Latent View Share – Company Overview:
Latent View share – the company came with Initial Public Offering in November 2021 to raise INR 600 crores fund to feed its expansion plan. The offer of the Latent View share price was INR 197 for each equity share with a face value of INR 1. The offer was subscribed 327 times and was one of the most successful IPO in the Indian market. The Latent View share was listed at a price above INR 500 on its debut in exchanges on 23rd November 2021.
- Learn more about the company below.
- The company was founded in 2006, Headquartered in Princeton, New Jersey, USA.
- Latent View is one of the largest and fastest growing digital analytics firms with a global presence.
- The company’s presence in 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.
- The company offers a 360-degree view of the digital consumer that helps companies to understand their competitors and analyze product trends.
- Eventually, customers/companies will benefit from improving customer retention rates, optimizing investment decisions, and finding out new revenue streams.
- Globally recognized company – receives many awards – 3AI ACME Award 2022 for ‘Top Firms to work for in AI and Analytics in 2022’
- Latent View worked with over 30 Fortune 500 companies in the last three Fiscals years. Some of the key clients include Adobe, Uber Technology, and 7-Eleven.
Latent View share – The company focuses on niche analytics markets
The company offers various analytics services including Predictive Modeling, Marketing Analytics, Big Data Analytics, Advanced Analytics, Web Analytics, Data Science, Data Engineering, Artificial Intelligence, and Machine Learning Applications. Based on the end users, the company’s services can be broadly categorized as follows.
- Technology – that contributes 63.25%
- CPG and Retails – that contributes 9.62%
- Industrials – contributes 17.54%
- BFSI – contributes 9.59% of the total revenue in FY 2021
Based on the scope of work, Latent view offers services in four segments as below.
- Consulting services – include understanding relevant business trends, challenges, and opportunities and preparing a roadmap of data and analytics initiatives that addresses them.
- Data engineering – that is undertaken to design, architect, and implement the data foundation required to undertake analytics.
- Business analytics – that delivers analysis and insights for clients.
- Digital solutions – develop to automate business processes, predict trends, and generate actionable insights.
Latent View Founders and Leadership team
The company is run by experienced Promoters and a qualified senior management team with significant experience in the business.
Mr. Adugudi Viswanathan Venkatraman is one of the promoters, Chairperson, and Director of the Company since its incorporation. He holds a postgraduate diploma in management from IIM Calcutta. Mr. Adugudi also holds a Bachelor of Technology in Civil Engineering from IIT Madras. He has several years of experience in IT services, credit analysis, and business consulting.
Pramadwathi Jandhyala is one of the promoters and directors of the company. She holds a B.E. in Computer Science from BITS Pilani and a postgraduate diploma in management from IIM, Calcutta. Pramadwathi has several years of experience in corporate finance and credit ratings.
Mr. Rajan Sethuraman, aged 50 years, is the Chief Executive Officer of the Company. He is associated with the company since March 21, 2016. Mr. Rajan holds a bachelor’s degree in Engineering from the Birla Institute of Technology and Science, Pilani, and a Post Graduate Diploma in Management from the Indian Institute of Management Calcutta. He has over 13 years of consulting experience, working with Accenture and KPMG.
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Latent View Share – Revenue and profits
The total income for the June quarter ended June 30, 2022, is INR 1297.38 million. The total income of the company grew over 40% YoY from INR 917.43 million in the June quarter of 2021 to INR 1297.38 million in the quarter that ended June 30, 2022. Profit after tax (PAT) also grew by over 40% during the same period. Revenue from operations of INR 1,199 million in Q1 FY23 with the majority of revenue generated from long-term agreements.
As per the latest investor presentation, the company’s income has grown from INR 2879 million in FY 2019 to INR 4082 million in FY 2022. However, the PAT margin has gone up from 20% to 30% during the same time. The company witnesses strong cash generation with a net cash flow from operations of INR 874 million in FY22. The most important part of this business is low Capital Requirement with capital expenditure equivalent to 1.6% of revenue from operations in 2022.
Latent View Analytics Revenue and Valuation Parameters
The Latent View share price falls from its all-time high of INR 756 level to form a bottom at INR 307 level which is a more than 50% fall. However, the company is a zero-debt company. The Net cash flow from operating activities is strong with a net cash flow from operations of INR 874 million in FY22. Refer below table to detail parameters and their respective values.
Latent View Analytics Revenue and other parameters
| All amounts in INR Million except percentages (Year ended March 31) | 2019 | 2020 | 2021 | 2022 |
|---|---|---|---|---|
| Revenue from Operations | 2,879.34 | 3,103.57 | 3,058.79 | 4078.17 |
| Total Income | 2,959.03 | 3,296.72 | 3,267.08 | 4287.89 |
| Profit After Tax for the Year | 596.65 | 728.45 | 914.63 | 1295.12 |
| Adjusted EBITDA | 726.78 | 804.25 | 1,045.71 | 1219 |
| EBITDA Margin | 25.24% | 25.91% | 34.19% | 29.9% |
| Return on Equity | 22.36% | 20.94% | 20.89% | 15.1% |
| Return on Capital Employed | 27.23% | 23.12% | 23.89% | 17.5% |
| Net Debt / Equity | 0 | 0 | 0.05 | 0 |
| Earnings Per Share-Diluted (in INR) | 3.26 | 3.99 | 5.12 | 6.84 |
| Net Cash from Operating Activities | 644.12 | 629.68 | 898.86 | 874 |
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Latent View share: Do you invest? 10 factors to know
- Strong revenue growth over the years.
- Long-term relationship with clients. Revenue from operations of INR 1,199 million in Q1 FY23 with the majority of revenue generated from long-term agreements.
- Strong cash generation with net cash flow from operations of INR 874 million in FY22.
- Capital Requirement for the company is low with capital expenditure equivalent to 1.6% of revenue from operations in 2022.
- Continuously building partnerships with existing clients as well as other technology companies, and product companies to improve its presence.
- Strong industry growth potential with everything going digital.
- Introducing new models/products and Pilot projects with existing & potential clients to gain access to new geographies.
- However, over 90% of the revenue depends on one country, the USA, any economic slowdown in the USA will severely impact the revenue stream of Latent view.
- About 60% of the revenue comes from the 5 top clients, which is not advisable for the company.
- Both FIIs and DIIs have reduced their holdings in Latent View share over the quarters. Valuation is quite high. Latent View share is trading at 59 times PE while sector PE is 42. Latent View share is also trading at 7.45 times price to book value while Price to book value of the sector is 6.68 times.
- Though the Latent View Share price is not cheap in terms of valuation, the above factors make it a different new-age company with a lot of growth potential. I would invest in the Latent View share for the long term. I will put my money with corrections.