C. E. Info Systems Limited (MAPMYINDIA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the C. E. Info Systems MapmyIndia Q2 FY '24 Quarterly Conference Call hosted by Anand Rathi Share and Stock Brokers. [Operator Instructions] I now hand the conference over to Mr. Shobit Singhal from Anand Rathi. Please go ahead.

Good morning, everyone. On behalf of Anand Rathi Institutional Equities, we welcome you all to Q2 FY '24 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; 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 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 the analysts and investor community participated. And we have laid down a road map of where MapmyIndia is heading, saying that we will -- 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 want to -- 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 crores of 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 '24. The results for -- in Q2, and the second thing we have always mentioned is please look at year -- for any period, year-to-date performance 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 the Q2 has ended, we must look at the half year of what we have been able to achieve this FY '24. And then if you have to compare that, compare that with what was there in half year of FY '23. But with this background, let me share with you the Q2 FY '24 again hit an all-time high, half year FY '24 delivered robust growth across revenue, EBITDA and PAT with strong EBITDA margins at 43. -- 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-on-year basis. EBITDA and PAT grew by 28.9% and 31.2% year-on-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 plus mark at the end of the quarter. Now if we just look at the Q2 FY '24, our revenue from operations was INR 91.1 crores, making it a total income of INR 99.1 crores when you add the other income. We achieved a -- which is, if you look at it on a quarter-on-quarter, the revenue of our operations went up by 19.4% vis-a-vis Q2 FY '23. EBITDA was INR 40.5 crores in Q2 FY '24 as against INR 30.6 crores EBITDA in Q2 FY '23, giving a jump of 32.5%. The EBITDA margin jumped from 40.1% in Q2 FY '23 to 44.5% in Q2 FY '24. The PBT also accordingly jumped from INR 35.5 crores to INR 45.2 crores, a jump of 24.5%. The PAT jumped from INR 25.4 crores to INR 33.1 crores, which is 30.3%. The PAT margin also improved from 30.3% to 33.4% for this quarter, and the cash which was INR 430 crores at the end of Q2 FY '23 jumped to almost INR 518 crores at the end of Q2 FY '24. Now this is -- these are the numbers for the quarter.  Similarly, for the half year, if we look at it, the revenue from operations for the FY '23 was INR 141 crores, and it has gone up to INR 180 crores in H1 FY '24, which is an increase of 27.7% which was INR 16.5 crores in H1 FY '23 has gone up to INR 78 crores in H1 FY '24, which is a jump of 28.9%. EBITDA margin, which was 42.8% in H1 FY '23 has gone up to 43.2%. PBT went up from INR 69.2 crores to INR 86 crores, which is a jump of 24.3%. PBT then, if I look at PAT, it went up from 49.6 crores to INR 65.9 crores in FY '24, 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-quarter. It was in Q4 FY '23 since when we started disclosing these numbers. The EBITDA was in IoT-led. It was 4%. In Q1 FY '24, it was 6.3% and in Q2 FY '24 returned to 8.2%. If we look at the map-led business also, it was 50.2% in FY '23 Q4. It was 54% in FY '24 Q1 and it was last quarter, which is Q2 FY '24, 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 -- are improving. So with all this financial information, I'd like Rohan to talk about where all this revenue has come from and how we have -- and what is happening in the company currently.

Thank you very much, and good morning, everybody. I think we're happy that the growth continues to be plan-based. We are both on A&M automotive and mobility set 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 solutions across all cars, 2-wheelers and even now commercial vehicles. What's also interesting is this whole NCASE suite we talked about, our spectrum of solutions. We are seeing adoption across the spectrum meaning that there are 2-wheelers EV and [ Ice ] companies, which are going live with our navigation software, but our wins also include for the first time a 4-wheeler OEM who has become a customer for line fit for IoT supplier. That opens us a large opportunities.  And then there's an OEM customers who are providing a shared mobility software platform as OEMs are looking to offer maps mobility as a service business models, our technology is now powering that and also in the commercial vehicle sector space with a bus OEM, we're providing a connected vehicle software platform. In the past, you've talked about navigation, ADAS and electric, but now the [ CMS ] is connected and shared is also seeing adoption. So that's good in automotive.  On mobility, we continue to expand our business a cross sectors and across use cases. For example, a pretty large state low 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 IoT. And then on CME side, of course, as we said before, CME revenue can be lumpy. So looking at it quarter-on-quarter, not a good idea, but year-to-date, year-on-year has grown 32%. The goal wind span sectors, new age tech as well as traditional. A lot of BFSI companies are adopting our solutions, multiple use cases. We initiated that in the investor day presentation as well as debt and we have pretty large payments and fintech conglomerate using us as an example for territory and bit planning of the large field force as well as geospatial analytics and AI for and 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 us 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 in the 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 corporations. Our mass IoT tone-based solutions are getting adopted. So that's doing well on the B2B and B2B2C side, that was also pretty good highlight in this quarter, we -- our B2C optionality started to open up. And we crossed the 10 million downloads mark on Android and 1 million on iOS. We were trending as the #1 app across all categories of iOS, not just navigation, and the #1 maps on Mappls on Android as well. And on the other side, the monetization we do with Mappls gadgets and its subscription with the full lanes, that's also going quite good. So this opens up the 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 4 to 5 years, we've kind of given the past quite in detail grounds up how we will achieve this INR 1000 crores 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.

