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

Ladies and gentlemen, good day, and welcome to the MapmyIndia Q3 FY '25 Earnings Conference Call hosted by Anand Rathi Share and Stock Brokers Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Shobit Singhal from Anand Rathi Share and Stock Brokers Limited. Thank you, and over to you, sir.

Thank you, Rutuja. Good morning, everyone. On behalf of Anand Rathi Institutional Equities, we welcome you all to Q3 FY '25 conference call of MapmyIndia. We have with us today Mr. Rakesh Verma, Co-Founder and Chairman of the company; Ms. Sapna Ahuja, who is the COO; Mr. Anuj Jain, CFO; and Mr. Saurabh Somani, Company Secretary and Compliance Officer. I will now hand over the call to Mr. Rakesh Verma, sir, for his opening remarks. Post that, we will open the floor for Q&A session. Thank you, and over to you, sir.

Good morning, everybody, and thank you, Shobit, for the quick introduction about the team that is here today to respond to any questions that will follow my talk. So let me start saying that overall, we are happy with the results of the Q3 FY '25. So in Q3 FY '25, we successfully operationalized the joint venture with Hyundai Autoever in Indonesia, marking an important step in expanding our global footprint. As part of our long-term strategy, both the Mappls App and Mappls brand will continue to be integral part of the organization. On the financial front, our revenue for Q3 FY '25 reached INR 115 crores, showing a 25% year-on-year growth. Over the first 9 months of the FY '25, our revenue grew to INR 320 crores by 17%, up from INR 273 crores during the same period last year. In terms of profitability, our EBITDA for Q3 FY '25 was INR 42 crores, yielding a margin of 36% compared to INR 36 crores in Q3 FY '24 at 39%. For the first 9 months of FY '25, our EBITDA stood at INR 122 crores with a margin of 38% as compared to INR 114 crores and a 42% margin recorded in the same period last year. We will continue to prioritize the Mappls App and the key strategic asset while we will calibrate the costs associated from Q4 onwards. Our profit after taxes, PAT, for the first 9 months of FY '25 was INR 99 crores, up from INR 96 crores in 9 months of FY '24. In Q3 FY '25, Consumer Tech & Enterprise business, C&E is what we call, revenue surged by 39% to INR 65 crores year-on-year; while Automotive & Mobility Tech, A&M, revenue had a steady growth of 9% to INR 49 crores year-on-year, much better than the auto industry growth itself. In the first 9 months of FY '25, our A&M revenue grew by 16% year-on-year, and number of licenses grew by 23%. Our C&E revenue saw a 19% increase in the same period. Our Map-led business delivered a very strong 33% growth to INR 87 crores in Q3 FY '25 year-on-year, while the IoT-led business had a growth of 4% year-on-year during the quarter due to delays in some anticipated businesses. However, subscription services grew 31% year-on-year for the quarter. Our continued focus to build IoT business with higher margin subscription revenue has resulted in the IoT-led EBITDA margin to grow from 8% in 9 months FY '24 to 12% in 9 months of FY '25. Our efforts in the previous quarters culminated in securing a major deal with one of the largest global social media networks across their app platforms in India as well as significant wins in the burgeoning quick commerce space and BFSI vertical, which had a strong positive impact on our C&E business. We also made significant strides in customer acquisition and deepened relationships with existing clients through upselling and cross-selling initiatives. This includes notable go-lives and project wins across various sectors such as automotive, fleet management, tech start-ups, traditional corporations, government and defense. With this, I would like to end my part of the initial commentary. And the team is here, including me, to answer any questions that the participants have. Thank you.

[Operator Instructions] The first question is from the line of Shobit Singhal from Anand Rathi Share and Stock Brokers.

Sir, I have 2 questions. Sir, first on the C&E segment. So C&E revenue growth trajectory is sustainable, I mean, as it appears that it was a onetime project revenue, which got booked in this quarter, which explains the steep rise in outsourcing expenses. So can you elaborate more about what we did in this project? And is the order related to this project exhausted or more to come in Q4?

