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Play on growing adoption of D&A

About the Company: Latent View Analytics is the leading pure play data analytics services companies in India. It provides expertise on 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.

* It engages to provide services to blue chip companies in technology, BFSI, CPG & retail, industrials and other industries

* Some of the key clients it works include Adobe, Uber Technology & 7-Eleven

Key triggers/Highlights:

* Global IT spend is expected to reach US$4 billion in CY24 from US$2.9 billion in CY20, a CAGR of 8.4%

* Global D&A market is currently at US$174 billion, comprising 6% of the global IT spend

* Global D&A market is expected to grow at 18% CAGR over CY20-24 to reach US$332 bn

* Geography wise, North America (US+ Canada) forms 42% of the global D&A Market, followed by APAC (34% of mix) and Europe (23% of the mix)

* Vertical wise, BFSI forms 34% of the global D&A Market, followed by CPG & retail (31% of the mix) and others (22% of the mix)

* Global D&A market to reach 8.3% of the global IT spend in CY24, aided by North America & Europe market, which is expected to grow by 16% and 19.3%, respectively, in the same period. Vertical wise BFSI, CPG & retail will drive growth as they are expected to grow by >19% CAGR over CY20-24

What should investors do? Latent View Analytics is the leading pure- play data analytics services companies in India, which is expected to benefit from growing thrust of D&A spends across geographies and verticals. At the upper end of the price band, it is valued at 43.6x P/E on Q1FY22 (annualised fully diluted basis)

* We assign UNRATED rating to the IPO

Key risk & concerns

* Client concentration risk as 59% of revenues comes from top five clients

* Vertical concentration as significant revenues come from limited verticals

* Unable to close potential inorganic opportunities

Company Background

Latent View Analytics, incorporated in 2007, in Chennai, is among the leading pureplay data analytics services companies in India (Zinnov report). It designs and engineers result-oriented analytics solutions for clients across industries, that enable them to operate more efficiently by predicting outcomes that fuel digital transformation and sustainability. Their expertise in business analytics includes analytics with respect to customer profiling, targeted marketing, supply chain management, finance & risk management, and HR functions. The company provides these services on the back of the expertise and understanding it has developed of various AI/ML algorithms that power its digital analytics implementations.

Its scope of work is classified into: (i) Consulting services, that involves understanding relevant business trends, challenges, and opportunities and preparing a roadmap of data and analytics initiatives that addresses them; (ii) Data engineering, that is undertaken to design, architect and implement the data foundation required to undertake analytics; (iii) Business analytics, that delivers analysis and insights for clients to take more accurate, timely and impactful decisions; and (iv) Digital solutions that it develop to automate business processes, predict trends, and generate actionable insights.

The company begins its engagements with most clients by providing business intelligence and visualisation services, which may be followed by deeper engagements for advanced analytics and predictive modelling. This could be further expanded in the areas of strategic insights, thought leadership and business recommendations. The company also has expanded range of offerings from basic services such as web analytics, activity-tracking reports, survey analytics to social media analytics, big data, cloud architecture and migration. It is currently engaged as a strategic partner to several clients delivering a wide range of end-to-end solutions

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