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Anand Rathi Report
Decision Point's FY24 revenue is ~$12.8 million,growing at ~50-60% compound annual growth rate. Latent View Analytics Ltd. grew 19% in FY24, with30% Ebitda margin.
Latent View's 70% stake in it is valued at $39.1 million, ~4.4 times enterprise value/sales (FY24E) and 21 times price-to-earning (FY24e), on a no cash/debt basis.
Latent View has ~$147 million cash reserves as of FY24, and therefore would have balance of ~$110 million after the payout. The remaining 30% stake would be acquired by Q1 FY27, although we have assumed associated outflow in FY26E.
The acquisition will add 17% to Latent View's revenue, with the consolidated entity reaching $108 million in FY25E. Decision Point operates almost entirely offshore and hence is more profitable.
The integration would result in a meaningful change in FY25e and FY26e, although the Ebit increase in slightly less due to our assumptions around amortisation. Profit after tax may not seea meaningful change due to loss of other income.
We maintain a Buy, expecting synergies beyond FY26 to be reflected in the higher multiple,and reviseour target price to Rs 630 (from Rs 585),53 times FY26e earnings per share.
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