[Operator Instructions] The first question is from the line of Mr. Shobit Singhal.

Congrats on strong operating performance. I have 2 questions from my side. First, on the revenue side, the 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, [ FFEV ] or e-commerce or retail, et cetera, which results into lumpiness in this business? And how do you expect second half for this segment?

Yes. So with lumpiness depends on what type of contracts with which type of customers. We have a combination of these kind of mass data contracts, mass 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, in the year, we see C&E kind of growing, but -- and these other kinds of contracts or agreements or transactions, whether on BFSI or e-commerce, FMCG, government, defense, they continue to grow. So we're acquiring more customers. And 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.

Okay. And second question is on the [ Ola ]. I think it's all revenue from all I think it contributes around 3% to 5% of our overall 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?

Yes. Thanks, Shobit, they continue to be a customer. They're still using us. So some of these experiments happen that we could try to build solutions, but we'll see whether consumers -- whether it meets up to the standards of what consumers are looking for. If you see the way Mappls app MapmyIndia maps are being adopted by consumers directly and the way so many OEMs, including a bunch of others meeting EV as well as the much larger ICE 2-wheeler companies are adopting us as well as on 4-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% immaterial revenue in that sense, attribute revenue, I would say, in that sense. So -- and 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 [ Harvard ] that support us, we are trying to launch a big initiative, and we've done that. So we're happy to keep advancing our maps into 3D, ADAS, HD 360, and we think that this will be the solution that in the end OEMs will need -- continue to need to be able to offer a good solution to consumers.

The next question is from the line of Amit Kadam from Canara Robeco.

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?

Much better.

Okay. So again, the question is on C&E. So just the comments on that particular thing, what is C&E. But I just wanted to check, is there a -- like is there a competition in this particular segment, like with whom you compete and how the business comes to you, it's like a basis this particular thing you do it for a customer. Just can you elaborate the whole point I wanted to just say how the business comes to you and like do we have to compete for this particular business? -- because if the growth fluctuates over quarterly, is the underlying market dynamics only event that rather than any competition at this…

Yes. So see, there is -- probably we are by far, it's only and by far, the best map and data company, MapData product company. So when large companies want to have an all-India comprehensive digital map data, whether for the consumer-facing maps, applications or for the e-commerce or other kind of enterprise use cases, for that we are the company of choice. The 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, there are very small slivers of 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 solutions. Every vertical, we provide a suite of use cases, we had BFSI, e-com, logistics, FMCG or on the government side, 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 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 why 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 -- which is generating the growth. So I hope that helps you understand a little bit dynamics of our C&E business.

Right. So what I can get from this particular thing is that whenever our customer wants a full bouquet or kind of thing, then we are the only choice for the current times. But only like case-to-case basis if you break it down in that particular, the value chain is a smaller part, then there will be some competition for each part.

Yes. And that's what our land and expand approach is. So we enter the customer. If we have 10 or 12 use cases, at least we can enter with 1 or 2 and then the upselling happens or their own usage scale-up happens and that's a gradual growth that we've seen, like I use the example of that state to Transport Corporation. There, it was a -- we landed with one use case and their own usage has expanded. In the case of the fintech conglomerate, they were using us for maps in the consumer-facing application, and now they're using us for their enterprise use case as well and for the sales force territory planning, deep planning management. So that's how we have -- 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.

