AI assistant
Latent View Analytics Limited Call Transcript 2026
59599_rns_2026-05-25_a2994559-df05-439e-ade6-bd73e9e99f2e.pdf
Call Transcript
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LatentView
May 25, 2026
The BSE Limited
Phiroze Jeejeebhoy Towers,
Dalal Street, Mumbai-400 001.
Scrip Code: 543398
National Stock Exchange of India Limited
Exchange Plaza, C-1, Block G,
Bandra Kurla Complex Bandra East,
Mumbai 400 051
Scrip Symbol: LATENTVIEW
Dear Sir/Madam,
Sub: Transcript of Earnings Call for the quarter and financial year ended March 31, 2026, held on May 18, 2026
Pursuant to Regulation 30 read with Part A of Schedule III and 46(2)(oa) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed the transcript of the Earnings Call held on Monday, May 18, 2026, post announcement of financial results of the Company for the quarter and financial year ended March 31, 2026.
The transcript is also available on the Company's website at https://www.latentview.com/investor-relations/.
This is for your information and records.
Thanking you,
For Latent View Analytics Limited
PARTHASAN Digitally signed by
PARTHASANATHY
ATHY SRINIVASAN
EAN: 2026.05.25
SRINIVASAN 19:38:50 +05'30'
P. Srinivasan
Company Secretary and Compliance Officer
Membership No. F11519
Latent View Analytics Limited
Unit 6, 7 & 8, 5th Floor, Neville Tower, Ramanujan IT City SEZ
Rajiv Gandhi Salai (OMR), Taramani, Chennai, Tamil Nadu 600113.
CIN No. L72300TN2006PLC058481 | +91 44 4344 1700 Phone | +91 44 4344 1701 Fax
[email protected] Email | www.latentview.com Website
"LatentView Analytics Limited
Q4 FY26 Earnings Conference Call"
May 18, 2026
MANAGEMENT: MR. RAJAN SETHURAMAN – CEO
MR. RAJAN VENKATESAN – CFO
MODERATOR: MS. ASHA GUPTA – E&Y LLP, INVESTOR RELATIONS
LatentView Analytics Limited
May 18, 2026
Moderator:
Ladies and gentlemen, good day, and welcome to the Latent View Analytics Limited Q4 FY26 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Asha Gupta from E&Y LLP, Investor Relations team. Thank you, and over to you, ma'am.
Asha Gupta:
Good evening, everyone, and welcome to Q4 FY26 Earnings Call of Latent View Analytics Limited. The results and presentation have already been mailed to you, and you can view them on the website, www.latentview.com. In case anyone does not have the copy of press release and presentation or you're not marked in the mail, please do write to us, and we will be happy to send you the same.
To take us through the results today and to answer your questions, we have the CEO of the company, Rajan Sethuraman, to whom we will be referring as Rajan. And we have the CFO of the company, Rajan Venkatesan, to whom we will be referring as Raj. This is just to avoid confusion while doing the transcript. We will start the call with a brief update on the business and financials, which will be then followed by the Q&A session.
As usual, I would like to remind you that anything that is mentioned on the call that reflects any outlook for the future or which can be construed as forward-looking statements must be viewed in conjunction with the risks and uncertainties that we take. These risks and uncertainties are included, but not limited to what we have mentioned in the prospectus filed with the SEBI and subsequent annual report that you can find on our website.
Having said that, I will now hand over the floor to management. Over to you, sir.
Rajan Sethuraman:
Thanks, Asha, and thank you all for joining the call. I'll take some time to cover 4 topics on which I thought I'll provide some additional color in addition to the information that's been already made available to you as part of the press release and the investor presentation. And then I'll hand over to Raj for further commentary on the financials.
The first topic I want to talk about is the whole AI thrust for the organization as well as what you all have probably been hearing about in the external media and within the IT services world. We are seeing fairly strong traction for all the AI work that we have been doing. Internally, we have been looking at AI work as work that we do using traditional AI, generative as well as the new agentic solutions that are being implemented.
