‘Overall demand continues to be robust but sales cycles are getting elongated’: LatentView Analytics CFO

Digital analytics consulting firm LatentView Analytics declared its fourth quarter earnings last week on May 9. Post earnings, Rajan Venkatesan, Chief Financial Officer, LatentView Analytics, elaborated on the growth drivers for the quarter and the trends shaping the industry, in an interview with Ayushman Baruah. Edited excerpts:

What were the key revenue growth drivers in Q4?

The revenue growth drivers in Q4 for LatentView Analytics were the broad-based growth across technology, financial services, and consumer packaged goods. The revenue from operations for the latest quarter was up by 20.1% to Rs 141.1 crore from Rs 117.4 crore in the same period last year, driven by the growth in these sectors. Going forward too, our focus will be on the value propositions that we offer to our existing and potential customers in these industries, addressing their pain points.

What were some of the financial highlights of LatentView Analytics for FY23 and Q4FY23? 

LatentView Analytics posted a consolidated net profit of Rs 155.4 crore in FY23, which is a 20% increase from the net profit of Rs 129.5 crore posted in FY22. The company also recorded its highest-ever full-year revenue of Rs 539 crore in FY23, up from Rs 408 crore in FY22. Profit before tax (PBT) for the full year was up by 44% to Rs 189 crore from Rs 131 crore in the previous year. However, for Q4FY23, the company’s net profit was down by 4% to Rs 34.2 crore against Rs 35.6 crore in the corresponding quarter of FY22. The operating revenue for Q4FY23 was Rs 141.1 crore, which is a 20.1% YoY growth, while the operating revenue for FY23 was Rs 538.8 crore, a YoY growth of 32.1%.

How are you impacted from the US banking crisis?

We have not experienced any direct impact on our business as a result of the crisis, such as loss of revenue or clients, as we do not have any direct exposure to banks in the US. Most of our work in the US is with asset management and fintech companies, who are largely unimpacted. However, there could be an indirect impact in the future, especially keeping in mind the likelihood of a recession. There may be a spill-over effect from its impact on other industries, who could feel the pressure of higher interest rates and access to credit.

How do you see the demand environment for the next few quarters?

Overall demand continues to be robust and the total pipeline continues to be healthy. However, sales cycles are getting elongated and there is some level of sluggishness in closing new opportunities. Our view is that this trend will continue for one or two quarters, post which demand should bounce back sharply.

Do you see any cuts in client budgets and delays or cancellations in projects?

We have been able to renew all existing contracts without any cutbacks for the next year, which is a positive sign. There is a consolidation of vendors happening in a few key accounts and we see this as a window of opportunity to gain wallet share in these accounts.

What are the emerging technologies you will focus on in FY24 and beyond?

Generative AI is on top of everyone’s agenda and we believe enterprises and service providers are both bracing for a significantly higher level of automation, on the back of more use cases that will get created with access to Generative AI.

What are your hiring plans for FY24?

We plan to add about 400 people through campus in FY24.