Please refer to important disclosures at the end of this report
1
Latent View Analytics Ltd is a pure play analytics company that provides services
ranging from data & analytics consulting, business analytics & insights, advanced
predictive analytics, data engineering and digital solutions. It caters to blue chip
clients in Technology (63% of FY21 revenue), BFSI (10%), CPG & Retail (10%) and,
Industrial (18%) verticals and has 30+ Fortune 500 companies in the last three
fiscals. Some of the key clients include Adobe, Uber Technology, and 7-Eleven. It
has relationship with top-5 clients for an average of six years which contributed to
~54% to total revenues in FY21. Geographically, United States accounted for 93%
of the FY21 revenues while balance is split between UK & Netherlands and RoW.
Its employee count as on Q1FY22 was 859 and attrition rate stood at 21.5%.
Positives: (a) Leading analytics technology companies. (b) Extensive experience
across a range of data and analytics capabilities. (c) Blue-chip clients across
industries and geographies. (d) Scalable and attractive financial profile.
Investment concerns: (a) High dependence on few clients for a large portion of
revenue. (b) Derives more than 90% of revenues from clients in the US. (c) Inability
to derive benefits from investment in few of its’ Subsidiaries. (d) Forex fluctuations.
Outlook & Valuation: Latent View provides niche solutions in Descriptive and
Diagnostic solutions and Predictive analytics segments and most of its work
pertains to customer analytics. Although global customer analytics market currently
is ~9% of overall analytics application spends it was/is expected to post CAGR of
~26% over 2020-24. Its association and length of relationship with some of the
top technology companies point to its capabilities. The growth has come off in
FY21 due to non-renewal of certain existing client assignments and fewer client
additions and mandates from clients, but the same is likely to improve on focused
go-to-market strategy. Margins improved strongly in FY21 due to lower on-site
employees and lower travel & promoted spends but may contract with resumption
of spends. At `197, the company is seeking ~43x FY21/TTM its earnings which
seems reasonable compared to a high growth digital services company like
Happiest Minds trading at ~115x (comparison owing to absence of like-to-like
listed peer). The IPO provides an opportunity to invest in a pure-play analytics
company which is has tailwinds from investments on Data & Analytics and is
raising fresh funds to chase growth. We have SUBSCRIBE rating on the issue.
Key Finances
Y/E March (` cr)
FY2019
FY2020
FY2021
Q1FY21
Q1FY22
Net Sales
288
310
306
73
88
% chg
--
7.8
-1.4
--
20.3
Net Profit
60
73
91
23
22
% chg
--
22.1
25.6
--
-2.1
EBIT (%)
22.8
23.8
31.9
27.4
28.8
EPS (Rs)
3.0
3.7
4.6
1.2
1.1
P/E (x)
65.3
53.5
42.6
--
--
P/BV (x)
14.6
11.2
8.9
--
--
ROE (%)
44.7
23.7
23.3
--
--
ROCE (%)
41.2
22.0
21.5
--
--
EV/Sales
13.0
11.9
12.0
--
--
Source: Company, Angel Research
SUBSCRIBE
Issue Open: Nov 10, 2021
Issue Close: Nov 12, 2021
Offer for Sale: `126 cr
QIBs 75% of issue
Non-Institutional 15% of issue
Retail 10% of issue
Promoter & Promoter
Group
68.1%
Public 31.9%
Fresh issue: `474 cr
Issue Details
Face Value: `1
Present Eq. Paid up Capital: `60.9 cr
Post Issue Shareholding Pattern
Post Eq. Paid up Capital: `3.2 cr
Issue size (amount): `600 cr
Price Band: `190-197
Lot Size: 76 shares and in multiple thereafter
Post-issue mkt. cap: * `3,775 cr - ** `3,896 cr
Public (Founder, Investor & other Sh) Pre-Issue: 79.3%
Public (Founder, Investor & other Sh) Post-Issue: 20.7%
*Calculated on lower price band
** Calculated on upper price band
Book Building
Latent View Analytics Limited
Latent View Analytics Limited |IPO Note
November 09, 2021
Latent View Analytics Limited | IPO Note
Nov 09, 2021
2
Company background
Company was incorporated as Latent View Analytics Private Limited on January 3,
2006, at Chennai, Tamil Nadu. It is among the leading pure-play data analytics
services companies in India. Company expertise in entire value chain of data
analytics from data and analytics consulting to business analytics and insights,
advanced predictive analytics, data engineering and digital solutions. Some of the
key clients that it works include Adobe, Uber Technology and 7-Eleven. It serves
clients across countries in the United States, Europe, and Asia.