I didn't understand your question well, Shobit. Did you mean that our growth in C&E this quarter is a onetime thing?

No, no, I'm saying that -- so this growth which we got, so there was a -- I think there was one government project as well, which we booked in this quarter, and also there was a steep rise in our outsourcing expense, which you have mentioned in your presentation as well.

I think there are 2 different things. The outsourcing is a different -- is a question I can address because that's the only item that probably in the presentation, you will see quite a big jump in our expenses. And that relates to the corresponding government projects, which is part of the revenue. So those outsourcing expenses, why we do is when certain projects have to be scaled up very quickly and within a very quick period of time, we do have to go outside and use outside resources. And also, it includes certain software costs, what we call it, which becomes part of it. So altogether, it is very much in line with the revenue that we generated during the quarter.

Okay. And sir, second question is on the Gtropy. So last quarter, you said that Gtropy funding issue was resolved. But if you see, hardware sales did not pick up this quarter as well. So any specific reason? Or have we rationalized our authorized dealer network here?

Okay. I don't use the name Gtropy. I say our IoT-led business. Yes, in Q1, there were -- due to certain constraints within Gtropy, there was a problem. And now in Q3, we have -- I just mentioned it that the certain IoT-led business we were expecting from the customers, which has been delayed and, hence, the impact of it, but it will happen in the next financial year. But at the same time, if you see the good part of the IoT-led business, subscription revenue has increased dramatically.

Right. And sir, last question is, so at the start of this financial year, so you have given a guidance that for the full year, we will be able to achieve around 25% kind of growth. But given that in 9 months, we did only 17% type of growth. So I as for fourth quarter, it's around close to 45% -- sorry, first. Are we still sticking to our guidance?

Yes, we still believe strongly, already 1 month of the Q4 is over, so we still believe strongly that we will be able to attain the 25% growth for the whole year.

The next question is from the line of Chandramouli Muthiah from Goldman Sachs.

My first question is just if you're able to provide a little bit of color on some of the deal wins that you've announced this quarter and what that does to your order backlog? I think the last update we had on the order backlog was towards the end of previous fiscal year, roughly 1,370 crores of open orders. Just want to understand what the quantum of recent deal wins has been, what the nature of those deal wins has been and where our existing order backlog looks like in terms of visibility going forward?

Well, the exact number of the order backlogs or what we call open order book, we'll disclose it as part of the 31st March, and that's the practice we have been following all through. But the good -- from the other question that you asked, we have been winning and the -- new projects winning, I think we have described in the investor presentation. If you look at the C&E, it's almost -- many verticals of C&E, we have been able to win, including the global contracts. So the names, I wish I can -- I could have named them. But unfortunately, because of certain NDAs, we are not able to mention without their approval. And hence, I'm keeping quiet about it, but anybody can make their own guess. So order backlog or open orders, how it will look like at the end of the year, definitely better than last year. That's the best answer I can give you. We are on a very strong trajectory, and we believe that there is a lot to be done by us in execution, and the market is there. But of course, we have to put our act together, honestly.

Got it. Got it. That's helpful color. Second question is just around seasonality. Historically, we've seen second half and last quarter seasonality pick up in terms of MapmyIndia's business. And we had a little bit of unfavorable lumpiness in the first half of the year in terms of contracts closing and so on. So as you look towards the end of the fiscal, could you just share some of the drivers that are giving you the confidence that you can meet your 25% sort of implied growth target? And then I think as the previous participant asked, a meaningful pickup in growth expected in the fourth quarter.

