CE Info Systems - Map-Led Business Recovering, H2 Appears Better Than H1; Maintain BUY

CE Info Systems (MapMyIndia) revenue grew by ~15.8% y/y in Q2FY27 to ~Rs1.3bn (in line with our estimate and ~4% lower than street estimates. Map-led business grew by 22.3% y/y to ~Rs767mn (~58.2% of revenue) with ~41.6% margin (vs. ~35.4% in Q2FY26). IoT-led business grew ~7.83% y/y to ~Rs551m (~41.8% of revenue) with ~23.8% margin (vs. ~11.5% in Q2FY26). EBITDA grew 60% y/y to ~Rs450mn with EBITDA margin expanding by ~943 bps y/y to ~34.1% vs. ~24.7% in Q2FY26 (broadly in line with street estimates), due to higher contribution from Automotive and Enterprise. The management expects better H2, due to low YoY base and strong order execution, keeping the margin guidance at >35% for FY27e (vs. ~37.2% margin in H1). Broadly, maintaining our estimates, we reiterate BUY rating on the stock with an unrevised TP of Rs1,500, valuing it at 40x FY28e earnings.

Segmental Performance: Automotive segment grew ~52% to ~Rs 13m (~54.1% of revenue), driven by momentum across both Map-led and IoT-led mobility solutions. Enterprise segment grew ~44.1% to ~Rs330mn (~25% of revenue), supported by multiple wins and go-lives across sub-verticals. Government segment declined by ~37.5% to ~Rs275mn (~20.9% of revenue) due to one-off revenue win last year. Cash & Equivalent stood at ~Rs7.3mn as of Q2FY27 vs. (Rs7.45bn in Q1FY27 and Rs6.85bn in FY26). FCF stood at ~Rs497.8mn in H1FY27 vs. Rs277.1mn in H1FY26.

IoT Biz Growing Strong with Margin Expansion: In FY26, IoT business grew by ~34.7% y/y to ~Rs1.59bn, led by ~66% y/y growth in SaaS revenue, whereas hardware sales fell by ~2% y/y with margin improving to ~16% in FY26 from 14.3% in FY25. In H1FY27, IoT business grew by ~29.1% y/y, led by ~2.7x y/y growth in hardware business, primarily reflecting capex-based sale as part of a line-fit programme with a new OEM entrant. SaaS revenue declined by ~26% y/y due to transition of a large government IoT project, which had generated upfront technical services revenue to a recurring subscription model. EBITDA margin also improved to ~19.2% from 10.6% in H1FY26, due to better margin solutions across hardware and SaaS.

Strong Order Book Provides Revenue Visibility: The company ended FY26 with a record open order book of ~Rs17.5bn (up ~17% y/y), and a healthy order pipeline. The primary challenge now is execution and revenue conversion rather than generating new business. The mix of fixed-price contracts (~64.9% of total order book) continues to rise, improving revenue visibility and reducing dependence on customer production volume, which should result in more earnings predictability over the long-term.

Outlook and Valuation: As strong open order book provides revenue visibility for forward years, we expect the company’s revenue to clock ~21.1% CAGR over FY26-28e, with ~23.5/22% CAGR in EBITDA/PAT over the same period. We maintain BUY rating on the stock with an unrevised TP of Rs1,500, valuing it at 40x FY28e earnings.

Key Risks: (a) Pricing pressure from large global mappers; (b) non-renewal of OEM contracts; and (c) slower execution.