Hold Latent View Analytics: target of Rs 210: ICICI Securities

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • Diversification of revenue mix: Latent View Analytics is expanding in areas like Industrials, BFSI, and CPG & Retail to reduce dependence on the technology vertical.
  • Growth in Industrials: The company has seen strong growth in Industrials, led by auto and auto-component clients, with a new logo win via the Databricks partnership.
  • Partnerships and AI deal wins: Latent View has partnered with companies like Databricks, Snowflake, and Anthropic, and has seen AI deal wins, including an USD 800K+ agentic AI engagement with an apparel manufacturer.
  • Leadership hiring and account mining: The company has hired new leaders, including a head of Europe & UKI for Consumer Ecosystem, and is focusing on account mining to move accounts up a 'pyramid' toward larger, multi-year annuity deals.

Thesis Validation Checklist

To validate the investment thesis, investors should watch for:

  • Diversification of vertical mix: A reduction in dependence on the technology vertical and growth in other areas like Industrials, BFSI, and CPG & Retail.
  • Pickup in growth in technology verticals: An improvement in the technology vertical, led by expansion in non-top tech clients, which could lower client concentration.
  • Reduction in project-based work in CPG sub-segment: A decrease in the project-based nature of work in the CPG sub-segment, which could lead to more annuity-type growth.
  • Expansion in EBITDA margins: An increase in EBITDA margins beyond the guided range of 21-22%, driven by premium AI work and cost rationalization.