Latent View Analytics Ltd Management Discussions

INDUSTRY STRUCTURE, DEVELOPMENTS, AND OUTLOOK

Industry Structure and Developments

The global digital analytics and AI services industry continues to evolve rapidly, transitioning from descriptive analytics to predictive and prescriptive intelligence. Enterprises across the globe are increasingly prioritizing data-driven decision-making, accelerated by the mainstream adoption of Generative AI (GenAI), machine learning, and cloud-native data architectures. Despite a cautious macroeconomic environment that temporarily subdued discretionary tech spending, organizations continue to invest heavily in data engineering, customer analytics, and supply chain optimization to drive operational efficiencies. Regulatory shifts regarding data privacy and security are also reshaping the industry structure, prompting businesses to seek analytics partners who can deliver secure, compliant, and scalable data solutions.

COMPANY OVERVIEW

We are a leading global pure-play digital analytics Company, experiencing strong and sustained growth. LatentView Analytics helps businesses gain a competitive edge by integrating both traditional and digital data to enable digital transformation. Our solutions offer a 360-degree view of digital consumers, empowering our clients to uncover new revenue opportunities, predict product trends, boost customer retention, and make smarter investment decisions.

We partner with over 40+ Fortune 500 and similar enterprises to build and execute comprehensive analytics strategies.

Our strengths lie in digital solution accelerators, big data capabilities, predictive social media analytics, and next- generation analytics tools. Unlike firms that focus solely on strategy or execution, we differentiate ourselves by combining deep technology expertise with an outcome-driven approach. Our partnerships with industry leaders in cloud platforms, data visualization, engineering, and customer data platforms allow us to deliver scalable and impactful solutions.

Since our inception, we have helped clients turn data into meaningful business insights, driving holistic, sustainable growth. We continue to invest in cutting-edge technologies to ensure our clients move confidently from raw data to actionable intelligence. As of FY26, we proudly serve 94 active clients across a diverse global footprint. Our customer base spans various sizes, geographies, and industries, primarily in Technology, CPG and Retail, Financial Services, and Industrials including Automotive, Manufacturing. We remain committed to pushing the boundaries of whats possible with analytics, helping organizations thrive in an increasingly digital world.

Cross-industry functional expertise

We bring deep functional expertise across a wide range of sectors, offering tailored analytics solutions that address unique business challenges:

Our domain-specific capabilities empower clients to make data- driven decisions and accelerate performance across critical business functions.

Outlook

As businesses stabilize their IT budgets, we anticipate accelerated investments in AI-led digital transformation. LatentView Analytics is uniquely positioned to capitalize on this wave, given our deep domain expertise in Technology, Financial Services, CPG, and Retail. Our focus will remain on expanding our digital solution accelerators and strengthening partnerships with leading cloud and data platforms. We expect sustained momentum as we help clients navigate complex data ecosystems and transition from raw data to actionable, outcome-driven intelligence.

OPPORTUNITIES, THREATS, RISKS AND CONCERNS

Opportunities

The explosion of GenAI and advanced machinelearningmodels presents asignificantopportunityforgrowth. Enterprises are actively seeking partners tooperationalize AI,presentingavenues forLatentView tocross-sellandup- sell next-generationanalyticstoolsto ourexistingFortune 500 client base. Furthermore,expandingourfootprint inresilientverticalssuchasFinancial Services-which saw a93% year-on- yeargrowthin FY26-and scaling our presence in European and APAC markets offer substantial pathways for revenue diversification.

I Threats

The digital analytics space is highly competitive, characterized by theI presence of large IT service providers, boutique analytics firms, and in-house I Global Capability Centers (GCCs). Rapid I technological obsolescence requires continuous investment in R&D and upskilling; failure to keep pace with lemerging tech trends poses a threat itomarket positioning. Additionally, the Btighteningof global data privacy laws (such as GDPR and similar regional frameworks) increases compliance burdens and operational complexities.

