Target: ₹630

CMP: ₹ 534.55

Latent View Analytics’ Decision Point acquisition strengthens its Retail CPG presence.

Decision Point’s FY24 revenue is $12.8 million, growing at 50-60 per cent CAGR. The company grew 19 per cent in FY24, with 30 per cent EBITDA margin.

LatentView’s 70 per cent stake in it is valued at $39.1 million, nearly 4.4x EV/sales (FY24) and 21x PE (FY24), on a no cash/debt basis. LatentView has $147 million cash reserves as of FY24 and therefore, would have balance of $110 million after the payout. The remaining 30 per cent stake would be acquired by Q1 FY27, although we have assumed associated outflow in FY26.

The acquisition will add 17 per cent to LatentView’s revenue, with the consolidated entity reaching $108 million in FY25. Decision Point operates almost entirely offshore and hence is more profitable. The integration would result in a meaningful change in FY25 and FY26, although the EBIT increase in slightly less due to our assumptions around amortisation. PAT may not see a meaningful change due to loss of other income.

We maintain a Buy, expecting synergies beyond FY26 to be reflected in the higher multiple and revise our TP to ₹630 (from ₹585), 53x FY26e EPS.

Source link