Proxy play on Data Analytics growth! …
About stock: Latent View Analytics (Latent View) is a leading pure-play data analytics services company in India. It provides expertise on the entire value chain of data analytics from data and analytics consulting to business analytics and insights, advanced predictive analytics, data engineering and digital solutions.
• It engages to provide services in technology, BFSI, Consumer Packaged Goods (CPG) & retail, industrials and other industries
• Caters to 30+ Fortune 500 clients with key clients incl. Adobe, Uber & 7-Eleven
Investment Rationale
• Expertise in Data & Analytics (D&A) unlocks significant opportunity: The company has a distinct positioning in digital solution accelerators, big data capabilities, social media predictive analytics and advanced analytics tools. The management anticipates data, analytics & AI services market to grow up to $165 bn by 2026. This is supported by the finding that the global data analytics outsourcing market, valued at $9.24 billion in 2023, is expected to grow at a 32.1% CAGR through 2030. Moreover, D&A shall become the centrepiece of enterprise strategy, focus and investment thereby unlocking various opportunities for the company. Thus, we believe such industry tailwinds position Latent View well for sustained revenue growth.
• Decision Point acquisition to fuel future growth: The company has acquired Decision Point to strengthen its CPG/Retail muscle particularly for revenue growth management (RGM) services, expanding its GenAI offerings and its market reach in LATAM and APAC region. It brings in marquee logos including 5+ global giants through which it aims to grow CPG practice by ~200%.
• Healthy revenue & margin growth ahead: Latent View has exhibited decent revenue expansion, growing by 54.3% since its year of listing, driven by strong organic growth initiatives. The company aims to achieve revenues of $100- 105 mn by FY25 (assuming full-year Decision Point consolidation) and $200-220 mn by FY27-28. We have baked in revenue CAGR of ~36% over FY24-27E. We estimate EBITDA CAGR of 42.5% over FY24-27E. Consistent client-driven innovation supported by functional expertise ensure revenue growth and margin stability for the company.
Rating and Target Price
• Given the opportunity from the D&A offerings and Decision Point acquisition driving topline and earnings growth visibility, we initiate coverage with a BUY rating.
• We assign a target price of ₹610, valuing it at 36x FY27E EPS, with a premium target multiple given the superior earnings growth ahead.
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