Navigating Growth: CE Info Systems and Genesys International’s Rise Amidst Regulatory and Technological Waves
Geospatial companies, including CE Info Systems and Genesys International, are experiencing a surge in market interest, driven by expansion initiatives. The evolving regulatory landscape and technological advancements are positioning Indian mapping firms for sustained growth, potentially outshining their global counterparts like Google Maps.
Mark Mobius’ Confidence in MapMyIndia’s Trajectory
Renowned emerging markets expert Mark Mobius has long championed CE Info Systems, the driving force behind MapMyIndia. Mobius, in a recent LinkedIn post, commended the company’s remarkable contributions to mapping and location technology.
Established in 1995 by Rakesh and Rashmi Verma, MapMyIndia has meticulously mapped the entire Indian landscape over the years. In the fiscal year 2022-23, the company witnessed a robust 31 percent year-on-year growth in its order book. Notably, MapMyIndia approved a qualified institutional placement (QIP) to raise up to Rs 500 crore, signaling its strategic intent to expand its geo-tech division.
Meanwhile, Genesys International, based in Mumbai, collaborated with the Survey of India, a venerable mapping institution, to create digital twins of major Indian cities and towns. The stocks of both MapMyIndia and Genesys International have experienced notable upswings, with MapMyIndia soaring over 23 percent and Genesys International surging by 10 percent in the past month.
Geospatial Policy: Catalyst for Mapping Stocks
Vinit Bolinjkar, Head of Research at Ventura Securities, identifies MapMyIndia and Genesys International as prime beneficiaries of India’s recently introduced geospatial policy (December 2022). This policy aims to establish a national geospatial data framework, fostering data accessibility for businesses and the public. By 2025, the government envisions a legal framework supporting the liberalization of the geospatial sector.
Regulatory Advantages Favoring Indian Mapping Companies
In addition to the new geospatial policy, analysts point to regulatory requirements favoring Indian entities over foreign players. Certain geospatial data specifications, crucial for accurate mapping, are mandated to be owned by Indian companies. Foreign entities must obtain licenses from Indian players to cater to the Indian market.
Even industry giant Google faced challenges, taking over a decade to relaunch Street View in collaboration with local firms, including Genesys International and Tech Mahindra. Specific mapping activities are exclusively reserved for Indian entities, providing MapMyIndia and Genesys with a regulatory edge over global competitors like Google Maps.
Business Moat Analysis: MapMyIndia and Genesys International
MapMyIndia, with nearly three decades of experience, pioneered digital mapping in India before the era of Google Maps. The company, with over 250 new customers, expanded its customer base to over 850 on MaaS, SaaS, and PaaS platforms in FY23. Key clientele includes ISRO, Ministry of Electronics, Ministry of IT, and Ministry of Road Transport and Highways.
Genesys International, based in Mumbai, boasts a team of over 2,000 professionals providing advanced mapping, survey, and geospatial services. Financially, MapMyIndia’s topline has grown at a 20 percent compound rate over three years, while Genesys International’s topline has grown at a 17 percent compound rate during the same period. MapMyIndia’s bottom line has compounded by 72 percent, and Genesys International’s by 67 percent.
Investment Rationale: Caution Meets Opportunity
Analysts caution investors about the mixed trends in the valuations of both MapMyIndia and Genesys International. Sonam Srivastava from Wright Research suggests considering market volatility, technological disruptions, and competitive dynamics as potential risks.
MapMyIndia’s strategic alliances with key government organizations contribute to its premium valuations. At the current market price of Rs 2,179 per share, it trades at TTM EV/EBITDA of 69x and FY25 EV/EBITDA of 53.4x, with a recommendation to accumulate on market dips.
Genesys International’s recent collaboration with the Survey of India has brought optimism to its stock. At the current market price of Rs 363 per share, Genesys trades at TTM EV/EBITDA of 25.7x, offering potential for re-rating. Investors are encouraged to explore opportunities in this evolving sector, mindful of the inherent risks.
