Shares of MapMyIndia’s parent company, C.E. Info Systems, saw a significant drop on November 11, with stock prices tumbling over 8% on the NSE. This decline came after the company reported a consolidated net profit decrease of 8.2% year-on-year (YoY) to Rs 30.33 crore for Q2, ending on September 30, 2024. The disappointing earnings have prompted brokerage firm Centrum Broking to downgrade its target price for MapMyIndia from Rs 2,291 to Rs 2,097, maintaining a ‘Reduce’ rating on the stock.
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MapMyIndia Q2 Results
MapMyIndia’s financial performance in Q2 revealed mixed results:
- Net Profit: Down 8.2% YoY to Rs 30.33 crore.
- Revenue: Up 14% YoY to Rs 103.67 crore.
- EBITDA: Declined by 7.5% YoY to Rs 37.5 crore.
- EBITDA Margin: Dropped from 44.5% to 36.1%.
Despite the revenue increase, profit margins tightened as costs increased, impacting both EBITDA and net profit. The reduced EBITDA margin, from 44.5% to 36.1%, has raised concerns about the company’s operational efficiency amid rising competition.
Joint Venture with Hyundai Autoever Approved
In a strategic move, MapMyIndia’s board has approved a joint venture (JV) with Hyundai Autoever, a Hyundai Kia subsidiary. This JV, named PT Terra Link Technologies, will be headquartered in Indonesia, with MapMyIndia holding a 40% stake and investing $4 million. The JV aims to provide map-based solutions to automotive original equipment manufacturers (OEMs) and other industries across Southeast Asia, projecting multimillion-dollar revenue within the next five years. The first orders and revenue streams are expected by FY26, which could bring significant business growth opportunities for MapMyIndia.
Centrum Broking Downgrades MapMyIndia Target Price
The Q2 financial report led Centrum Broking to cut MapMyIndia’s target price from Rs 2,291 to Rs 2,097, while reaffirming its ‘Reduce’ rating. The brokerage’s cautious stance highlights concerns about the profitability decline and tighter margins. MapMyIndia’s stock was trading at Rs 1,912.80 as of 11:36 am on November 11, down nearly 7% for the day and lagging behind the broader market index.
Stock Performance
MapMyIndia’s stock performance has been lackluster this year, with the stock down nearly 1%, contrasting with the Nifty index’s 10% growth. Over the past 12 months, MapMyIndia shares have declined 10%, while the Nifty has risen by 25% in the same period, indicating underperformance in a competitive market.
Outlook
While MapMyIndia’s Q2 results highlight challenges in maintaining profit margins, the joint venture with Hyundai Autoever could serve as a positive catalyst in the long term. Investors, however, are advised to stay cautious as MapMyIndia navigates through rising operational costs and evolving market dynamics.