Buy Latent View Analytics; target of Rs 270: Prabhudas Lilladher

What happened

Prabhudas Lilladher recommended buying Latent View Analytics and set a target of Rs 270. Its report said Q2FY27 revenue in US dollars rose 2.0% from the prior quarter, while adjusted EBITDA margin, the share of revenue left after operating costs, improved to 20.7%.

Confirmed

Global impact / market context

The report links improved operating profit per revenue to lower sales and marketing costs offsetting higher staff costs. But the largest segment, Tech, declined slightly as clients consolidated and controlled budgets, so continued weakness there could limit revenue growth and make the firm’s longer-term revenue goal harder to reach.

Analyst inference

The report indicates subdued near-term growth visibility, while a large technology segment remains weak amid client consolidation and budget cuts. If renewals or new business are delayed, revenue growth could stay limited; cost controls may support profitability, but continued investment in AI and Databricks adds spending needs.

Analyst inference

What to watch

1. Watch whether technology clients renew contracts and resume spending: this segment accounts for 55% of revenue, and the report says consolidation and budget rationalization are weighing on it. Analyst inference
2. Watch whether potential business becomes signed work, since the report says part of expected FY27 revenue depends on converting the pipeline, or prospective deals, into contracts. Analyst inference
3. Track whether cost savings continue to offset higher staffing and wage costs as management invests in AI and Databricks and pursues its medium-term margin goal. Analyst inference

Evidence

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