MapmyIndia share's 11% fall today has links with Google Maps. Explained

MapmyIndia shares fall 11% today: According to reports, Google has announced its decision to slash the pricing of Google Maps Platform by as much as 70 per cent from August 1, 2024

Why are MapMyIndia (CE Info System) shares falling: Share price of CE Info Systems-owned MapMyIndia declined 10.6 per cent to Rs 2,217 per share on the BSE in Thursday's intraday trade. The drop in share price came amid reports that Google has slashed the price of Google Maps Platform for Indian developers, which may affect MapMyIndia's navigation app 'MappIs'.

According to reports, Google has announced its decision to slash the pricing of Google Maps Platform by as much as 70 per cent from August 1, 2024.

Besides, Google will also likely partner with Open Network for Digital Commerce (ONDC) to offer additional discounts for developers building for ONDC for a limited period.

 

"This will result in up to 90 per cent discount on select Google Maps Platform APIs that are used to drive ecommerce and adjacent use cases," Google reportedly said.

According to the US-based tech giant, the price reduction will make Google Maps Platform more accessible for developers to build location-based solutions in the country.

At 12:31 PM, Maps My India was trading 7.3 per cent lower at Rs 2,298 per share as against 0.11 per cent rise in the benchmark BSE Sensex.

Mappls is one of the offerings of MapMyIndia, which includes mapping data, solutions for businesses, navigation systems for cars, APIs or application programming layer to work with platforms such as Alexa, AI tools and analytics.

MappIs is available across Android and iOS and has features like 3D highlight of junction views, speed limit alerts, speed breaker alerts, trip toll, fuel cost estimates, alert for sharp turns ahead, and even potholes.

MapMyIndia, meanwhile, is a technology-based company that offers digital map data, telematics services, location-based SaaS, and GIS AI technologies.

Google Maps' pricing decision comes amid Bhavish Aggarwal, chief executive officer of cab-aggregator Ola, calling to adopt Ola Maps.

Ola Maps' uses Bhavish Aggarwal's artificial intelligence (AI) startup Krutrim for mapping and location-based services for developers. This was launched in May this year.  Ola Cabs has also completely exited Google Maps and moved to its in-house Ola Maps.

MapmyIndia Annual Report

According to the company's Annual Report, Mappls App became the top app in the app store in the second half of 2023. The app has crossed over 20 million lifetime downloads, a majority of which occurred during FY23-24.

Overall, the company generated total revenue of Rs 417.6 crore in FY24, up 32 per cent Y-o-Y over FY23. The operating profit (Ebitda) was Rs 156.2 crore for the year and net profit was Rs 134.4 crore. Both of these grew 33 per cent and 25 per cent Y-o-Y.

CE Info Systems' open order book as of April 1, 2024 stood at Rs 1,372 crore, up 49 per cent over last year.

"We plan to utilise our cash balance (Rs 557.3 crore) to continue optimising our operating model, reward our loyal shareholders as well as focus on growing our business into new segments through organic and inorganic expansion. Additionally, our Return on Capital Employed (ex-cash) stands at 105 per cent, a strong indicator of our highly efficient business model that is self-sustaining, allowing us to invest heavily into R&D and product development," said Rakesh Kumar Verma, co-founder, chairman & managing director, CE Info Systems.

Last month, global brokerage Goldman Sachs initiated coverage on the stock with a 'buy' rating with a price target of Rs 2,800.

"CE Info Systems is well-poised to benefit from an early leadership position in fast-growth end markets. The homegrown navigation company enjoys over 80 per cent market share in automotive OEM navigation software. The emerging mobility business is a bigger opportunity set than the core auto business," Goldmans Sachs said.

Given this, Goldman Sachs expects CE Info Systems' revenue to grow at a CAGR of 38 per cent over FY24-FY27, while Ebitda margin may range from 38 per cent to 41 per cent during the period.