they delivered from last quarter to this quarter. We are only expecting them to keep increasing for the next two quarters also. Exact number is very difficult for me to predict, but the signs are all looking good. Second one related to the margin. Yes, for the INR 24 crores of business that went through Gtropy, let me again clarify, out of that, INR 8 crores were billed to MapmyIndia only for MapmyIndia's onward billing, which was less of devices, more of SaaS. Now the impact of the INR 24 crores overall on Gtropy led to Gtropy having an EBITDA close to zero. At least they are not that kind of an EBITDA negative. We think that they do better for the next two quarters and 2024 probably we should start giving some indication of what happens to their EBITDA. That's my simple answer. We want them to contribute in absolute terms to the profitability. That's very important to us. Also, of course, as a company, as a group, we have fiscal discipline kind of ingrained in our DNA. We look at both things and Sir, what I mean to ask is that if Gtropy grows faster than the consolidated business in H2 as in and the portion of Gtropy business continue to increase within our business. In that case, will we be able to maintain a certain type of margins for the next few quarters as well? That is something that I wanted to ask. Like I said, we are looking at maintaining a certain fiscal discipline and a certain range in mind. If I can just say for the lighter vein, if we find that our system is not maintainable within that range of what I said in the morning, 30%-45%, because Gtropy grows and wants to sell devices only we may block that device kind of a sale. Some of the things are internal management control is what we want to achieve. I think we are trying to give this clarity to all the analysts and shareholders that we always look at shareholders' interest. Sure, sir. Thanks. That's it from my end. The next question is from the line of Nikunj Mehta from Wealth Academy. Please go ahead. Good afternoon, sir. Just wanted to clarify something in terms of understanding. When we update our maps, we do it by means of feet on street, right? We have multiple ways. I think during the IPO process also we explained it. In fact, we use the network effect of data collection, let's say, from tracking devices, from API transactions. Besides the analytics and AI that we apply on these RealView 360 HD of what INR 400 crore-plus geotagged photos, panoramas, videos that we have. Besides our team that is there, which kind of falls under more fixed costs. So that is what has kind of differentiated or made MapmyIndia unique compared to the global peers who have struggled with cost structure. We are highly technology-oriented and cost-efficient. If I'm right, Google does it by means of satellite. Wouldn't that be a more cost-efficient manner? Is there a way to go about sending people when so much of infrastructure development is happening on the road and capturing everything by means of feet on street versus satellite? What is your thought, sir? Which is a better way to go about it in terms of cost as well as accuracy of maps? It is a combination of all of them. Yeah. Because the satellite gives you some advantages, certain no advantages. Like satellite will not tell you what is this house number, building name, and all that. A drone might give you a better panoramic view, which gives you another perspective. The feet on the street validates certain things and gives certain details which no other technology can provide. Feedback like the UP Police Rohan was talking about and many such cases where the real-time update of what's happening. The tracking devices, IoT, gives you traffic information, which helps us give the estimated travel time. It is a combination of all of them, and the best part is this is our area of excellence. Where we have been able, over a period of 25 years, we have mastered this art of what is the most optimal way of achieving accuracy and achieving the lowest cost. That is the beauty of how we are managing our Map Data products. That is very interesting and useful, sir. Thank you. My second question is, you have a lot of cash in the balance sheet now, and I understand we are increasing our marketing spend as well as looking at acquisition opportunities. I would like to get your thoughts on your dividend payout policy. How do you think you will be going about it for the next 2, 3 years? First, let me say that dividend payout policy we have spelt out in our policy statements already. The policy clearly says that the board of directors will make a decision on what kind of dividends to be paid out. Definitely, dividends will be paid out. That's not something we need to worry about. How much to be paid out, this time we believe that it's better that we do the entire annual exercise of the annual performance, and based on that, the board will take a call and make the dividend payment at one time, rather than also unnecessarily going through the compliance problem of declaring an interim dividend and again later finding it for the final dividend. We just want to make one single-time final dividend payment based on the annual results. Right. Thank you. The next question is from the line of Nitin Chawla from Cliffe. Please go ahead. Hi, sir. Congratulations on a set of good numbers. Sir, just wanted to ask one thing. When you are doing these acquisitions, I understand that you are looking at adjacent business and Kogo. Can you just throw some light as to what goes in your mind when you are evaluating a business? And can you throw some more light on how you will monetize Kogo? Because I just wanted to understand that it's a gaming company or what kind of business avenues can come from that business in future. What's going on our mind is clearly kind of whether acquisitions will help us generate more revenue or revenue-led acquisitions, what we call, that they will get us more customers or that they will enhance our product portfolio that we can upsell to our existing customers. So with Gtropy, that was exactly the idea, that they already had a set of customers. We can upsell, cross-sell to them our rest of solutions. They brought in this logistics SaaS, which products and IoT products that Flexi didn't have. So that combined is quite a formidable IoT and logistics SaaS and mobility SaaS pure-play business with the added advantage of the portfolio of customers. So really that was to help accelerate revenue and that's short-term revenue generation and long-term earnings generation. With Kogo, basically, you can think of it as an app actually, which allows you to plan, discover, share itineraries. As you travel, you can share where you went, so like an Instagram for travel. But also you can venture bookings of travel itineraries as well as travel-related goods and services. So as you set out, what are the things you need, experiences, et cetera, so travel commerce. What they have done is they have gamified this entire thing so that any activity you do through the Kogo app or platform, you earn coins, which you can spend to get discounts, so that you burn it through the network. So there is a strong revenue model built into Kogo, and we are monetizing it in two ways. One is through us continuing to sell this to our OEM customers as add-on solution. Then, of course, there's a consumer, direct-to-consumer monetization opportunity because if you buy the Kogo subscription, so actually it's a subscription business also. So if you buy a subscription, then you get three times the discount that you otherwise would have gotten. So there's a direct-to-customer monetization also, and then there'll be some enterprise opportunities also that will arise. So that's kind of what was going on in our mind with Kogo that showed up our automotive use offering and opened up this travel commerce and D2C kind of business for the future. Got it. Just one follow-up question. Everything will be on subscription base and not going down the advertising model, right? Even in Kogo. See, till now we have not been in the advertising business, but I don't want to preclude anything for the long-term future. What we are strong proponents of is user privacy. We don't believe in this kind of bad user targeting and mining, which Google does, which we are not a fan of, and we believe that is being cracked down upon. I don't want to preclude future revenue models, but we will do things in the right way so that people benefit and people get constant value from our products. Thank you. Ladies and gentlemen, this comes to the last question. I now hand the conference over to Mr. Shobhit Singhal for his closing comments. I would like to thank the management and participants, everyone on the call. Thank you. Thank you. Thank you all. Thank you. Ladies and gentlemen, on behalf of Anand Rathi Shares and Stock Brokers Limited, I thank you for this conference call. Thank you for joining us, and you may now disconnect your lines.