Risks and Concerns

Macroeconomic headwinds

Prolonged economic uncertainty or inflationary pressures in our primary market (such as the US and Europe) could lead to delayed decision-making or reduced IT spending by clients.

Cybersecurity and data privacy

As a data-centric organization, any breach of cybersecurity or mishandling of client data poses severe reputational, financial, and legal risks.

Talent acquisition and retention

The analytics industry faces a persistent supply-demand gap for highly skilled data scientists and AI engineers. High attrition rates or the inability to attract top-tier talent could impact project execution and margins.

Client concentration

While we are actively diversifying, a significant portion of our revenue is derived from the Technology sector and top-tier clients.

A downturn in this specific sector could adversely affect our financial performance.

FINANCIAL PERFORMANCE REVIEW

Profit & Loss Summary (In Rs. million)

Particulars	Year ended March 31, 2026	%	Year ended March 31, 2025	%	Growth (%)
Revenue from Operations	10,602	100	8,478	100	25.05%
Other Income	758	7	689	8	10.03%
Employee Benefits	7,061	67	5,609	66	25.89%
Selling and Admin Expense	1,178	11	913	11	29.02%
Finance Cost	100	1	66	1	50.86%
Depreciation and Amortisation	409	4	293	3	39.75%
PBT	2,612	25	2,287	27	14.20%
Tax Expense	590	6	552	7	6.96%
Profit After Tax	2,021	19	1,735	20	16.50%
EBITDA	2,363	22	1,957	23	20.72%

Revenue

For the financial year ended March 31, 2026, the Company reported consolidated operating revenue of ?10,602 million, compared to ?8,478 million in FY25 - representing a strong year-on-year growth of 25.05%. This performance is particularly noteworthy given the subdued demand environment during the year. While largest business vertical, Technology, continued to be the key growth driver, contributing approximately ?6,459 million in FY26 - achieving an annual growth of 12%. The Financial Services vertical also delivered exceptional performance, contributing ?1,548 million and registering a 93% year-on-year growth. These results are a testament to our strong domain capabilities and execution excellence, as well as the solid demand environment in our focus industries. Our consistent revenue growth across key verticals and the effective integration of inorganic initiatives reaffirm the resilience of our business model and our ability to deliver value in dynamic market conditions.

Other income increased to ?758 million for the year ended March 31, 2026, from ?689 million in the previous year, representing a year-on-year increase of ?69 million or approximately 10% growth. This increase was primarily driven by favourable foreign exchange gains and returns on the companys diversified investment portfolio, reflecting the companys effective treasury management and operational currency exposure management.

Employee benefits

On a consolidated basis, payroll and related benefits costs increased significantly to ?7,061 million for the year ended March 31, 2026, from ?5,609 million in the previous year, representing a year-on-year increase of ?1,452 million or 25.9%. This substantial growth in employee benefit expenses was driven by multiple factors. These include expansion in headcount from 1,650 to 1,744 employees (representing a net addition of 94 employees or 5.7% growth), strategic salary increases implemented across various grades to remain competitive in the talent market, targeted investments to expand our Center of Excellence (COE) practices which contributed approximately 1.3% to this increase and one-time compliance costs associated with the implementation of new labor code regulations during FY26 amounting to ?24.37 million. While payroll costs as a percentage of revenue increased marginally from 66% in FY25 to 67% in FY26, this modest increase reflects the companys deliberate investment in human capital and capability building to support future growth trajectories and strengthen competitive positioning, notwithstanding the headwinds from labor cost inflation and regulatory compliance requirements. Management views this employee benefit investment as strategic, recognizing that talent acquisition, retention, and skill development remain critical success factors in the technology services industry, particularly as the company navigates the transition toward Al-first service delivery models and establishes stronger footholds in high-value service segments.

