An Indian navigation company’s stock, which was endorsed by Mark Mobius, has doubled in value over the past six months as its mapping service gains prominence in the country, challenging Alphabet Inc.’s Google Maps. However, analysts and investors are divided on the trajectory of this remarkable surge.
Shares of MapmyIndia, previously known as CE Info Systems Ltd., have surged by approximately 104% since the end of March, accumulating a market value increase of about $675 million due to the escalating demand for its consumer-focused app, Mappls. While some foresee substantial domestic growth opportunities for the company, others consider its current valuation to be overextended.
“The valuations look really stretched now,” remarked Piyush Pandey, a technology analyst at Yes Securities India Ltd. “I anticipate the stock will enter a consolidation phase.”
MapmyIndia’s roots trace back to the visionary husband-and-wife team, Rakesh and Rashmi Verma, who embarked on the mission to chart digital maps of India long before Google revolutionized web cartography. Their son, Rohan Verma, a Stanford-educated electrical engineer, now serves as the company’s CEO.
The company’s primary revenue source stems from providing mapping services to notable businesses such as Apple Inc., BMW AG, and Amazon.com Inc.
Mark Mobius identified the stock as one of his top picks in India in a June interview with Bloomberg, citing the company’s anticipated benefits from the digitization of the country. Mobius Capital Partners LLP holds a 0.74% stake in the company, having initially invested in January and subsequently increased its holdings over the following months.
Despite the surge, the stock currently trades at approximately 65 times its estimated earnings for the next 12 months, compared to roughly 21 times for the S&P BSE 500 Index. It did experience an 8.5% pullback from its record high on October 6.
Nevertheless, Shobit Singhal, the lead internet stocks analyst at Anand Rathi Institutional Broking Ltd., maintains an optimistic outlook. He foresees the company’s sales growing at a rate of 35% to 40% annually for the next 3 to 5 years, emphasizing that there are no listed peers in such a vast domestic market. He contends that such growth, coupled with a management team boasting a strong pedigree, justifies a premium valuation.
The company is actively investing in in-house drone technologies and is exploring the acquisition of drone-related businesses. CEO Rohan Verma highlighted MapmyIndia’s international expansion efforts in response to client demand, a majority of which are multinational corporations.
“We aim to be a comprehensive drones provider,” he affirmed. “With our expertise in navigation, it’s now time to broaden the scope of its applications.”
