Latent View Analytics: Target Price Set at Rs 450, Says Prabhudas Lilladher

Latent View Analytics Sees Revenue Growth Amid Challenges in Technology Vertical

Latent View Analytics, a leading analytics services provider, reported its fourth-quarter results, with revenue of US$31.4 million marginally below the expectations of Prabhudas Lilladher's research team. The company's adjusted EBITDA stood at 24.1%, missing the estimated 26% due to continued investments in senior leadership hiring, AI capabilities, and partnership expansion.

Despite the challenges, Latent View Analytics' full-year 2026 revenue of US$120 million was broadly in line with management aspirations. However, the company's Technology vertical, which was expected to see growth, saw a decline of 9.5% year-over-year. On the other hand, non-Technology segments delivered strong growth of approximately 41% led by the BFSI (Banking, Financial Services, and Insurance) sector.

The negative impact of vendor consolidation and insourcing by top clients on the Technology vertical is expected to result in an annualized revenue hit of approximately US$6.5-7 million in fiscal year 2027. However, the company expects to partially recoup the leakage through AI-led deal wins and improving technology spending trends, with an estimated recovery of 50-60%.

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The company's traction in AI capabilities is evident in the growing share of Advanced AI, which contributed approximately 49% to its fiscal year 2026 revenue. The revenue from the Databricks engagement stood at US$17.5 million in fiscal year 2026, up approximately 46% year-over-year. The company aspires to achieve 60% year-over-year growth in fiscal year 2027.

Management reiterated its aspiration of delivering 19-20% US dollar revenue growth in fiscal year 2027, supported by 12-13% visibility from existing order book and qualified pipeline. However, considering the low base of the fourth quarter and anticipated mid-single-digit growth in Hi-Tech, which accounts for 55% of revenue, Prabhudas Lilladher's research team remains slightly cautious and has trimmed its USD revenue growth estimates by 60 basis points each for fiscal year 2027 and fiscal year 2028.

On margins, the company's continued investments in senior leadership, AI, and Databricks capabilities are likely to keep profitability under pressure in the near term. Accordingly, Prabhudas Lilladher's research team has lowered its EBITDA margin estimates to 23.5%/24.2% for fiscal year 2027 and fiscal year 2028.

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The company maintains a healthy cash position, with cash and cash equivalents accounting for approximately 19% of its market capitalization. The company also maintains a cash conversion rate of 60%.

Based on its analysis, Prabhudas Lilladher's research team maintains a BUY rating on Latent View Analytics with an unchanged target price of INR 450, based on 30x fiscal year 2028 earnings per share.