Selling and admin expense

As a % of revenue, selling and admin expenses remained flat at 11% in the current year. In absolute terms, SG&A grew by 29.0% in the current year due to the following factors:

During the year, the subscriptions and hosting charges have increased by 56% driven by incremental investment in cyber security initiatives and license cost.

Advertisement and sales promotion expenses increased by 36% primarily driven by higher marketing events.

Depreciation and amortisation

Depreciation and amortisation expense increased as a percentage of revenue from operations from 3% in FY25 to 4% in FY26, due to renovation of Chennai facility, which was capitalized in FY25 end, which required capitalization of leasehold premises

Profitability

During the year ended March 31, 2026, our Company earned a profit of ?2,021 million (17.8%) as compared to ?1,735 million (19%) for the year ended March 31, 2025. Profit margin for Fy26 shrunk on account of:

Incremental amortization of intangibles on account of acquisition of Decision point subsidiary.

Increase in Payroll cost due to one off labor code implementation cost accounted for.

Increase in depreciation of leasehold premises capitalized in FY26.

BALANCE SHEET

Cash and Investments

Our cash and investment position as at March 31, 2026 was at ?13,929 million as compared to ?11,495 million as at March 31, 2025. Breakup of investments is as follows:

(In Rs. million)

Particulars	March 31, 2026	March 31, 2025
Investment in bonds	4,650	3,820
Investment in Mutual funds	2,508	2,201
Investment in fixed deposits	2,874	2,322
Investment in government securities	2,012	2,458
Cash in Bank	1,585	694
Deposit with Financial Institutions	300	-
Total	13,929	11,495

We have operationally generated ?1,645.32 million in the current year with cash conversion of 68%.

Trade receivables

Our trade receivables as on March 31, 2026, was at ?2,311.80 million as compared to ?1,847.91 million as at March 31, 2025. Days sales outstanding for the year ended March 31, 2026, was at 71 as compared to 63 as on March 31, 2025.

Total equity

Major events and corresponding movements pertaining to total equity:

(In Rs. million)

Particulars	Opening	Bonus IPO issue	Share options exercise	Profit for the year	Others	Items of OCI	Closing
Share capital	206	--	1	-	-	-	207
Securities premium	4,719	--	55	-	-	-	4,774
Retained earning	9,526	--	-	1,981	237	(13)	11,731
Other reserves	548	--	(21)	-	(100)	413	840
Total	15,000	- -	35	1,981	137	400	17,552

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS

At LatentView Analytics, our people are the driving force behind our outcome-driven approach and technological expertise. During FY26, our focus remained on fostering a culture of continuous learning, inclusivity, and holistic employee well- being. To stay ahead of the technology curve, we launched targeted upskilling initiatives focusing on GenAI, advanced predictive modeling, and cloud engineering, ensuring our talent pool remains future-ready.

The Company maintained cordial and harmonious industrial relations throughout the year. As of March 31, 2026, the total number of people employed by the Company stood at 1,744. We continue to invest in our talent acquisition engines and employee engagement programs to maintain low attrition and position LatentView as an employer of choice in the digital analytics ecosystem.

DISCLOSURE OF ACCOUNTING TREATMENT

In the preparation of the financial statements for the year ended March 31, 2026, the Company has strictly followed the Indian Accounting Standards (Ind AS) as prescribed under Section 133 of the Companies Act, 2013, read with relevant rules issued thereunder. No treatment different from that prescribed in the applicable Accounting Standards has been followed.

KEY FINANCIAL RATIOS AND RETURN ON NET WORTH

In accordance with the SEBI (Listing Obligations and Disclosure Requirements 2018) (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in key sector-specific financial ratios. The Company has identified the following ratios as key financial ratios:

Particulars	FY26	FY25	Variance (%)
Debtors Turnover (No. of days)	71	63	12.7%
Operating Profit Margin (%)	17.48%	18.85%	(7.27%)
Net Profit Margin (%)	17.8%	18.92%	(5.92%)
Return on Equity / Net Worth (%)	12.4%	12.7%	(2.3%)