Okay. So to help you get some color on the Q4 confidence about 25%, let me say that I did mention about it even in the last Q2 earnings call that there are certain contracts which will get completed -- not completed, I mean, which will generate us revenue in Q4, and they exist. They are a long-term contract, and hence, we are not worried about it. And these contracts are, one side, they are from C&E, either from the corporate world or the international companies or the government side. Even in the automotive, the -- I must give you all a general color that the Q3 of any financial year, the automotive is slow. And those who do the automotive OEM analysis will find that the -- because ours is based on manufacturing of the vehicles, not sale of the vehicles. October, November, December, particularly November, December, the vehicle production gets slowed down because of the new year model. And hence, you will find the A&M not doing that good in Q3, the growth, but still we have done 9% growth. I think, Sapna, it's 9%? It's 9%. And you see the number of licenses, I also talked about, have increased 23% on a 9-months basis. That shows that our penetration either within the same automotive OEM or by winning new businesses, particularly in the EV space, is also growing.

Got it. That's helpful. And my last question is just around your earlier remarks around the temporary increase in technical outsourcing costs. Is that cost that you're incurring ahead of the curve for potential pickup in revenue you expect in certain types of business or contracts?

No. It is related to the revenue. The way the accounting standards do is it relates to the revenue. It doesn't -- expenses have to be tied to the revenue. If I'm expensing it, I better have the revenue for that.

Got it. So it's unlikely that this elevated level of technical outsourcing costs recurs in the near term? Is that the way to think about it?

No. The way to look at it is what kind of project -- this technical outsourcing, mostly it goes for the government projects. Let me be straight on that. And in that, if the revenue is high in the government projects in a particular quarter, let's say, it was in -- part of it was in Q3 also, but in Q4, if it is high, the technical expenses outsourced will be also high.

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

I had a couple of questions. Firstly, I wanted to understand that how are we looking towards the government business? So are we bidding on government-led GIS projects? And also wanted to understand, how are the margins in these kind of projects?

Okay. Government projects are no longer -- we no longer believe that it's no-no. If you had asked me 3 years back, we would like -- we always used to shy away. But as we are watching that a lot of government schemes are coming, and in this area of what we call GIS or geospatial, whichever terminology, we would not like to skip them. We would like to grab those opportunities because there are some added advantages also. The only issue we are keeping in mind and we'll continue to keep that in mind is pick up only those government projects where we know that we will get paid. So if you look at even now, the receivables in government, overall receivables is less than 100 days, if you have seen our financial statement. Overall -- okay. It's fine. So overall, it has -- it is less than 100 days receivables. Now it is a mixture of government receivables versus other. But the beauty is we are not having a bad debt or our provision for bad debt is not increasing. So we are happy to do that government projects, and we are doing it. The last part of your question is margin. Definitely, in the government work, the margin is not high, like what you see in typical corporate and automotive. So it does draw down the overall margin of the company, but we have -- we -- at the Board level also, we are very clear that we must undertake them for hundreds of good reasons.

Right, sir. Understood. Sir, just a follow-up on that. So given that we are taking now more government projects, should we assume that our more sustainable margin range would be around 35%, 36% going ahead?

35%, 36%, what margin you are talking about, gross margin or you're talking about net profit?

EBITDA margin.

EBITDA margin is a net margin only. If -- I'm not aware which government projects for which company provides 35%, 36% EBITDA margin. I'm not -- if you can help me and tell me, I would love to pick up...

I'm talking about the full company's margin. Just wanted to understand that...

For 9 months, we are at 38%. And I can tell you that by the year-end, we might have 20% of our revenue coming from the government projects. I'm just giving you a kind of a ballpark number. And if we are at 38%, well, I can't predict, but the year is almost ending. So we should be around that only, somewhere around that.

Understood. Understood. Secondly, sir, I wanted to understand our confidence on next year's growth trajectory. Now do we have enough order book and enough confidence that we will go back to the growth trajectory like we have in the last 2 years?

Well, if we maintain a 25% growth rate, you can do -- you can use your calculator and you will see that we'll attain INR 1,000 crores in FY '28.

Right. So should we assume a trajectory of around 25% growth rate going ahead?

Yes, we are committed to that, and we -- our plans are all based on that. And that's why I said in the beginning that good execution and the team is very strong, so we don't see any issue. As a matter of fact, just to give some color, yesterday in the Board meeting, all the 4 business heads presented their case. They explained everything to the Board members, and they were very happy that the team is fully competent, qualified and experienced to carry on this target of INR 1,000 crores for FY '28.