Issue details
The issue comprises of offer for sale of upto `126 Cr and Fresh issue of `474 Cr in
the price band of `190-197.
Pre and post IPO shareholding pattern
No of shares
(Pre-issue)
%
(Post-issue)
%
Promoter & Promoter Group
137,760,000
79.3
134,706,955
68.1
Public
175,157,906
20.7
63,074,883
31.9
Total
173,720,925
100.0
197,781,838
100.0
Source: Company, Angel Research & RHP.
Objectives of the Offer
~`148 CR for funding inorganic growth initiatives.
~`82 Cr for funding working capital requirements of Latent View Analytics
Corporation, company’s material subsidiary.
`130 Cr for investment in subsidiaries to augment their capital base for
future growth.
General corporate purposes.
Key Management Personnel
Adugudi Viswanathan Venkatraman, is the Founder & Chairman of the company.
He holds a postgraduate diploma in management from IIM Calcutta, and a
Bachelor of Technology in Civil Engineering from IIT Madras. He has several
years of experience across IT services, credit analysis & business consulting.
Pramadwathi Jandhyala is the Co-Founder of the company. She has several years
of experience in corporate finance, and credit ratings. She graduated with a B.E.
in Computer Science from BITS Pilani and a postgraduate diploma in
management from IIM, Calcutta.
Rajan Sethuraman, is the Chief Executive Officer of the Company. He holds a
Bachelor's degree in Engineering from the BITS, Pilani and a Post Graduate
Diploma in Management from the IIM Calcutta. He has more than 13 years of
consulting experience, working with the Accenture and KPMG.
Rajan Bala Venkatesan, is the Chief Financial Officer is a Chartered
Accountant. He has previously been associated with Financial Software and
Systems, Ashok Leyland, Deloitte, Lovelock & Lewes and Mphasis.
Latent View Analytics Limited | IPO Note
Nov 09, 2021
3
Exhibit 1: Consolidated Profit & Loss Statement
Y/E March (` cr)
FY2019
FY2020
FY2021
Q1FY21
Q1FY22
Total operating income
288
310
306
73
88
% chg
--
7.8
-1.4
--
20.3
Total Expenditure
215
230
201
51
61
Employee benefits expense
174
198
177
47
50
Other expenses
41
32
24
5
10
EBITDA
73
80
105
22
27
% chg
--
10.7
30.0
--
24.7
(% of Net Sales)
25.2
25.9
34.2
29.7
30.8
Depreciation& Amortization
7
7
7
2
2
EBIT
66
74
98
20
25
% chg
--
12.5
32.4
--
26.4
(% of Net Sales)
22.8
23.8
31.9
27.4
28.8
Finance costs
3
3
3
1
1
Other income
8
19
21
9
4
(% of Sales)
2.8
6.2
6.8
12.8
4.5
Recurring PBT
63
71
95
19
25
% chg
--
13.3
34.2
--
27.5
Exceptional item
-
-
-
-
-
Tax
11
17
24
6
6
PAT (reported)
60
73
91
23
22
% chg
--
22.1
25.6
--
-2.1
(% of Net Sales)
20.7
23.5
29.9
31.2
25.4
Basic & Fully Diluted EPS (Rs)
3.0
3.7
4.6
1.2
1.1
Source: Company, Angel Research
Latent View Analytics Limited | IPO Note
Nov 09, 2021
4
Exhibit 2: Consolidated Balance Sheet
Y/E March (` cr)
FY2019
FY2020
FY2021
Q1FY21
Q1FY22
SOURCES OF FUNDS
Equity Share Capital
1
1
1
1
1
Other equity
266
347
437
370
461
Shareholders’ Funds
267
348
438
371
462
Total Loans
36
33
52
55
96
Other liabilities
(30)
(29)
(26)
(27)
(26)
Total Liabilities
272
352
463
399
531
APPLICATION OF FUNDS
Property, Plant and Equipment
4
5
5
5
6
Right-of-use assets
33
30
25
29
24
Capital work-in-progress
-
-
-
-
-
Intangible assets
0
0
0
0
0
Non-Current Investments
-
-
91
34
91
Other Non-Current Asset
3
27
3
3
14
Current Assets
252
303
365
347
424
Inventories
-
-
-
-
-
Investments
99
72
48
44
48
Trade receivables
51
53
61
38
64
Cash and Cash equivalents
79
150
221
213
279
Loans & Other Financial Assets
20
21
26
48
21
Other current assets
3
7
8
5
12
Current Liability
19
14
26
19
27
Net Current Assets
232
289
338
329
397
Total Assets
272
352
463
399
531
Source: Company, Angel Research
Latent View Analytics Limited | IPO Note
Nov 09, 2021
5
Exhibit 3: Consolidated Cash flows
Y/E March (`cr)
FY2019
FY2020
FY2021
Q1FY21
Q1FY22
Operating profit
71
90
116
29
29
Net changes in working capital
5
(2)
(5)
23
(8)
Cash generated from operations
8
(4)
(6)
