Digital map services: Poised for a strong growth
Published by Sharekhan Education | October 31, 2022
Digital map services: Poised for a strong growth
Amit Pathak | Sharekhan Education
Digital maps accurately represent a particular geographical area, detailing major roads and other points of interest. They are validated and enhanced through automated and manual feedback loops. They rely upon a vast amount of data collected over time. Digital map information is the culmination of satellite imagery and street-level information. Digital maps services are a multi‐billion-dollar opportunity. The market for the digital map is estimated to grow at 15.5% CAGR in India from $4.1bn to $7.7bn over FY21‐25E.
Digital Map Services:
Digital map services include analyzing & utilizing map data in several ways. In an increasingly connected world, the automotive, enterprise, and government sectors actively use digital maps. Product offerings in the automotive segment include providing navigation solutions for automobiles, fleet monitoring & tracking solutions, route optimization solutions, etc. The improvement in self-driving technology would provide fillip dependence on mapping solutions. Remote sensing and image analytics are extensively used to determine site suitability and for pre-project planning.
Use cases in the Consumer Tech segment include maps for sales‐force monitoring, last-mile delivery tracking, and providing a better location‐based end-consumer experience for social media apps. The Indian government is also increasingly using mapping services for several unique use cases, including land record digitization, wildlife management, crime mapping & analytics, Disaster management, etc. Sunrise sectors such as drones, agriculture, insurance, and healthcare would have wider adoption of mapping services.
The New Geospatial Policy allows all Indian companies to freely acquire, collect, prepare and disseminate geospatial data within India without approval. The regulation restricts foreign companies from granular mapping (one-meter horizontal and three-meter vertical threshold), creating 360-degree street views & terrestrial surveys, and using foreign company servers to pass such data. These regulations limit the accuracy of HD maps and hinder the updating of existing maps, creating entry barriers for global competitors. It gives Indian companies a clear regulatory advantage over foreign global giants like Google Maps.
About ‘MapmyIndia’
We have a positive outlook on ‘MapmyIndia’ in this space. The company enjoys an 80% +market share in automobile navigation systems. It is a beneficiary of the Indian Government’s push towards an “Atmanirbhar Bharat.” The company has mapped 10.54 million unique destinations with 2D and 3D landmarks covering 98.5% of the road network. It has built a strong moat by capitalizing on its early-mover advantage, creating a detailed mapping universe that is difficult to replicate, and developing proprietary technologies. We expect MapMyIndia’s revenues/EBITDA/PAT to grow at 34%/37%/30%, respectively, over FY22‐25E.
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