Understood. And sir, one last one from my end. If I look at our B2C spend this quarter that you have indicated that you have spent around INR 5 crores in this quarter for B2C. Now going ahead, how should we see these spends? Would it be range-bound? Or would it increase as we focus on the Mappls application?

Okay. Let's separate -- put the correct color on this B2C. As far as the Mappls App is considered, I don't think we ever have looked at it as a B2C business because the Mappls App is a driver. A lot of R&D, a lot of innovation is shown through Mappls App. Take the example of the Junction View which we did, that was an innovation within the company, which was depicted through Mappls App. But Mappls App doesn't give revenue, but the use of those technologies, innovations lead to creating revenue in the B2B. Mappls App, I don't look at so much as a B2C business. I mean I think at least I'm able to make that clear today. It is an integral part supporting our B2B and B2B2C business. What you are talking about B2C business is we are -- that's what we have from Q4, starting from Q4, but the impact -- I mean the expenses could not be saved in Q4. But going right now onward from Q4 now, we are calibrating that and saying that we'll not spend on creating a business out of Mappls App at this point of time. But certainly in the future, if the opportunity comes, we'll look at it.

Understood. Understood. Sir, are we giving any size of the deal that we have signed with the social media app in this quarter?

I wish I didn't have the NDA and I could have talked about it. So I hope you will understand.

[Operator Instructions] The next question is from the line of Abhishek Kumar from JM Financial Limited.

First question is on Hyundai Kia, both the India deal as well as the Indonesia JV. Last quarter, we understand, because of lower production, it is not reflecting. But how has that deal progressed? Have we now increased the number of models where our software is going in? And how should we look at it in terms of achieving its peak quarterly run rate going forward? And also any color on how -- what are the progress on the JV? When can we expect revenues or some profit coming from the JV?

From our side also to give you more color, I'll let Sapna say a few things, and then I'll add on to it.

Yes, I'll address the question specific to Hyundai and Kia vehicles. Yes, from this quarter onwards, all models of Hyundai and Kia will be having...

Or are having.

Yes, they are all -- and in, say, Q4, completely 100% will be there; Q3, partially, yes. So Q4, 100% of these models will start having MapmyIndia maps built in. As regards to the Hyundai and Kia vehicles in Southeast Asian market, there is still some time. We are working towards that. The initial part of readiness of the content happened. And now we are productizing it to make sure that it soon -- very soon starts generating revenue, and we see that happening maybe towards the next financial year, yes.

Okay. Let me add something more. The JV in this quarter, Q4, the JV is getting -- I mean JV was operationalized in terms of its legalities and all that only end of last year. So they had only 10, 15 days even to report anything about it. So Q4, they are going to put things in place, make sure that the 8 or 10 countries' maps are all in place. And hopefully, the revenue one, that will go to JV only for what they license to Hyundai Kia for the Southeast Asian countries. But the other opportunity that we are getting is because of those maps and our software, interesting thing, I hope you can understand, our software will go to Hyundai's competition, non-Hyundai Kia cars because they will not take the software of Hyundai. And that will start generating us revenue. But again, we hope -- we are hoping that either from Q1 or Q2 of next financial year, we'll be able to get that. Did I answer your question?

Yes. I mean that's very detailed and clear. One quick follow-up there. Just in terms of size of the market, our understanding is that the volumes in Southeast Asia are similar to Indian market, but the realizations are 2, 3x of what we get in India. Is that true? And does that mean that the TAM that we are looking at, potential TAM is 3x of India's automotive market?

It will take some time, Abhishek. I mean, see, joint venture is formed, they will start putting pieces together. And in automotive, always there is a 1-year lag at least from the time -- let's say, example, one Chinese company like BYD, just as an example, if they say that, okay, they will go ahead with our solution, with the JV, our software, JV's map data, it will take them at least a year to put it, officialize and put it in the vehicle. So expect -- and that is the beauty of the automotive OEM, once you get in and it gets started, then you are there for almost like a 5-year journey. So don't expect any magic numbers. But the more we should look at it, how fast we are able to win during the FY '26 period from the -- because of the formation of the JV.

