Latent ViewQ4 FY24

Latent View Q4 FY24 Earnings Call Analysis

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

Price: 252P/E: 26.7Market Cap: ₹5.2K CrSector: IT - Software

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

N/A

Order

Yes

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3
  • Expecting FY25 organic growth similar to FY24 (~18%-20%), with cautious optimism due to macroeconomic uncertainties.
  • Sequential quarterly growth expected at 5%-6% in Q1, with momentum picking up to 6%-8% and possibly 10% in later quarters.
  • Long-term vision targets a 25%-30% CAGR over the next 3 to 5 years, supported by market potential and strategic investments.
  • Growth driven by investments and partnerships in Generative AI, Microsoft Fabric ecosystem, NVIDIA partnership, and marketing analytics.
  • Expansion into Consumer Packaged Goods (CPG) and Financial Services verticals expected to increase their revenue contribution to ~20% each within 24 months.
  • Acquisition of Decision Point to bolster CPG growth and add new capabilities; inorganic revenue will add on top of organic growth.
  • Pipeline is growing but conversion and larger opportunities still evolving; cautious but optimistic on improving deal closures.

See what Latent View management said on margin guidance — free account, 30 seconds.

Fundraise plans

  • No explicit mention of any new fundraising through debt or equity in the current or future period.
  • The company utilized IPO proceeds for acquisitions, such as the Decision Point acquisition, funded partly from IPO funds (Rs. 147 crores) and partly from internal cash accruals (around Rs. 180 crores).
  • Cash and cash equivalents excluding IPO proceeds stood at Rs. 1,100+ crores as of March 31, 2024, indicating strong internal liquidity to support operations and acquisitions.
  • There is no indication of plans for fresh equity or debt issuance in the near term; funding appears to be managed through IPO proceeds and internal accruals.
  • The management focuses on organic growth and acquisitions funded through existing resources without current need for additional capital raising.

See what Latent View management said on order book — free account, 30 seconds.

Capex plans

Yes
  • LatentView plans to continue investing incrementally in capability building, solution development, and marketing spend, particularly in new areas like Generative AI, NVIDIA partnership, and Microsoft Fabric ecosystem to drive future growth and innovation.
  • The company has made inorganic investments, notably the acquisition of Decision Point, which expands its presence in the Consumer Packaged Goods (CPG) sector and opens up new markets like Latin America.
  • The Decision Point acquisition was funded through IPO proceeds and internal cash accruals.
  • Investments are focused on building long-term growth momentum, with some being front-ended in the first half of the year to set up for FY26 and FY27.
  • No significant new incremental headcount addition in go-to-market functions is planned; focus is on solutioning and marketing investments instead.

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Margin guidance

Category 3
  • LatentView aims for a 25%-30% organic CAGR growth over the next 3-5 years, with acquisitions potentially accelerating this (Page 16-17).
  • FY25 organic growth guidance is cautiously optimistic at 18%-20%, with potential upside from converting pipeline deals (Page 18).
  • Sequential growth expected at 5%-6% in Q1 FY25, with acceleration to 8%-10% in later quarters, aiding margin expansion towards 25% EBITDA margin by year-end (Pages 13-14).
  • EBITDA margins to be maintained between 21%-23% in H1 FY25, with improvement expected in H2 as revenue growth gains momentum (Page 13).
  • Acquired Decision Point is EBITDA accretive (30%+ EBITDA margin) and expected to grow faster than LatentView at 25%-30% (Page 9).
  • Investments in marketing, capability building, and partnerships targeted to drive pipeline and revenue growth beyond FY25 (Page 13).
  • Overall tone is cautiously optimistic, expecting better performance than FY24, dependent on market optimism and deal conversions (Pages 18-19).

Order book

Yes
  • The confirmed order book and extensions for the second half of the year already exceed last year's revenue, indicating a solid revenue base going into the new fiscal.
  • The pipeline at the start of the year is larger than at the start or midpoint of the previous year.
  • However, the pipeline lacks a sufficient number of large new initiatives; much of the current pipeline consists of incremental opportunities.
  • Applying probabilities to the pipeline suggests potential growth of close to 20% over last year's revenue.
  • The company aims to convert this pipeline effectively while continuing to add new opportunities.
  • Larger deals, particularly those exceeding $2 million, are taking longer to materialize but are expected to accelerate in coming quarters.

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

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ThisLatent View
Rev 3Mar 3

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