Buy Latent View Analytics; target of Rs 270: Prabhudas Lilladher

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • Segment growth: Industrials segment growth of 21.4% QoQ, driven by expansion in automotive and auto-component clients, while Tech segment remains subdued due to client consolidation and budget rationalization.
  • Cost rationalization: Margin expansion supported by GTM and marketing cost rationalization, which more than offset the impact of higher bench and wage costs.
  • Medium-term margin aspiration: Management reiterated its 21-22% medium-term margin aspiration, while continuing to invest in AI and Databricks capabilities.
  • Revenue guidance: Guided USD 127mn in revenues for FY27, translating to 6% organic growth.

Thesis Validation Checklist

  • Tech segment recovery: Monitor the recovery of the Tech segment, which is expected to be driven by deeper account mining, new client additions, partnerships, and acquisitions.
  • Margin expansion: Track the company's ability to maintain its medium-term margin aspiration, despite higher wage costs and investment in AI capabilities.
  • Revenue growth: Monitor the company's revenue growth, particularly in the Industrials and FS segments, to ensure it is in line with guidance.
  • Client consolidation: Keep an eye on client consolidation and budget rationalization, which could impact the Tech segment's growth.