Certainly, TAM is quite big.

TAM is like India size.

Yes. Okay. Yes, my question was more around TAM, not our revenue, but point taken. Next question is on some of the wins that we have had in quick commerce, et cetera. That's the space that I assume even Google Maps target very aggressively. And they have -- they cut their prices also a couple of quarters back. So good to hear that we have been winning in e-commerce and new-age digital. What is, in your view, leading us despite competition being aggressive in pricing to win these? And does that, in your mind, validate the product market fit that we have and kind of addresses -- I mean, anything you can give in terms of why we won over competition in some of those deals?

There are a few small things, a few important things, and they matter. The quality of our product, which means the map data underlying the APIs or SDKs that we give it to them. And when that is better than the competition, these quick commerce and all these -- quick commerce is particularly very hyper local. And that level of detailed maps is what is helping us to win also.

One is quality of product. The other also is quality of service. I mean we're being very agile, being very flexible to support them with the integrations, with whatever desires they have in terms of technical features because we have control over the complete data in the back end. So a lot of new innovation features that they want, they are able to get it implemented through our product and our services that we provide along with that. I think that's where they find it more comfortable to work with us.

Sure. One quick follow-up on this. Just in terms of order to revenue conversion here because these are APIs and volume-driven, does it mean that the order to revenue consumption is much faster compared to any other typical B2B or B2G space, and therefore, I mean, the revenue growth here could -- or ramp-up could be faster?

Yes. Here, in these cases, the orders are typically more in terms of what you consume is the order for that month and that's the revenue. It's not like Hyundai Kia, INR 400 crores of order contract to be consumed over 5 years. So you are right, it's immediate. It is a contract with them that they will work with us for the next X number of years, but we don't estimate here because it is not known how much consumption will happen.

The next question is from the line of [ Prachi Patel ] from Aventus Capital.

I had a couple of questions. So the first one being, what is the expected revenue contribution from our drone services towards achieving our INR 1,000 crore revenue target for FY '28?

I think I would rather like to skip this question at this point of time because we will have our business planning session end of March, and we'll work it out and maybe next time, we'll be able to tell you that.

Okay. Sure, sir. So my next question would be, what factors have contributed to the decline in our device sales within our IoT-led segment this quarter? And was this decline an intentional strategic decision?

Sorry, can you repeat that question once again? I'm not very clear.

Yes. So I meant to ask, what factors have contributed to our decline in the device sales within our IoT-led segment this quarter? And was this decline an intentional strategic decision?

Yes. I think we have mentioned this in the presentation as well that there has been a delay in certain business that we were expecting to happen in the last -- in this...

For the large ones.

And those were the large contracts that would have generated that revenue. Since that did not happen, you see that decline. But it's not that -- it is just postponed to the future quarters. It's not that it's not going to happen. Yes. I hope we've answered your query.

Okay. So any idea on when that would be happening, if it's postponed for the future?

Well, let's wait. I mean, at least it will not happen in Q4, that I can say for sure.

Okay, sir. Sure. My last question being, with our partnership with Qualcomm Tech, what revenue impact and growth opportunities do we anticipate in our Automotive & Mobility Tech segment in the upcoming quarters?

Yes. So initially, we are looking at this engagement with Qualcomm mostly from the perspective of the automotive OEMs, not the aftermarket, but the in-line line set kind of products and solutions, mostly around the connectivity front. This is -- given that it's for automotive OEMs, the impact on revenue will be seen post 1 year at least. Yes.

Let me add some more color to that. In automotive OEM, like we are Tier 1 suppliers, partners in our own space of navigation, data and all that. Similarly, there are lots of global players who provide certain types of technologies to these OEMs as Tier 1 also. Now this is a very nice marriage between one of those global players like Qualcomm and us so that the technologies they have and what we do, the OEMs will find it much more comfortable to work together with us.