And just my second question is, again, continuing 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 cases, 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 the iPhone customers that they -- what -- 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 or 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 an ecosystem like MapmyIndia? So eventually down the line 5 years, some other company wants to do it, then whether these guys would eventually lead to an incremental competition in this area in the next 5 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. Now if you think of anybody, first is try to understand what is the -- for anyone or it applies to us also. For anyone to get into any business, is it -- how they want to address their core business 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 is to continuously keep updating the maps now with 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. We have a long list of them and what has happened to them. Now the next part is, there is a big mode factor, there's 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 these are the factors which is leading us 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. And there may be at times some of these the best word to use as people might do experiment. 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 this, what are they trying to do? This is the best answer I can give you.

[Operator Instructions] The next question is from the line of Mohit Motwani from Nuvama Wealth Management.

Yes, my question was like in the first half, you have grown around 28% on a year-on-year basis. Previously, you have lagged for around 40% growth on an annual basis, so -- which implies in the second half, we'll be to do around 52%. So is that something that you're looking for in the second half? Or any color on that?

Yes. See, I think we are quite excited about the second half, especially Q4, in terms of opportunities ahead. And yes, 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 -- you have any pipeline of projects that you expect to win in Q3 because you are specifying Q4 in particular?

I mean, I think we're just trying to give a general sense of where we see the business growth coming in. And when we see -- I don't want to get to specific of what will happen in Q3 or Q4. But just to give you a sense of what we as management...

I think he's trying to address that question, which you made saying that if it was 28 now, will it be 52 first of that previous half year. In that context, he's talking about that we see certain things happening in Q4, and that's why we made that same, not that nothing is happening in Q3.

Sure. One more question was around -- there's a big jump in your receivables. If I look at the cash flow, like there's a negative INR 31 crore impact. So is there anything to do with increase in government contracts or increase in defense contracts? Any to do with that?

No, let me address that. I know that maybe that question will come up. If you look at our receivables in terms of aging and connection period. First is the September billings 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 to 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 one -- the last one, if I can chip in just one more. So the IoT line margin, definitely, we are seeing an improvement in the last 3 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 the [ landing ] on the IoT devices being sold remains very good. Can you give some color on that?

It's a combination of both 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 a SaaS. And hence, the margin is improving. So that's our business strategy rather than just to -- rather than just to sell the hardware as is and wait for a year or so.

The next question is from the line of Vimal Gohil from Alchemy Capital Management Private Limited.

Yes, sir. So just taking forward the working capital question. So you expect this INR 89 odd crores 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 a fair assessment?

I can't exactly predict just like I said that in the September 30, 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 aging at the end of March is hard for me to predict -- but I think we are overall saying that 60 to 75 days is the overall consideration we look at.

And in general, selections, as Mr. [ Anas ] said, the collections are going well. It's not that overdue is increased, like we said, in a position of the product and platform company. So I think in all that sense, in the wind spine. Of course, we watch this, but we are not concerned about it.

Understood. So no risk of 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 180 days, in some cases, we do try to make provisions, and you will see it in the balance sheet. And that's on a conservative side, not on an aggressive side.

Right. Understood. Sir, 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 crores of our revenue. And if I were to look at the sales of Ola, they sell about 8.5 lakh odd 2-wheelers per year. So if you were to look at the revenue per vehicle that doesn't seem to be very high. So is there assessment that the maps that are getting sold are probably partially in -- are partially sold to some of the vehicles, not all the vehicles or...

Okay. Let me help you on that. As Rohan also said that it was a personnel at a different level, we had requested for support at the point of time of launching, Ola had requested and made a special request because I was involved. I said fine, if CEO of Ola is making that request. Of course, we didn't know that he has other plans at that time. So we did it. So that's -- and it is not even 1%, let me put it, it is lower than that 1%. So 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 they are going to become a competition or they will also experiment and then ultimately forget about it.

I mean I'll just -- I'll add 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 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 techs, 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 and try to have some solution, but it's a matter of being able to sustain investments, which are quite large over time, not just on -- 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 Mappls 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 this. 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 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 a long time.

The next question is from the line of Anmol Garg from DAM Capital.

Congratulations on good set of margin performance. So I just have 2 questions. Firstly, on the margin side. So we have seen strong margin performance in 1H upwards of 43%. While initially, we have guided for 40% margin range in FY '24. From that perspective, do you see investments as the company would have to make in the second half that can bring down the margins into watch?

