Ceinsys Tech: The Geospatial Rising Star

Polluted rivers have been a perennial issue for India. This is further exacerbated by the lack of potable water across the country. The treatment of sewage flowing into the rivers is not efficient, or might be lacking in a number of places. As a result, the Indian government had launched the Jal Jeevan mission in 2019 to provide tap water to every rural household by 2024, which has now been extended till 2028. Due to a lack of potable water, people in cities have to either dig their own borewells or rely on purifiers, which come with their own set of costs and health issues. 

The Government of India also launched the State Water and Sanitation Mission in 1999 in each state to provide clean water to the people. Together, these missions aim to provide clear water for the Indian populace. You might be wondering why we would discuss this. This is because the company we are discussing, Ceinsys Tech (CS Tech), is among the top companies in water infra mapping and analysis. Companies like CS Tech would collect data on water flow and quality using Geospatial tools and sensors to monitor the same. 

Have you ever used Street View in India to get around in addition to the 2D map? If you haven’t, you don't need to have FOMO because I have never used it. But it's being extensively used in the US and Europe by the population. With Street View providing 3D navigation, it can be easy to spot where you are going. Now you have likely seen Google cars or even bikes mapping the area with a top-mounted camera. This is the first step in the Geospatial industry value chain, where data is collected and it's done by companies like CS Tech.

CS tech is rare in what it does, and has had a long operational history of 27 years, and has seen its name change many times since its inception. The company has tried to be innovative and has taken a leap when required. This culture of adapting to change has helped the company survive and expand over the years. The segments and business models have changed over time, and the company operates two major segments now, which we discuss next.

One of the major divisions of CS Tech is geospatial, where the company deploys tailored geospatial platforms that turn location data into faster, more informed operational decisions. Using Lidar, 3D geometry maps, and other mapping technologies, CS tech is involved in water management, energy, oil and gas, transportation, and telecom. The division keeps track of projects using IoT, such as water management, powerline, pipelines, and smart city assets through edge sensors, SCADA links, and cloud dashboards. Let us first understand how this works for CS Tech and similar companies in the industry:

• Data Collection-Surveying and mapping using Lidar, IoT, photogrammetry, and other tools to map out the areas and collect point and GPS coordinate-based data.
• Data processing and analysis using AI/ML tools. T
• Modelling operational workflow using sensors and tools like SCADA.
• Application in different industries such as water, electricity, urban planning, etc.

• Water Management: The data is used to monitor water sources, track pipeline leaks, and maintain reservoir and wastewater treatment facilities. The company also helps in analysing topography to predict floods and map out evacuation zones in case of actual flooding. The application in water management is a major source of revenue with the Maharashtra and UP governments. 
• Energy: Data collection and analysis help in site selection for exploration for oil & gas, and the optimal place for solar and wind installations. The company helps in monitoring oil, gas, and electrical grids in real-time and provides load Forecasting & Distribution. Environmental impact can be studied by mapping ecological zones for companies in the oil and gas sector. One of the clients includes Maha Vitran, the Maharashtra state discom.
• Mobility: In the case of mobility, the company works on traffic management, in Logistics & Supply Chain to track fleets, schedule deliveries, and optimize warehouse locations, public transport planning, and analyze demand routes, for example, for metro rail projects.
• AEC (Architecture, Engineering & Construction): CS tech works on site analysis and selection,  integration of GIS with Building Information Modeling (BIM) to create 3D map topography and track infrastructure, for example, roads, for timely repairs. Relevant clients include NHAI and L&T.

The tech solution segment grew inorganically as a result of the acquisition of AllyGrow Technologies, a specialized engineering service provider,  in FY22, which has an international presence across the US, Europe, and the UK. The company provides manufacturing solutions spanning the entire manufacturing cycle for industries in the automobile sector, including 2-wheelers/3-wheelers, cars, and off-road construction equipment. CS tech provides companies in these sectors with product engineering design and validation, industrial automation solutions, and the integration of advanced technologies. The major solutions can be clubbed into:

• Product engineering- engineering seating feasibility checks, surface checks, Engineering Design, CAD modeling, etc.
• Industrial Automation- tech solutions for plant layout, androbotic (remember RoboCop) automation, simulation, and tooling development, providing layout design, assembly process, and process audit.
• Process Competence - It provides EV Mobility Solutions for companies with embedded Hardware and Software solutions.

While we will bore you with financial details later on, CS Tech has been running smooth operations in spite of acquisitions and increasing headcounts. With working capital days decreasing and stabilizing over the past year or so, the stock has been music to the ears of investors. Just like an Opera! Let’s see how.

Here we will discuss major projects being undertaken by the company. Some of the major clients for CS tech are governments in India. The total order book is INR 1,209 Crores as of 30th June 2025. A major portion of this goes to tech solutions in the form of water infrastructure projects from the Maharashtra and UP governments. The company has also been awarded the Maharashtra River Linking Project worth INR 381 crores.

One of the most recent projects includes an INR 16 Cr order from MMRDA for geospatial software upgrade, which further cements the company’s position. A significant amount of projects for the company come from Jal Jeevan Mission, which has been extended till. It is also the reason why the company has nearly 85% of its order book/revenue from water infrastructure.