The next question is from the line of Nishant Chandra from Temasek.

I had a question on the IoT hardware line that has been -- the IoT hardware revenue profile. So just to understand the number of units sold, this would be something in the ZIP code of 170,000 units that we've done on a 9-month basis. Is that right?

Say that again, number of units sold during the 9 months...

So for the 9-month period, we've got a -- the revenue number from IoT hardware is disclosed in the investor presentation, right? Now when I compare this with last year in terms of number of units for full year, I think we did something like 300,000 units of hardware sale. I'm trying to understand what this INR 38.2 crores of revenue pertains to. This should be something like 160,000, 170,000 units of sale. Am I thinking about it the right way?

Yes. I mean the 9 months devices is around that number only.

Okay. I understand. And the full year number would again track something close to 300,000? Or is there something that we need to change the expectation versus last year on the baseline of hardware revenue?

Well, I don't know. Did we share that 300,000 numbers or you guys estimate it on your own?

No, 300,000 is there in the annual report. I think you -- I think the IoT double-click had the number of devices, the revenue from hardware and revenues from software split in the annual report. So I was just trying to see what is the unit value and then I use the same unit value here to see what is the implied number of units.

300,000, I don't think so, okay? Let me -- for this financial year. But well, what -- the good thing that has happened is while a couple of -- I think 2 of the businesses that we were expecting to start generating revenue from Q3 itself, that got -- that is postponed, put it that way, for the next financial year. We focused also on seeing how the subscription revenue increases. And that's what you see that there is a 30%-plus growth in that, which actually is ideally what that's what we would like to see. The hardware sales being down has affected on my revenue growth. Otherwise, the revenue growth would have been higher. Is there a 25%...

I mean I think the hardware revenue declining Y-o-Y per se is not a -- so the way we look at it is that there are 2 parts, right? So here, it's not like you're making profits from hardware sale, which is materially large. The profits are anyway driven by services sale. But -- and hardware effectively enables you to make the services sale. So that's why I was just trying to see what is the universe of sales that we're doing on the hardware side. And if that is -- so let's say, if it is not tracking, let's say, last year's number, how should we -- why is that the case? Because your points of presence on the retail side should be similar to last year. So what is -- how should we interpret that momentum on sale of hardware?

Retail side has not gone down. Some of the big projects that we were expecting this quarter, had that happened, your number of 300,000 or something like that would have happened. So that's the reason. I mean we are just giving you the exact picture. That's why it should have happened. Okay? And during the whole year, whatever business we expect because these are the businesses you work for a year or so, such large projects, 1 or 2 slips can happen, and it has happened, and we are acknowledging it.

I understand. And the last one is, if I were to look at the stock of devices, which is giving you this subscription revenue on IoT sale, where would that be currently in terms of closing number? Because I think that number was close to 0.5 million devices in end of '24. That should be something like 650,000, 670,000 devices for 9 months '25. Again, is my number broadly the [ right call ]?

You are talking about the inventory or you are talking about...

No, no, the number of -- so if I look at the sale of subscription devices in IoT, how many devices would be subscribed to your IoT services? This should be somewhere around 600,000 to 700,000 units is what I thought. I just wanted to verify that number with you.

Your number is right.

The next question is from the line of Gautam Rathi from CWC.

I had a couple of them. First, on the Hyundai contract, just needed some clarification. So this is a INR 400 crore contract for 5 years, but how should we think about the peak ramp revenue in this contract, right? Is it fair to say -- because even if I take average, it's an INR 80 crores, but is it fair to think that at a peak, this could be like INR 100 crores, INR 120 crores kind of a revenue? And just to take a guess, today, we would be not even, say, INR 10 crores to INR 15 crores in that contract. Is it fair to think it that way?

