Current/ Expected Orderbook/ Pending Orders?

The number of opportunities in the pipeline has increased significantly compared to the same time last year. Currently, there are over 100 open conversations amounting to over $45 million in potential opportunities. This represents a nearly 3.5x increase in the number of conversations and approximately a 200% increase in opportunity value compared to last year. The timeframe for closure of these opportunities is much longer than previously experienced. While growth and margin profiles are currently muted due to the sluggish economic environment, investments made today are expected to pay off a

Any current/future capex/capital investment/strategic investment?

The company has made significant investments in sales, business development, and capability building, including hiring senior post-graduates and higher-caliber talent. Investments focus on building value propositions and solution-led strategies aligned with client needs. There is an ongoing investment philosophy to support a 25-30% growth trajectory, despite current sluggish growth and margin pressure. Investments are considered necessary to avoid playing catch-up when demand recovers. Recent analytics roundtable events serve as platforms to generate demand and support pipeline develop

Future growth expectations in sales/revenue/volumes?

LatentView aims to deliver growth exceeding the industry benchmark by 5% to 8 percentage points. They expect to return to historical growth trajectory within a couple of quarters. The company is targeting at least 30% organic revenue growth, with inorganic growth as an addition. Current pipeline has over 100 open conversations worth $45 million, a significant increase compared to the prior year. Europe is expected to contribute 5% to 8% of revenues by FY '24 end, showing promising traction. Growth driven mainly by existing large accounts and expanded initiatives, though closure timeframes are

Future growth expectations in earnings/operating earnings/profits/EPS?

LatentView aims to deliver industry-leading growth, exceeding industry benchmarks by 5% to 8 percentage points in the near future. The company expects to return to its historical growth trajectory within a couple of quarters as positive demand signs and growth in Europe emerge. Current investments in sales, marketing, and capabilities are intended to support a 25%-30% growth target over the next three years. Management anticipates margin expansion aligned with growth, expecting EBITDA margins to improve gradually but not immediately return to historical 25%+ levels due to ongoing investments.

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Latent View Analytics LtdQ3 FY23IT - Software

Latent View Analytics Ltd Q3 FY23 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹299P/E: 32.1Market Cap: ₹6.4K CrSector: IT - Software

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

N/A

Order

Yes

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→LatentView aims to deliver growth exceeding the industry benchmark by 5% to 8 percentage points.
→They expect to return to historical growth trajectory within a couple of quarters.
→The company is targeting at least 30% organic revenue growth, with inorganic growth as an addition.
→Current pipeline has over 100 open conversations worth $45 million, a significant increase compared to the prior year.
→Europe is expected to contribute 5% to 8% of revenues by FY '24 end, showing promising traction.
→Growth driven mainly by existing large accounts and expanded initiatives, though closure timeframes are longer.
→Demand for data engineering services is expected to grow, potentially reaching 25% to 30% of revenues.
→Investments in salesforce and capabilities are ongoing to support future growth.
→Management is optimistic about positive demand trends in certain verticals and regions.

Margin guidance

Category 3

→LatentView aims to deliver industry-leading growth, exceeding industry benchmarks by 5% to 8 percentage points in the near future.
→The company expects to return to its historical growth trajectory within a couple of quarters as positive demand signs and growth in Europe emerge.
→Current investments in sales, marketing, and capabilities are intended to support a 25%-30% growth target over the next three years.
→Management anticipates margin expansion aligned with growth, expecting EBITDA margins to improve gradually but not immediately return to historical 25%+ levels due to ongoing investments.
→There is confidence in operational efficiency improvements and increased pipeline opportunities ($45 million pipeline, 3.5x increase year-over-year).
→Longer-term target includes organic growth of at least 30%, supplemented by inorganic growth through acquisitions.
→EPS growth is expected to improve as revenues grow and margins stabilize with the ongoing strategy execution.

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Fundraise plans

- The transcript does not mention any current or planned fundraising through debt or equity. - There is no indication of new capital raising activities or intentions related to debt or equity financing. - The company has a strong cash position with INR 1,160 crores in cash and cash equivalents, including IPO proceeds, as of September 30, 2023. - The focus currently is on prudent investment in growth and capability building without scaling back despite the sluggish economic environment. - Discussions are ongoing for acquisitions, but no mention of external fundraising to support these. In summary, no current or future fundraising through debt or equity is disclosed.

Order book

Yes

→The number of opportunities in the pipeline has increased significantly compared to the same time last year.
→Currently, there are over 100 open conversations amounting to over $45 million in potential opportunities.
→This represents a nearly 3.5x increase in the number of conversations and approximately a 200% increase in opportunity value compared to last year.
→The timeframe for closure of these opportunities is much longer than previously experienced.
→While growth and margin profiles are currently muted due to the sluggish economic environment, investments made today are expected to pay off as conditions improve.
→The company remains cautious but encouraged by recent developments and continues to focus on growth and profitability.

Capex plans

Yes

→The company has made significant investments in sales, business development, and capability building, including hiring senior post-graduates and higher-caliber talent.
→Investments focus on building value propositions and solution-led strategies aligned with client needs.
→There is an ongoing investment philosophy to support a 25-30% growth trajectory, despite current sluggish growth and margin pressure.
→Investments are considered necessary to avoid playing catch-up when demand recovers.
→Recent analytics roundtable events serve as platforms to generate demand and support pipeline development.
→The company is actively pursuing acquisitions in the $10-20 million revenue range to expand domains and capabilities, which are in advanced stages of discussion and due diligence.
→There is cautiousness in valuation and future acquisition decisions, factoring in synergy and economic environment.
→Operational efficiencies are being pursued alongside investments to support margin expansion over time.

How does Latent View Analytics Ltd rank vs peers in IT - Software?

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1Latent View Analytics Ltd

Rev 2Mar 3

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