After zooming 283 per cent over its issue price of Rs 197 to a high of Rs 755 on November 26, the stock is still up 148 per cent for IPO investors.
Client and vertical concentration risks and lower-than-guided margins remain key risks for the company, said ICICIdirect, which did not assign any rating to the stock.
Top 5 clients contributed 61 per cent of Latent’s revenue in December quarter while the top 10 contributed 75 per cent of its revenues. Latent has guided for an Ebitda margin of 25-28 per cent on a steady state basis compared with 30 per cent in the first nine months of FY22. It has carried out two wage hikes, one in April 2021 and another in November 2021 as attrition continues to be at elevated levels.
Latent View 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. Its IPO had received record levels of subscription at 338 times last year.
The data analytics services company reported Rs 22.4 crore in adjusted profit after tax for the December quarter, up 22 per cent YoY at Rs 22.4 crore (excluding one-time gain of Rs 22.6 crore) on a 37.7 per cent YoY rise in net sales at Rs 107.8 crore. Ebitda rose 19.1 per cent YoY to Rs 32.2 crore while margins for the quarter tumbled 466 basis points YoY to 29.9 per cent.
ICICIdirect said the data & analytics market stood at $174 billion in 2020 globally and is expected to grow at 18.8 per cent CAGR over 2020-24 to $332.6 billion. North America, it said, will remain the largest region for D&A market and is expected to grow at 19 per cent CAGR over 2020-24 to reach $79 billion.
“About 95 per cent of the revenue of the company comes from the US market and the company has reserved Rs 148 crore for inorganic opportunities,” the brokerage said, adding that client scalability is key.
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