See, when they have signed a contract for that much, okay, and they have said that in 5 years' time based on their projected sale of vehicles, now they have not guaranteed every year or every month's amount, quantity. So if -- you can look at it many different ways. One is INR 400 crores divided by 5 gives you INR 80 crores; INR 80 crores divided by 4 quarters gives you, how much, INR 20 crores. That's one way. The other way is Hyundai is also expanding. Like in Q3, their sales was also down, like [ all of us ]. Nothing -- I mean, from Q1 normally, Q1 and Q2, we have seen automotive OEM, their revenue going up. This is what we have observed. So you can track it very easily with Hyundai car sales. And as Sapna said that all the vehicles of Hyundai Kia, which comes with the navigation...

Or connected...

Or connected vehicle, they will all have, no exceptions, they will all have MapmyIndia maps. So it might -- we -- starting from X number, it might become 2x maybe in 2 years' or 3 years' time frame, it's possible.

Understood. And sir, on the other thing on the Hyundai JV, last time around, you were saying that even in the JV, the map-making part, right, the development of maps would be outsourced to MapmyIndia, right? So are we already seeing the cost coming for this in our business for which in future, we would get the revenues? Or is it still too early?

Let me clarify. One country, they have outsourced to us, okay? The other countries, it is better that the local players of those countries who are getting wiped out by the big giant, they have gotten a new life, okay? And they are being nurtured by the JV to make the maps good. And how they are being nurtured by JV? MapmyIndia is providing them with certain tools and technologies. That's one side of it. The other side is when they provide that data to the JV, the JV gives it to MapmyIndia to put it in the format so that, that data can be sellable to or licensed to any of the automotive customers, including Hyundai Kia. If it is non-Hyundai Kia, then it will get added to our software, and we will have a further revenue opportunity, one, due to the software part; and the second is when we process the data into a particular -- when I say process the data, productize it, we will also earn certain revenue. So this is the model on which we are operating. But as I said, start expecting it all these for revenue and gradually see how it builds up like if Southeast Asian market is as big as India market, India market, we have been working for last 10 years, and we have gone up similar -- not 10 years, but similarly, it will take ramp-up of 2, 3 years, I suspect, where the full advantage of the TAM that is available in Southeast Asian countries, the JV will be able to achieve.

Understood. That was really helpful. Just the last question, right, how should we think about the growth in the government part of the business? Like if I take 9 months FY '25, what would be the growth in that business vis-à-vis the same period last year?

Which business?

Government business.

Government business. See, we were like a couple of percentage in government business all for many, many years. Last 2, 3 years, we have started increasing. So last year, I think if I remember correctly, it was single digit. Percentage of our total revenue from government was in the single digit. It was in the single digit. This year, we are -- I'm making an advanced -- giving an advanced information that we might be -- definitely we'll be in double digits, but less than 20%.

Less than 15%, so which is up...

20%. Quarter close, maybe I'll know the exact number, but I'm giving some color to it.

And Mr. Verma, again, if I understand it right, with your government business going up, is it fair to assume that your margins -- overall blended margins could be lower because you just -- in one of the earlier questions, you mentioned that your margins should be around 38% to 40% -- 38%, right? So is it fair to assume that as the share of government business goes up, the overall...

Let me answer this question very straightforward. Internally, we are looking at the revenue growth first. That's the first important thing we are focusing on. Second thing we are focusing on, our EBITDA growth. I'm not talking about the margin. I think it will give you a wrong color. And understand, if my EBITDA growth happens, that means my PAT growth happens, and that's what ultimately matters to the company and to its shareholders. So I will strongly suggest that after this financial year, let's focus on, instead of margin, let's focus on the growth of the EBITDA.

[Operator Instructions] The next question is from the line of Ridhima Goyal from Acquaint Bee Ventures.

I have 2 questions. First, I just wanted to know, like earlier, if we see that we have an average growth rate of around 30%, 35%. And now in FY '20 (sic) [ '25 ], we have -- we are targeting around 25%. And going forward also, we are seeing that 25% CAGR is expected. So I want to know like what is exactly happening in the industry? Are we facing any competition? Or like what is happening? Why are we not able to have the earlier run rate of 25%-plus growth rate? And also what is the reason of decline in margins? I know that B2C cost is what we have incurred, and that has resulted in the dent in margin. But since we are going to calibrate this cost going forward, then again, we are targeting for 38%. So what is the reason for the dent in margins also and its target?

