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  • Nov 22, 2023 - This Stock is the Nerve Centre of India's AI Revolution

This Stock is the Nerve Centre of India's AI Revolution podcast

Nov 22, 2023

In 1999, Pakistani troops took secret positions in Kargil. To find them, the Indian military sought the global positioning system data for the region.

At that time, the space-based navigation system called GPS was maintained by the US government. The US denied India some vital information regarding the positioning to India.

India's need for an indigenous satellite navigation system was felt earlier, but the Kargil experience made India realise its importance.

Amid increasingly shifting geopolitical realities, it is even more crucial for India to be self-reliant in satellite navigation today.

Here is how ISRO is helping...

In 1999, Pakistani troops took secret positions in Kargil. To find them, the Indian military sought the global positioning system data for the region.

At that time, the space-based navigation system called GPS (Global Positioning System) was maintained by the US government. The US denied India some vital information regarding the positioning to India.

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India's need for an indigenous satellite navigation system was felt earlier, but the Kargil experience made India realise its importance.

Amid increasingly shifting geopolitical realities, it is even more crucial for India to be self-reliant in satellite navigation today.

It is not just important in war, where satellite navigation helps. Yes, the GPS does track enemy location and movement as well as guide precision weapons. But a homegrown, secure GPS technology helps the economy in a significant way.

ISRO's NavIC - Answer to GPS

NavIC is a navigation system recently developed by the Indian Space Research Organisation (ISRO). It operates on similar principles and functions akin to the GPS.

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The key difference is that GPS is owned and operated by the United States, whereas NavIC is owned and operated in India.

Devices that receive and interpret NavIC (Navigation with Indian Constellation) signals must come equipped with compatible microchips. These components are built to handle the signals beamed down by the Indian satellites.

Being a regional navigation system, NavIC offers more accurate and comprehensive coverage of the Indian geography. So far, the system is dependant on the imagery from seven satellites but this infrastructure is set to expand.

Google's Envy, NavIC's Pride

Globally Google Maps is the default GPS software.

So, Google supports direct integration of Google Maps in automotive systems. However, the technology has seen roadblocks from Google's American competitors.

Naturally, car manufacturers are wary of sharing too much data with Google. Because the latter is their competitor in autonomous driving.

Similarly, Apple would not use Google Maps data to power it's iOS mapping product. Amazon also directly competes with Google in the advertising space. So it would not like to share information with a competitor.

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Thirdly, companies in the customer experience businesses are reluctant to share data with Google. Especially since Google competes with them in many different fields. For example, fintech company such as PhonePe would prefer not to share data with the parent company of its competitor - Google Pay.

That makes an independent company with technology similar to GPS extremely relevant in the Indian tech ecosystem.

This company has tied up with ISRO to incorporate the NavIC technology in Indian tech ecosystem.

Since the company does not directly compete with its clients in other businesses, not just Indian but even American companies are more willing to incorporate the software in their devices.

Further, in September 2023, India made it mandatory for both smartphone and automakers to use NavIC by December 2025.

Smartphone maker Apple has already agreed to incorporate NavIC, in its latest iPhone 15 smartphones.

Plus, NavIC could present new use cases for navigation-based gaming apps.

It can also help auto insurance companies to track vehicles they have mortgaged.

Advertising companies could develop better location-sensitive advertisements.

The travel and tourism industry can create location-based use cases by making the tour more informative and interactive.

NavIC will also help India's drone industry grow and become more efficient, especially in drone delivery businesses.

Age of AI

Satellite navigation systems like NavIC are not just about mapping. They are also about leveraging AI to offer users more intelligent inputs.

AI-enabled systems in vehicles, for instance, are able to anticipate and make suggestions for optimal routes and destinations. AI-enabled systems can also be used to find the best gas prices and restaurants in the area.

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Overall, AI is transforming the way we use satellite navigation systems.

Now, how can you as an investor profit from this trend?

The Indian company that has the first mover advantage in offering the Indian satellite navigation system NavIC, is all set to profit immensely from India's AI revolution.

It is none other than C.E. Info Systems...commonly known as MapMyIndia.

The company has a suite of digital maps and Software as a service, Platform as a service, Application Programming Interface based products.

It offers them as solutions in the areas of location intelligence, geospatial analytics, geographic information systems (GIS), digital automation and AI.

MapMyIndia sells IoT products and SaaS to vehicle and fleet owners, operators through its latest acquisition Gtropy. Gtropy provides transporters and logistics companies with route optimization, vehicle tracking and other solutions.

In its PaaS offering, the company provides 2D and 3D visual and voice-based navigation platforms that are interactive and capable of outdoor and indoor map rendering.

Through its Maps as a service offering it provides its proprietary, end-to-end technology-driven, and AI-assisted mapping systems and processes maps across India.

Its advanced maps represent the real world in 2D and 3D and are standard definition as well as HD, providing photo-realistic virtual reality (VR) and augmented reality (AR) ready maps of the outdoors and indoors, including geo-referenced 360-degree panoramas.

It also provides a full-stack suite of APIs and solutions to consumer technology companies and enterprises, such as banks and financial institutions, travel companies etc.

During the financial year 2022, C.E Info Systems had over 600 customers across platforms.

Its customers are spread across industry segments such as BFSI, telecom, FMCG, industrials, logistics and transportation, and key government organisations.

Some of them include PhonePe, Flipkart, Yulu, HDFC Bank, Airtel, Hyundai, MG Motor, Avis, Safexpress and Goods and Service Tax Network (GSTN).

Of course, MapMyIndia is not the eonly Indian entity to profit from ISRO's homegrown technology but it definitely has a first mover advantage. Plus, the Indian government's push towards Make in India gives MapmyIndia a distinct advantage in winning government contracts.

The government has levied increasingly strict regulations on international mapping players, with a clear preference towards developing indigenous technology in sensitive areas such as geospatial mapping services, giving an advantage to domestic players like MapmyIndia.

The government's recent push to compulsorily integrate NaVIC support along with GPS for Indian smartphones is another example of India's increasing focus on indigenous technology.

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MapmyIndia is the only credible domestic player in the mapping space and stands to benefit from such a push.

This is not a recommendation on the stock. So please make sure you conduct the necessary diligence on the financials and valuations of the company before acting on it.

Hope you like this video. Thanks for watching.

Tanushree Banerjee

Tanushree Banerjee (Research Analyst), is the editor of Stock Select and Forever Stocks. Tanushree started her career at Equitymaster covering the banking and financial sector stocks and scrutinising RBI policies. Over the last decade, she developed Equitymaster's research processes that helped us pick out various multibaggers, across all sectors. A firm believer of "safety first" when it comes to investing, Tanushree closely follows the investing philosophies of Warren Buffett, Jeremy Grantham, and Joel Greenblatt.

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1 Responses to "This Stock is the Nerve Centre of India's AI Revolution"

Gautam Bhaisare

Nov 22, 2023

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