MapMyIndia shares jump 20%, hit upper circuit; what's driving the rally?

Shares of CE Info Systems Ltd., the owner of MapmyIndia, hit a 20 percent upper circuit on Thursday's trading session after Goldman Sachs began coverage with a 'buy' rating and a price target of ₹2,800, indicating a potential 40 percent upside from the stock's last closing price.

Goldman Sachs believes that CE Info Systems is well-positioned to capitalize on its early leadership in rapidly growing markets. The domestic navigation company holds over 80 percent of the market share in automotive OEM navigation software.

The research firm also noted that the emerging mobility business presents a larger opportunity than the core automotive business.

The corporate and government markets offer significant growth opportunities for the company. Additionally, the auto and mobility (A&M) segments are well-positioned to benefit from trends towards premiumization and electrification, according to Goldman Sachs.

The brokerage firm forecasts a 38 per cent compound annual growth rate (CAGR) in revenue for CE Info Systems from the financial year 2024 to 2027, with a consistent EBITDA margin between 38 per cent and 41 per cent.

For the quarter ending March 2024, CE Info Systems reported a 36 percent year-on-year increase in net profit, reaching ₹37.94 crore. The company's revenue surged by 46 percent YoY to ₹106.90 crore.

EBITDA grew by 36 percent YoY to ₹39.5 crore. The order book expanded by nearly 50 percent, totaling ₹1,364 crore, driven by ₹825 crore in Annual New Order Bookings for FY24.

CE Info Systems stock closed at ₹2,409.65 on Thursday, against previous close at ₹2,008.05 on Wednesday. Over the past year, the stock has soared by 104 per cent, effectively doubling investors' money. In contrast, the Nifty index increased by approximately 25 per cent over the same period.