(3)
(0)
Direct taxes paid (net of refunds)
(19)
(21)
(16)
(4)
(4)
Net cash flow from operating activities
64
63
90
44
16
Purchase of Assets
(2)
(3)
(2)
(0)
(1)
Interest received
1
4
8
3
2
Others
(47)
(34)
(52)
(17)
(19)
Cash Flow from Investing
(47)
(34)
(45)
(15)
(17)
Repayment (long term borrowings)
(1)
-
23
23
36
Repayment (short term borrowings)
-
-
-
-
-
Proceeds from issue/repayment debentures
-
-
-
-
-
Interest paid
(0)
(0)
(0)
(0)
(0)
Payment of Lease liabilities
(5)
(6)
(6)
(1)
(1)
Dividend Paid
0
0
0
0
0
Cash Flow from Financing
(6)
(5)
17
22
36
Inc./(Dec.) in Cash
11
24
62
51
34
Acquisition
-
-
-
-
-
Opening Cash balances
35
47
75
75
135
Closing Cash balances
47
75
135
127
171
Source: Company, Angel Research
Latent View Analytics Limited | IPO Note
Nov 09, 2021
6
Key Ratios
Y/E March
FY2019
FY2020
FY2021
Q1FY21
Q1FY22
Valuation Ratio (x)
P/E (on FDEPS)
65.3
53.5
42.6
-
-
P/CEPS
58.4
49.0
39.6
-
-
P/BV
14.6
11.2
8.9
-
-
EV/Sales
13.0
11.9
12.0
-
-
EV/EBITDA
51.7
46.1
35.2
-
-
Per Share Data (Rs)
EPS (Basic)
3.0
3.7
4.6
1.2
1.1
EPS (fully diluted)
3.0
3.7
4.6
1.2
1.1
Cash EPS
3
4
5
1
1
Book Value
13
18
22
19
23
Returns (%)
ROE
44.7
23.7
23.3
-
-
ROCE
41.2
22.0
21.5
-
-
Turnover ratios (x)
Receivables (days)
64
62
73
-
-
Inventory (days)
0
0
0
-
-
Payables (days)
11
5
6
-
-
Working capital cycle (days)
53
57
67
-
-
Source: Company, Angel Research
Latent View Analytics Limited | IPO Note
Nov 09, 2021
7
Research Team Tel: 022 - 39357800
E-mail: research@angelbroking.com
Website: www.angelone.in
DISCLAIMER
Angel One Limited (formerly known as Angel Broking Limited) is a registered Member of National Stock Exchange of India Limited,
Bombay Stock Exchange Limited, Metropolitan Stock Exchange Limited, Multi Commodity Exchange of India Ltd and National Commodity
& Derivatives Exchange Ltd It is also registered as a Depository Participant with CDSL and Portfolio Manager and Investment Adviser with
SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel One Limited is a registered entity with SEBI for Research
Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration number INH000000164. Angel or its associates has not
been debarred/ suspended by SEBI or any other regulatory authority for accessing /dealing in securities Market. Angel or its
associates/analyst has not received any compensation / managed or co-managed public offering of securities of the company covered
by Analyst during the past twelve months.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make
such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies
referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and
risks of such an investment.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals. Investors are advised to refer the Fundamental and Technical Research Reports available on our website to evaluate the
contrary view, if any.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources
believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for
general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or
damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has
not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any
representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking
Limited endeavors to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or
other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in
connection with the use of this information.
Disclosure of Interest Statement
1.Financial interest of research analyst or Angel or his Associate or his relative No
2.Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3.Served as an officer, director or employee of the company covered under Research No
4.Broking relationship with company covered under Research No
Ratings (Based on expected returns
Buy (> 15%)
Accumulate (5% to 15%)
Neutral (-5 to 5%)
over 12 months investment period):
Reduce (-5% to -15%)
Sell (< -15%)
Hold (Fresh purchase not recommended)
