Digital mapping company MapmyIndia has reported a net profit after tax of Rs 33.1 crore for the quarter ended September 30, 2023 (Q2 FY24), up 30.31% from Rs 25.4 crores in Q2 FY23. On a sequential basis, profit was up 3.44% from Rs. 32 crores last quarter. Profitability for MapmyIndia has been increasing quarter on quarter for a while now, even as Total Income has grown to an all-time high of Rs. 99.1 crores, along with all-time highs in profit and EBITDA. The company reported an EBITDA margin of 44.5%.
Press Release | Presentation | Financials
New customer acquisition, improved margins
MapmyIndia’s Map-led vertical reported revenues of Rs 68.6 crores, up from Rs 57.5 crores for the same quarter last year, with EBITDA margins in the business increasing to 56.4%. MD Rakesh Verma said in a statement that the B2C app Mappls has been receiving significant traction, and now “has 11 Mn+ lifetime downloads, including 10 Mn+ on Android and 1 Mn+ on iOS.” Readers should note that metrics such as Daily Active Users and Monthly Active Users are more reliable metrics for determining application usage, and an increase in downloads would typically contribute to these metrics. MapMyIndia operates B2B and B2B2C businesses, apart from the B2C app Mappls.
The company said that its A&M (Automotive & Mobility Tech) revenue continues to grow healthily at 22.9% YoY, and it went live with multiple 2-wheeler EV/ICE OEM customers for Navigation Software, and a 4-wheeler OEM customer for IoT supply, OEM customer for Shared Mobility Software platform and CV (Bus) OEM customer for Connected Vehicle Software platform. It says that there was an expansion of its business with a large State Road Transport Corporation business for public transit IoT-based monitoring and consumer-facing app solutions.
MapmyIndia’s IoT-led business grew to Rs 22.5 crores from Rs 15 crores last year, with EBITDA margins improving to 8.2% in Q2 FY24, owing to “improved product mix and operational efficiency,” according to the company. It reported an expansion of business with existing Payments & Fin-Tech conglomerate customer for territory/beat planning of large field force using its geospatial analytics & API platform, apart from signing up large E-commerce transporters and multiple large cement companies signed up for IoT-led logistics optimisation, apart from a deal with a large steel company for Video Telematics for Mine Vehicles. MapmyIndia also reported acquisition of defence projects, and government projects including those with “a State Housing and Urban Development department, a State Town & Country Planning Organisation, a State Civil Supplies Corporation, a State Electronics Development Corporate etc, a Smart City and a Municipal Corporation”.
Some interesting snippets from last quarter’s earnings call
We went through the earning conference call from last quarter (we’ll cover this quarter once the transcript is out), and MapmyIndia’s focus on drones and ONDC was quite interesting:
1. The ONDC Opportunity: In last quarter’s earnings conference call, CEO Rohan Verma highlighted the ONDC opportunity for the company. Open Network Digital Commerce is a private non-profit company that is enabling the commodification of seller data for applications, allowing marketplaces to be easily created across existing consumer applications.
“A lot of the ONDC enabled apps,” he said, “now are starting to use MapmyIndia, and that means that we have a play in the increasing ONDC ecosystem, the Open Network Digital Commerce ecosystem.”
Verma positioned a use case for MapmyIndia versus Google API on the earnings call, saying that “…the biggest pain point that these days people face is when they have to put in an address, residential address and get goods delivered or food or goods delivered there. And when they type in, for example, a Google Maps API, which powers a bunch of consumer delivery apps, then they are not able to put that house address. The delivery guy has to keep calling where to come, go to the backside or it takes some extra time for that person. With using MapmyIndia APIs, that delivery address capture accurately and navigable to the front door, is what we enable. And the second is when navigating these delivery riders or delivery vehicles, the drivers and riders, there is typically a lot of churn is happening there, and they’re new to the cities. They don’t know the lanes. So like I said in Mappls app, these junction views, speed limits, speed breakers, pit costs, toll cost, all of that is there. People are able to navigate safely and more efficiently, cost effectively. And in the delivery segment or logistics segment, this has a strong impact on profitability of these companies, as well as the customer experience. So that’s where ONDC-related folks who are coming with a fresh fine set of reimagining commerce, are being able to work with us without those legacy packages or legacy tech systems. And we believe this is a moment to create new commerce in the country based on better, more accurate maps than the legacy Google system, and that’s where we are also having a lot of initiative and joint collaboration with ONDCs. So that’s the exciting thing.” (emphasis ours)
2. How drones help MapmyIndia: MapmyIndia has positioned itself as a “full stack solutions provider” in the drone ecosystem. “We can supply drones to customers who need drones. We can also provide services based on drones or solutions based on drones, meaning that we can fly the drones on behalf of our customers, acquire data, analyse that data and deliver them the relevant output. And also, we are systems integrators where drone is just one part of the solution. And of course, we have a strong capital base, strong credentials as a company. So, in that sense, we are better off than the many small players in the market, as well as people who are only pure-play drone providers because we have a lot of our own products and platforms that customers need.”