Let me first answer you on this margin. Just now I made the statement that starting -- going forward, let's talk -- let's start understanding what is the EBITDA growth and not this margin. Because if we focus on this margin, my revenue growth will get adversely impacted. Any one of you, and I'm sure all of you understand that, if the revenue growth happens with that kind of EBITDA margin, then it's like you are living in a different world. So you are talking about the competition and all that. Yes, competition is there all across. How can we operate without competition? Even in maps, in certain parts of maps, we do have competition from Google. Our job is to try to get that business from them, snatch that business from them and bring it to us. In government also, there are many companies who are bidding and who are trying to get and they are also growing. So every business vertical will have a different kind of margin. The company's objective is how to keep increasing the revenue growth. Answering your first part of the question about that 35%, 40% growth in the revenue, well, we never said 35%, 40%. I don't remember ever saying it. What we have said was INR 1,000 crores revenue in FY '28. Some people like you might have done some reverse calculation and come to the conclusion that 35% is required. I don't know how it was computed. The last 2 years, we did achieve around 30%, 35% growth. So we are targeting INR 1,000 crores, and I'll continue saying that, that INR 1,000 crores is our target for FY '28.

Yes, sir. Actually, just the reason we wanted to know is why the growth rate has slowed down. I understand that you have a target of INR 1,000 crores by FY '28, but we were growing at 30%, 35%, and just reaching to 25% growth rate is a concern or maybe just we wanted to know the reason behind that.

Anyway, another way to understand is from a lower base, the percentage can be higher. From a higher base, the percentage is lower. I think there are several ways to look at it.

Got it. And sir, second question is, so I wanted to understand on this Hyundai Kia contract. So since you said that we have 5-years contract, I wanted to know like how does it work? Like every year, if you -- if, for example, Kia makes 100 vehicles, your maps are being installed on all of those 100 vehicles. Then in second year, if they again manufacture 80 vehicles, then that is your 80 maps are being installed. And how does it work? Like what happens post 5 years? So are the vehicles installed per the unit? Or will there will be the renewal of your -- the mapping thing? Or like post that, you will have a different contract of new vehicles being manufactured. And the ASP of INR 800 includes the installation part? Or does it include your -- the renewal also?

Okay. I'll take that question. It's based -- it's clearly -- our contracts are based on the number of vehicles produced or the program for which we have signed the contract. And under one program, there could be multiple make and models of the vehicle that would fall in. So like you had said, all vehicles, but that would be different for different OEMs. Our contract terms, conditions could be limited to specific module programs also. Now our contract -- every contract would be different from the perspective of the number of years and the renewal strategy. But typically, we sign -- our licensing term is for 3 to 5 years. And post that, there is a renewal, which is an option to the OEM and to the end customer as well. So they can get the plan renewed at a certain cost [ from our experience ].

Okay. Got it. And just a request, will it be possible for you guys to give more granular detail on your segment-wise, like what is the variable and fixed contract mix? And in variable, like what is -- like for A&M, what would be the number of vehicles which are being -- we are installing our maps on a quarterly basis? So it will give us more clear picture to track the KPIs of your business. Otherwise, it would be very difficult for us to predict what is going to happen in the next quarter.

Here, the number of vehicles towards number of lines...

Clearly, we have said -- but just now, but still to help you all, I did mention that we had a 23% growth in the number of licenses...

As compared to the last year.

Last year and for the 9 months. So if you have that number last year, so you can compare that and say 20% growth has happened.

And the way [ vehicles are made, I think ].

Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to the management for closing comments.

Well, thank you all for listening to us patiently. All that I can say is that we are on track. We are -- we have a great team here to deliver what we talk about. So let's hope that you also have confidence in us the way we have confidence internally. Thank you so much.

Thank you. On behalf of Anand Rathi Shares and Stock Brokers Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

Thank you.