Latent View

Latent View Analytics Limited concluded FY26 on a strong note, successfully surpassing the INR 1,000 crores revenue mark. In dollar terms, the company has grown approximately 2.2x over the three years since its IPO. The FY26 business EBITDA of 23% was in line with the earlier guidance of 23-24%, reflecting consistent profitability alongside growth.

Despite starting the new fiscal year with a 'gap down' due to headwinds in the technology vertical, Latent View demonstrated resilience. A large technology account experienced a shrinkage of $6.5-7 million in Q4 FY26 due to client consolidation and work moving in-house. However, the company still achieved a 0.5% sequential growth in dollar terms in Q4, driven by strong performances in the BFSI and CPG retail verticals. Management expects to recoup 50-60% of the lost revenue in this account within the next one to two quarters.

AI is becoming a core component of Latent View's offerings, with approximately 49% of FY26 revenues having an AI component. This includes 28% from 'primary AI' where solutions are directly visible to clients, and an additional 21% where AI operates 'under the hood'. The company is actively building capabilities, including a Claude certification program with 40 people in the final stage, and is focusing on hiring 'forward-deployed engineers' to integrate AI, data science, and domain expertise.

Latent View plans strategic upfront investments in FY27, particularly in leadership hiring for its AI Center of Excellence and Databricks practice. These investments are projected to result in a slightly lower EBITDA margin of 21-22% for FY27, compared to 23% in FY26. However, management anticipates potential upside from favorable INR/USD exchange rates and a shift towards more offshore/nearshore work.

The company has successfully diversified its revenue mix. The technology vertical's contribution has decreased from over 70% in Q1 FY25 to approximately 55% in Q4 FY26, while BFSI and CPG retail have grown substantially. BFSI, in particular, grew over 80% YoY in FY26 and is projected to grow at least 40% in FY27. Geographically, the 'Rest of World' revenue share has increased to about 15% in the most recent quarter, up from 6% eight quarters ago.

The partnership with Databricks continues to strengthen, with work from this ecosystem generating approximately $17.5 million in FY26 and expected to grow over 60% in FY27. Latent View is also evaluating inorganic acquisition opportunities to further enhance its Databricks capabilities. Additionally, the company made a small, strategic investment in Healtheon, an agentic orchestration platform for revenue cycle management in healthcare, aligning with its AI strategy.

Management is actively encouraging a shift towards milestone, deliverable, and outcome-based contract models, moving away from traditional time-and-materials (T&M) or managed services. This strategy aims to ensure that productivity gains from AI and agentic solutions accrue to Latent View. While 18-20% of contracts are fixed-bid, 65-68% of the 80% T&M contracts are managed services, which are capacity-based rather than time-sheet driven.