Yes. I mean, it's good we have this [ cushion ] 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 levels of investments we are doing. We are a deep tech product and platform company, remember. We're building 3D maps. Now we call it 4D digital maps. We're building different types of software or the automotive as well as for the enterprise market. 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 margins allows us to innovate. So the company can go into a different target 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 currently keep making in operational efficiency, and that also helps us in giving us a better margin.

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 revenue, but let's say, in 2 to 3 years down the line, how do you see this business to be? And what in all services that MapmyIndia wants to focus on, particularly on the drone side of things?

Yes. See, I mean drone business is going well for us. We continue to get customers. We are supplying drones to them. We're providing done-based solutions to customers. We are able to provide this full package of mass IoT and drone-based platform, which allows people to map and see some cloud as well as the sky and then get software solutions for various use cases. and especially useful in urban developments or even tourism, real estate, 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. We are being able to cover the span of the drone opportunity. The way we've covered the span of map opportunity or IoT opportunity. We want to cover a span of drone opportunity. Of course, it will not happen in day 1 or 1 quarter, 2 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'll 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 comment today what exactly we'll be doing. But I don't know if you want to add...

See, 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 is a stand-alone 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.

The next question is from the line of [ Vishnu Gopal from Singular Capital ].

Yes. Just a more question on the cost of materials in your financial statements. So despite the wrap-up...

We can't hear you. Can you pick up, please. Sorry. Mr. Gopal there's some disturbance in nearline.

[Operator Instructions]

[indiscernible]

Not very clear.

Hello. Is it better?

I don't think the voice is coming through.

Well, as there was no response from the current participant, the next question is from the line of Dhavan Shah from AlfAccurate Advisors.

So my question is on the Map-led EBITDA performance. So you mentioned that because of the operating [ leverage, there ] is only margin improvement during this quarter. But if I look at the quarter-on-quarter basis, the revenue growth, the hardly INR 2 crore quarter-on-quarter recurring revenue. And if I look at the EBITDA, the sales number has been improved. So I'm unable to understand how the operating leverage has helped us in the map-led business. And can you please share the revenue breakup between A&M and C&E under the investment during this quarter versus the last quarter.

Three things. One is we shouldn't look at the company Q-on-Q. We said year-to-date, year-on-year. Second is this I think -- yes, so that's on the Q-on-Q and year-on-year kind of operating leverage question is across the whole company. We -- I don't think -- I don't know if it's a specific point. It's on the whole company as a product and platform company. And A&M and C&E have given. In Q2, we got INR 47.9 crores from A&M. And the next one, we got a time through some A&M versus C&E, we got INR 33.2 crores in Q2 and next one, we got INR 21.5 crores...

Right. But this is for the entirety, 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 change?

Yes. We don't give that split...

Okay. But C&E roughly, can we assume that it is roughly INR 30-odd crores kind of the quarterly run rate that we are maintaining at this moment?

I missed your point...

In the C&E business under the Map-led, is it safe to assume that we are maintaining roughly INR 30-odd crores kind of quarterly revenue run rate?

There's no split that we specifically give. So I don't want to comment on our specific numbers.

These splits are -- 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 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 had given the guidance. If it is more, will it -- if you say that we need to get used up in some investment, it will not be used up in some investment if we bring operational efficiency is a matter of timing.

The next question is from the line of Moez Chandani from AMBIT.

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 Mappls as well as the investment that you've done in Kogo Tech labs.

Thanks, Moez, for the 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 across that milestone in Q2. On the back of which, actually, there's a number of monetizations we will look at in the time to come. First, obviously, being upselling the gadgets of products and subscriptions of our own. And so that combination of via app or offline and online commerce of our own additional projects to Mappls app consumers because these gadgets are usable like the dash camera, the tracker or the smart helmets with all the smartphone connected infotainment system, all the power to Mappls app being at the center. And so these  gadgets will be one form of -- and the subscriptions will be one form of monetization. But we on that, a bunch of different existing 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 place where you can get best prices or travel bookings like hotels or flights or even car rentals or other travel-related gears 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 tracking Kogo, you'll start seeing a very new age map-based but not only a map application, which is going to become a travel 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 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. And finally, there's a synergy, the more B2C 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 automation. That's overall B2C.

Okay. 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 margin in right? Not the market.

No, not the market, yes.

