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LatentView Analytics (LATENTVIEW) delivered a strong performance in Q2FY26, with revenue at Rs. 2,575 mn (+23% YoY / +9% QoQ) - 2% above estimates, led by robust growth in financial services (+94% YoY) and consumer (+23% YoY) verticals. EBITDA stood at Rs. 561 mn (+24% YoY / +11% QoQ), marginally below estimates, with margins steady at 21.8% despite higher visa and marketing costs, reflecting strong operational discipline. PAT came in at Rs.457 mn (+12% YoY / -10% QoQ), slightly below expectations due to lower other income and higher tax outgo. The total client count increased to 98 (vs. 97 QoQ) and four new logos were added during the quarter. Vertical mix improved, with Consumer (18%) and Financial Services (14%) gaining share, while Technology moderated to 62%. The company also achieved better geographical diversification, with growing contributions from APAC, LATAM, and Europe. Strategically, LatentView continues to scale its GenAI-led solutions through the RAISE platform, deepen data engineering capabilities via its Databricks partnership, and invest in AI upskilling programs to strengthen analytics-led transformation capabilities.

Management call highlights

* 2QFY26 decision point revenue at ~$3.1 mn from consumer vertical and ~$4 mn overall. GenAI revenue stood at ~$7 mn in FY25. BFSI vertical grew ~80% YoY, supported by one large ~$5 mn account; renewals typically occur in Q2–Q3.

* Engaged with three clients for $250–500 mn deals; these accounts can potentially scale to $2–3 mn annual revenue within 12–15 months. Additionally, 4 large $1 mn+ opportunities are in the pipeline—two of which are multiyear and substantially larger; closure updates expected in 3QFY26.

* Strengthened partnership with Databricks; expanded sales team and certified 350+ employees on Databricks capabilities. Conducted 4 GenAI workshops jointly with Databricks, with 10 more planned in 2HFY26. Achieved $1.4 in mn new wins through the Databricks partnership in 2QFY26; receiving funding support for client pilot projects. Generated $11 mn Databricks-related revenue in FY25; targeting $19 mn in FY26 (+80% YoY). Margin profile remains project-dependent based on platform usage. In 2HFY26, focusing on building SAP-related analytics and data migration capabilities on the Databricks platform

* AI Center of Excellence (House of AI) includes data engineering, data science, advanced analytics, ML, GenAI, and agentic AI capabilities. Exploring synthetic data, churn analytics, GenAI + agentic AI concepts, and HubSpot-based experimentation.

* LATAM expansion progressing well; CPG vertical expected to grow 28% YoY. Increasing client interest in end-to-end capabilities; BFSI also identified as a key growth area.

* Cybersecurity analytics initiative underway—developing frameworks for broader deployment.

* Plan to expand client partners from 20 to 100 over the next 12 months

* Not concerned about H1B visa availability—15-20 people available for deployment.

* Clients have unspent budgets, expected to drive order momentum in 2HFY26.

* Expecting 19–20% in FY26; EBITDA margin guidance of 22– 23% and ETR of 25–26%.

* Higher marketing spends expected in Aug–Nov due to events (10+4) in LATAM, London, and the US; H1B-related costs booked in Q4. Other expenses likely to remain at Rs.30–35 crore annually, reflecting growth investments.

• Key growth drivers: AI Center of Excellence, strong domain expertise, Databricks partnership, BFSI and LATAM expansion.

Outlook & Valuation

LATENTVIEW continues to trade at a premium, backed by its highmargin analytics business, expanding AI capabilities, and debt-free balance sheet. The company is well-positioned to benefit from rising enterprise adoption of data-driven and cloud-native analytics, especially across BFSI and digital-first clients. The Generative and Agentic AI CoE has secured $6 mn in FY26 contracts with another $8 mn in pipeline, spanning use cases such as AI-generated content, automated reporting, and agentic workflows. Data engineering is scaling fast, expected to contribute ~30% of revenue by FY28 (vs. ~18% currently). Strategic collaboration with Databricks is driving multi-year opportunities, including a $2 mn apparel client win. While client concentration remains high (top 10 at 75%), management aims to diversify, targeting Rs.2 bn incremental revenue from 26 strategic accounts and expanding regional mix, with Asia, LATAM, and Europe now contributing 11% of revenue.

We cut our FY27–28 EPS estimates by 3% and ~9%, reflecting elevated operating costs and margin compression. We forecast Revenue/EBITDA/PAT to post a CAGR of 20%/26%/21% over FY25– 28E, with RoE expanding to 13.1%. Rolling forward to Sep-27E EPS of Rs.13.0, we value the stock at 45x PE, arriving at a revised target price of Rs.545 (from Rs.663 earlier), implying ~28% potential upside. Maintain BUY.

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