C.E. Info Systems Limited

C.E. Info Systems reported a 'weak quarter' with 'muted financial performance' for Q3 FY26, primarily due to delayed deliveries to customers. These delays were partly due to customer requests and significantly impacted by government-related projects. Approximately 60-70% of the decline in the C&E business was attributed to government delays, including postponed fiscal grants for national flagship projects and disruptions from urban state elections in Maharashtra and Bihar, pushing revenue recognition into Q4 FY26 and Q1 FY27.

Despite the Q3 challenges, the company's open order book demonstrated robust growth, increasing from INR1,500 crores at the beginning of the fiscal year to INR1,770 crores as of December 31, 2025. This indicates strong future revenue visibility. Gross order bookings for the first nine months of FY26 totaled INR600 crores. Management expressed confidence that the new order book momentum would continue into Q4, with expectations for similar or better closing levels.

The company emphasized its ongoing focus on developing new-age AI-related products, noting that AI elements have been integrated into its products and technology for years. This strategic investment in AI is seen as crucial for future growth and has helped the company mitigate the broader impact seen in the IT sector. Management also highlighted that private sector delays were partly due to customers seeking to ensure AI components in deployed solutions.

The overall revenue mix for the fiscal year is approximately 20% from government business. The Map-led business contributes 60-70% of the overall mix, while the IoT business has seen sharp growth, contributing around 35% of revenue as of 9M FY26. AI-related tools account for the remaining 10%. Management views both Map-led and IoT as independent growth vectors with significant Total Addressable Markets (TAMs), driving diversified growth.

C.E. Info Systems reaffirmed its guidance for a 35% EBITDA margin for the full fiscal year 2026, expressing strong confidence in achieving this target. The company also reiterated its long-term revenue target of INR1,000 crores by FY28, supported by the growing order book. Additionally, new revenue streams from projects with IOCL (approximately INR20 crores) and Survey of India (INR7-8 crores) are anticipated for the next fiscal year (FY27).

The joint venture in Indonesia is currently in a 'build phase,' with MapmyIndia contributing to various countries and partnering with local providers. While the JV is impacting the company's PAT by a couple of crores of operating expense related losses each quarter, management views this as an expected part of the build-out phase, anticipating future contributions in the 'tens of millions' once monetization begins.