It's a combination of product mix and choices that we're making about which products to sell and this product is not to sell an operational efficiency. See there's many levers 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 levers 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 continued improvement in margin on the IoT business.

The next question is from the line of Sameer Dosani from ICICI Prudential Asset Management Company.

If you look at margins in IoT, what is the kind of -- is there a change at a particular scale that you want to retain IoT business? That's the first question.

Are you asking where we want to take the...

Margin range. Yes, yes. 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 feasibility in this business, like H2?

I mean -- so it's -- this IoT business is still in growth phase. We see pretty large opportunity -- and so it's in early growth stage. So we want to keep investing behind that growth. The good thing is [indiscernible] has been historically pretty fiscally disciplined companies, tight on execution, tighter operational efficiency. So when we acquired [indiscernible], we merged our IoT business into that. Then every quarter, there are things that we can do to create that same discipline or rigor that we have in Mappls. Of course, the margin structure -- terminal margin structures will be different in the 2 businesses. But we want to keep -- we are like focusing on growth as well as on improving profitability. And just a balance we are maintaining every quarter. I don't want to say till what time at in what level or what rails, but obviously, we still see growth and growth potential in the margin, such a precise growth in revenue for this company. It's in early growth phase.

Understood. So margins should remain around this range until we are in the growth stage, that is how we should think of...

Yes, yes. I mean margins should remain -- I mean, over time, I'm not giving a time frame. But over time, margins, we would like to see improve also.

The improvement already from 4% to 6% to 8%. And we definitely expect definitely understand that as the operating leverage there also kicks in. Just like in MAP, we already have the operating leverage. And in IoT, we still do not have that level where the operating leverage will kick in to provide a nice, very good arrangement assume that's the best we can say at this time.

And that is what my question was that is there a scale where that kicks in that operating kicks in?

We couldn't share the last...

I don't know, if I'm just trying to tell you what -- and let me try to explain before G2P came on bold, they were at INR 8 crores of revenue. Last year, it was something of the order of INR 55 crores. And this time, already, we are seeing IoT-led business for half year is INR 45 crores, INR 46 crores, okay?

So we truly appreciated to 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 Y-o-Y basis? How should we think of that -- I mean, the business ex of and excluding the IoT business, that business growth has been around mid-teens. So this is how we should think of the growth for the next 2, 3 years? Or if you can share some like this?

No, no. I wouldn't think of this as the carmine growth rate at all for the next few years. I mean it's going to be more than that. And so that's the mix over 4, 5 years, we've tried to give a picture 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 s 6x from a lower base government will be less than 20% in IoT, we see us. And so I think consolidated is how over the next 4, 5 years, 35% to 40%, different contributions from these -- and to be honest, there are use cases that we have or technologies that we have whose market isn't necessarily there even yet. So over the next 2, 3 years, things might change also in a good way. And so 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, 2 years, 5 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've taken on inventories and around INR 10 crores for receivables.  Can you hear me?

Yes, now it's better.

Yes. So I'm saying INR 10 crore -- INR 9 crore provision you've taken on receivables and INR 21 crores you've taken provision on inventory. If you can clarify that if there's something should...

What you seeing provision of inventory? What did you say?

Provision for inventory obsolete that's reflected in your cash flow around INR 21 crores.

I don't know. I'll get back to you. Let me look into it.

No issues.

All right. I'll look into it...

I'll do that.

Okay. Let the next question come, if I get the answer now, I'll give you.

The next question is from the line of [ Niki Sharma from MC Pro Research ].

My other questions are already answered. I have a book keeping one. So your technical service outsource expenses came down sharply this quarter. How should we look at as a percentage of revenue? Some color would be helpful, is 4%, 5% of the revenue -- and...

Really, we are not able to hear, maybe at our end, but I request you if you can speak louder.

Is it better?

Yes, this is better.

Yes. So I have a bookkeeping question. Your technical service out on expenses have come down sharply in this quarter. How should we look at it as a percentage of revenue on an annual basis. Some color would be helpful.

Now technical services outsourced and itself means that something that is getting done from outside, correct? -- 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...

But so what kind of product investments we do -- because it's a combination of product investments, customer projects or customer delivery execution 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. Then 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. In the same vein, let me explain that inventory, somebody was talking about INR 21 crores is INR 2.1 crores, not INR 21 crores.

[ Mr. Sharma ], do you have any more questions?

No.

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, I 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 we 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.