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LatentView Analytics Limited (LATENTVIEW) delivered a strong 4Q performance with healthy growth across revenue and profitability. Revenue rose 35% YoY to Rs 2,322 mn, aligned with estimates. EBITDA improved 36% YoY, though came in 5% below expectations, due to employee cost pressures. PAT saw a sharp 74% YoY growth, driven by margin expansion and operational efficiency.

4QFY25 Management Call Highlights

• 22% YoY organic growth, exceeding 18-19% guidance

• 7 new logos added with $0.5M+ engagements

• 3 Fortune 500 accounts revived in retail, CPG, and financial services

• 8-10% of FY25 revenue from Gen AI; ~1/3 of it in production

• 16% of future pipeline tied to Gen AI/Agentic AI

• AI Penpal included in Databricks Brickbuilder Accelerators

• Center of Excellence (CoE) launched for Gen AI & Agentic AI

• 250+ Databricks-certified professionals; 25+ joint customers; 4 partner champions

• Data engineering at ~19% of revenue; expected to reach ~30% in 3 years

• Databricks expected to contribute ~25% of revenue at $200M milestone

• Broader ecosystem (Databricks) seeing 40-50% growth in data engineering

• Strong tailwinds from Gen AI adoption demanding robust data platforms

• Nearshore expansion in Canada and Mexico; dedicated talent acquisition lead hired

• Europe expansion focused on CPG; largest investment area outside U.S.

• Decision Point generates 65%+ revenue from LatAm;

• Lease accounting: New San Jose office adds depreciation and finance costs

• $35M redemption liability for Decision Point stake

• 2 large tech clients contribute ~$50M of ~$100M revenue base

• Lower automation risk in tech accounts due to high-end analytics and Gen AI work

• 25+ accounts identified for focused growth and cross-sell

• FY26 revenue expected to grow 18%

• Priority shift from new logos to expansion within existing accounts

• Caution in consumer goods, retail, and industrial verticals due to demand softness

Outlook & Valuation

LATENTVIEW continues to command a premium valuation, underpinned by its high-margin analytics business, growing AI capabilities, and a robust balance sheet. However, the relative softness in the CPG sector, combined with broader macro uncertainty and high client concentration (two clients contributing ~50% of revenues), warrant a more cautious approach. We revise our assigned P/E multiple from 52x to 48x, reflecting these headwinds and the elevated execution risks. Despite this, LATENTVIEW'S differentiated positioning in Gen AI and data engineering, along with steady expansion into Europe and nearshore locations, supports its longterm growth narrative.

We estimate Revenue/EBITDA/PAT CAGR of 24%/29%/25% over FY25- 27E, led by: Strong traction in Gen AI and Agentic AI, contributing ~8- 10% to FY25 revenue with a growing pipeline, Expansion of data engineering services expected to reach ~30% of revenue in 3 years, aided by strategic partnerships (Databricks), Geographic diversification with new investments in Canada, Mexico, and Europe, partially offsetting U.S. dependence, Shift in focus toward deepening existing accounts rather than chasing new logos-likely to aid margin resilience

Softness in retail and CPG, high reliance on a few tech clients, and continued investment for scale (which could pressure near-term margins) remain key risks. Rolling forward EPS to March 2027E at Rs 13.0, and applying the revised 48x multiple, we derive a targe price of Rs 624, implying a 56% upside from current levels

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