Hold Latent View Analytics: target of Rs 210: ICICI Securities

What happened

ICICI Securities maintained a HOLD rating on Latent View Analytics with a target price of Rs 210. The broker cut its valuation to 18 times earnings from 22 times, citing weakness in the technology vertical and the project-based CPG business.

Confirmed

Global impact / market context

A lower valuation multiple means the broker expects slower profit growth, so investors may need more years of earnings to justify today's share price. The cut reflects concern that a top client's spending reduction and lumpy project work will weigh on revenue.

Analyst inference

Latent View depends heavily on technology clients, so budget cuts and consolidation there hit its largest revenue source. Growth in banking, industrials, and Databricks work partly offsets this. The shift toward recurring, annuity-type revenue under new leadership is meant to smooth uneven project-based results over time.

Analyst inference

What to watch

1. Latent View's technology vertical, its largest, faces client-side consolidation and budget cuts, including a top client spend cut. Watch whether this pressure eases within the roughly two years the broker expects. Confirmed
2. The broker values the stock at 18 times earnings, down from 22 times, using Q3FY28-Q2FY29 earnings per share of INR 11.6 to reach the Rs 210 target. Watch whether actual earnings track this forecast. Proposed
3. Watch whether new leadership converts growth into more broad-based, annuity-type revenue. Recurring revenue would reduce reliance on lumpy project work in the acquired CPG business and make sales and profit more predictable. Analyst inference

Evidence

• Original source link unavailable