Verma highlighted the SVAMITVA project from the Indian government on the call: “The country is doing this big exercise around SVAMITVA or other kind of survey and 3D mapping, we are participating in that. Even for smart cities or state-level government projects.” There’s also interest from the private sector, “whether it’s manufacturing or energy companies which want drone-based mapping done, and there will be more use cases that will build up as time comes, as we expand our product portfolio organically and in conjunction with our inorganic investments, that we have been making. This is a large addressable market.”
In response to a question on the call about whether MapmyIndia is deviating from its core business by providing drone services, Verma said that drones are enhancing their business: “Drone is used to capture data from the sky versus the ground. So who better than a mapping company actually to provide the drone based solution where the data is captured from the drone, but then again, processed, analysed and delivered to our mapping and geospatial GIS platforms, etc.”…There’s a network flywheel effect also in the business because we are in the business of acquiring data, productizing it and disseminating it through various use cases.” While clarifying that MapmyIndia is not a pilot rental company, he said, “If a customer needs an area map or an area inspected and they want to get, for example, a 3D volumetric analysis of that or they want to understand how that area has changed, some kind of change detection, or they want to extract some data from that. For example, the SVAMITVA project, where they want to extract property rights, or land records from that. So they want to see the extent of the property. That’s the mapping use case. And that’s where we are positioned very strongly. As part of that, if we have to fly the drone zone and we have to capture the data and process that, we’ll do that as well.”
MapmyIndia is not manufacturing drones “right now”, he added, saying that the investments and partnerships they have in place “can leverage the capabilities of companies that we can provide the full solution of that and yes, these are proprietary products manufactured by company partners.” MapmyIndia acquired 20% stake on fully diluted basis for around Rs. 7 Crore in Indrones Solutions in the last financial year, with an objective to “broaden and deepen our addressable market, enabling us to offer comprehensive and differentiated end-to-end offerings to users across a large variety of industry verticals by combining MapmyIndia’s suite of digital maps, geospatial software and location-based IoT tech, coupled with Indrones’ suite of drones and drone-based solutions and services.”
3. On MapmyIndia’s moat: On being asked about MapmyIndia’s moat, Verma said that “it’s not easy to build a map data product at the scale that we have been able to build, which is using the entire country, and we are not stopping just here. So the business that we have built, definitely has a very strong moat, it’s not replicable by just capital that anybody else can potentially deploy. The amount of IP or intellectual capital that has gone in and the time investment, and then this ability to create so many use cases and so many products that we have created, usage of which further enhances the map. There is nobody else that has this ability. Of course, people will come in and try. They have in the past also — I mean, since MapmyIndia has been in business, which means since ’95, there have been GIS companies, there have been people who have tried to build data products. I mean on the big ones, not just the small ones. They have not been able to manage it.” Readers might recall Wonobo, from Genesys, who provided street view in India. Genesys now powers Google Street View in India.
Verma added that the company is making further investments in enhancing maps, with “4D high-definition digital map”, adding that the investments in drones and IoT “is seeing an important role in getting us towards the next set of advanced map data products. And on the software side, we are covering various market segments, automotive and mobility through NCASE and logistics SaaS, including hardware, and on the consumer tech, a whole range of APIs so that to enable any consumer tech company, and then a full-fledged digital transformation platform for enterprises. So in that sense, we are shoring up our moat and try to expand it further, and that will keep us differentiated in the market.”
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