CS tech is at an inflection point when it comes to organic growth. The company has established a tech division that brings in regular projects. However, of late, it is looking at fruitful acquisitions in the geospatial space. This is helping the company expand outside India. The acquisition of AllyGrow in 2022 and S-based reality-capture firm VTS in 2024 has been successfully integrated. The major focus area of the company in the near future is:

• Geospatial technology & AI analytics GIS
• AI-driven automation and digital transformation solution results
• AllyGrow scaling-up phase, which may result in temporary cost pressures

As of Q3 FY25, the company has raised ₹ 235 crores in funds, of which a major share of 70% is planned to be used to fund acquisitions. 

The company is growing, and an increasing headcount is a testimony to the fact. With over 1,300 employees, the company has hired 384 employees over the past year. The high growth rate in employees is an indicator of confidence of the management and the owners in the company. This is further supported by the following indicators, as presented during the concall presentation:

• Average Age of Employees - 34 years.
• Low Attrition - 1% (year 2024-25).
• Well-qualified Team: 82% Engrs, PhD, M.Tech, MS, and 18%-ITI-Diploma holders.

Of the recent hires, the majority (277) are tech hires for geospatial and AI. This is likely to help the company innovate and fulfill its orders.

What is in store for the company and stock? Roarings or Doldrums!

The company surely seems to be sailing forward to roaring revenues and orders. With tailwinds in favor of CS Tech, investors can forecast some quantifiable targets:

• FY26 Execution Target of ₹550 Cr, which seems within grasp as TTM revenue is already ₹501cr
• Revenue Goal: ₹1,000 Cr within 2-3 years, which can be achieved with the growth rate seen.
• Quarterly Order Pipeline: ₹400-450 Cr
• Bid Success Rate: 85-90%
• Tech Solutions Contribution: ~65% of revenue

The company is in for the long haul, and the next 2-3 years are likely to be stable with political stability. We need to discuss political stability here, as the majority of projects are government contracts. And the general elections, as well as elections in Maharashtra, are beyond a 2-3 year period. UP does go to elections earlier, but is still in the latter half of that period (2027).

We have seen how the company performs well strategically as well as operationally. Before cautioning you on the risks, we would love to talk about numbers. We will not detail the financials too much since the company is seeing large-scale growth and would therefore present only a snapshot.

We use quarterly results to have a better dive into the performance. Some of the key takeaways from the table include:

• Sales growth over the last 12 quarters is 57.1% (QoQ, Annualized).
• The most recent quarter (Q1FY26) saw a jump in revenue of nearly 114% over the previous quarter (Q1FY25).
• The profit has grown 83.67% over the last 12 quarters(QoQ, Annualized).

• The income statement items have seen heavy growth over the last three years, which attests to the robustness of the financials. While the revenue grew 28.10% annualized, the EBITDA grew 55.40% and the Net Income grew 90.10%. This shows that the company is enhancing efficiency with the IS items, seeing a higher and higher growth rate at each stage.
• The Return on Equity (ROE) and the Return on Capital Employed (ROCE) are also seeing good annualized returns over the past three years of 39.6% and 17.2% respectively.

While this is not unusual for a small to mid-cap company, what’s interesting is that the company seems to have maintained this over the past three years and is expected to do so in the next 2-3 years as well, and hopefully beyond that.

The company has its share of risk, and investors need to tread with caution. We will also discuss the mitigating factors. There are risks for a small-cap stock, and we need to address them for an honest opinion formation.

What this means is that a few customers provide CS Tech with the majority of its revenue. The top 10 customers, which are mostly governments, provide CS tech with nearly 55% of its revenues. In addition, the top 10 orders account for 80% of the order book. This means that if the governments change or if the policies change, revenues can be hit significantly. While this cannot be denied but as discussed before, we see political stability ahead, and the fact that the company has been working with the governments for a long period of time should help mitigate the risk.

The Geospatial as well as the IT/ITES industry is highly competitive, with new tech products being released regularly. The company does not need to be only innovative but also needs to stay ahead of the curve by releasing products that are better than everyone else. A new software release can change the game overnight. 

In addition, the government-based contracts are milestone-based based which release payments only after certain goals have been achieved. This needs significant working capital requirements, which is a risk in itself.

We discussed earlier that any policy change from the state government, especially in Maharashtra, can lead to a significant loss of revenue and orders. Receivables can also be impacted if certain milestones are affected by the interpretation of the same by the babus in respective departments.

As per the latest annual report, while bad debts written off have decreased from approximately. 7 crores to 2 crores, doubtful financial assets have increased from 5.6 crores to 8.95 crores. We see this as a cost of business and hope the company reduces this.

The world of investing is chasing alpha, and the small caps and the mid caps have a higher chance of realizing it due to the fact that information disbursal is not as fast in them. This is the opposite of what the efficient market hypothesis predicts, but that is the hypothesis for an ideal world. So how does Ethica do it? Let's see:

• The human form or the analysts at Ethica, which are SEBI registered, have scope for companies available for investing after they have passed the screening. They look at the business model, the industry, the economic growth predictions, and a slew of other factors. Then they analyse the companies based on strategic factors and client base( And of course, financially too!) 
• Using new AI tools, they will look at financials, like a robot would do. These tools will point out any irregularity, which will be studied further to help with investment research. 

Ethica works on a long-term investment thesis, somewhere around 3 years. And CS Tech is a good candidate because, at least for the next three years, the company has a good order book with new orders coming in. It has risks that an investor needs to be cautious of, but the risk-adjusted returns are likely to do justice in the long term.