Latent View’s valuations look stretched; keep stop loss at Rs 450, say analysts

NEW DELHI: After a 169 per cent surge at listing, Latent View Analytics does seem to have a stretched valuation, said analysts. A strong upside was unlikely in the short to medium term, they said, advising holding the stock with a stop loss at Rs 450.

Binod Modi, Head Strategy at Reliance Securities, said given the niche presence of Latent View in digital analytics and consulting with a proven track record of profitable growth, there was strong appetite among investors about the IPO.

“Notably, the investment in digital technologies is expected to double from 2020 levels to $2.4 trillion in 2024 (16.5 per cent CAGR). This presents an immense opportunity for Latent View, which may aid it to sustain a double-digit growth in subsequent years. That said, valuations appear to be stretched now and only limited gains can be expected hereon in the near to medium term,” Modi said.

The scrip got listed at Rs 530 on the BSE, up 169 per cent. It hit a high of Rs 548.75, before seeing some profit taking. At 10.33 am, it was quoting at Rs 488 a piece.

Parth Nyati, founder of Tradingo, said investors who got the allotment can put a stop loss of Rs 450 and hold the stock with a long-term view, while new investors should look for a dip to buy the stock.

“Latent View is the first of its kind to get listed in the Indian stock market with no apple-to-apple peers. So it has a first-mover advantage. It is backed by strong management and fundamentals with increasing margins. There is a risk of revenue concentration and the revenue growth has been muted in the last three years. However, the industry is expected to grow at a CAGR of 15-20 per cent in the next three years, which should aid the company’s revenue,” Nyati said.

Santosh Meena, Head of Research at Swastika Investmart, said the overall outlook was bullish, but the valuation looked expensive after a strong listing. He advised long-term investors to hold the stock.

“Latent View Analytics IPO has made a blockbuster listing. It’s a good long term play – one of its kind in listed space, so long term investors can hold as Data Analytics is one of the fastest growing areas and Latent View has emerged as a niche player offering services at global scale counting marquee names like Uber, Adobe and other fortune 500 companies as their clients,” said Piyush Nagda, Head-Investment Products at Prabhudas Lilladher.

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