And we did an internal check on the work that's been done last year in relation to all these three - traditional, generative and agentic. And we are happy to share that about $28\%$ of our revenues for last year involves one of these three, where the AI aspect is clear and visible to the client, which means that they can experience the generative AI interactions or the agentic solutions directly in the implementation that we have done for them, which we feel is a fairly strong traction for the work that we've been able to do on that front. So, we call this primary AI, where the AI solution is directly visible in the hands of the end customers that we are working with.
In addition to that, there is a fairly good chunk of work where the AI is kind of under the hood, but it is still powering either the decision-making or the modeling of the workflow or the process aspect as the case might be. And that is to the tune of another $21\%$ in the work that we did last year.
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So overall, almost half the work that we have been doing has involved AI in some shape and form, a good chunk of it being directly visible right in the hands of the end customers.
There is a fairly broad spectrum of work which we are doing within the agentic space itself, and I'll touch upon that in a few minutes. But in terms of the tooling and the technology that's used, it's covering all the major names that you're familiar with, whether it's Codex from OpenAI or Claude Code and Claude Cowork from Anthropic, Gemini Antigravity, right? All of these are being put to good use in the work that we are doing.
We are also doubling down significantly on the AI partnerships and the work that we're doing, and I'll come back to that in a minute. But before that, just giving a bit more color on the nature of the work that is being done using generative and agentic, in particular. There's work that we are seeing in the payments, invoice reconciliation space where agentic flows are being implemented.
There is quite a bit of work that we are doing on market intelligence gathering and orchestration and making it available in the hands of decision-makers, running campaigns in an automated fashion using agentic frameworks that have been implemented.
A significant amount of work is being done for marketplaces and platforms around fraud analysis, counterfeit detection and quite a bit of work also, again, in the manufacturing space in relation to warranty claims handling. So these are some examples where fully agentic workflows and orchestration have been implemented, and that is actually starting to yield business impact that is directly visible to the client.
From our perspective, we are really doubling down on further strengthening our AI capabilities, both on the go-to-market (GTM) front, as well as on the internal capability building. So there is a Claude certification program that's currently underway, where over 200 people have signed up and almost 40 people are in final stage of launch. So there's a great deal of enthusiasm for all actions related to that.
I was in the U.S. the last 3 weeks, and I had the opportunity to meet a lot of clients and also our partners. And one of them that we are starting to work with is Anthropic and the person who leads the Anthropic partnership, and there is a good amount of traction on that conversation as well.
From a capability standpoint, we are going to be building further strength in terms of the agentic focus, especially senior architects that we'll be hiring. And the entire model, you are probably also hearing that it's kind of like shifting to what is being termed within the industry as forward-deployed engineers where people with full spectrum skills, in some sense, it's a bit of full stack engineers from the past, but with additional AI capabilities and domain understanding and customer interaction capabilities, right, all that rolled into one is what is termed as the forward deployed engineers.
We are again looking at building capabilities around forward deployed engineers who are able to bring the data engineering, BI, data science as well as AI skills together in designing and implementing the solutions, right, that make a difference in the client organization.
One final point on the AI. The announcements by OpenAI and Anthropic that they are going to be forming joint ventures to create services arms, and extend their capabilities not just beyond the models that they are building to directly getting into enterprises. While there have been concerns around that in terms of what it means for services companies, I think it's also a validation that a very strong services
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layer is required.
And just the models by themselves cannot deliver value until the services layer is available to take care of a lot of the orchestration, not just the business process and the decision-making and the embedding within the workflow, but more importantly, topics around transparency, governance, evaluations, validation, provenance, ability to prove something, right? All of these things are important questions. And this is what a strong services layer can help accomplish so that AI solutions are not just some model that's sitting in an ivory tower, but it's actually seeing practical application with very defined business benefits. So, I just want to give you that perspective from a traction standpoint.
The second topic is our partnership with Databricks. Again, a lot of traction on this trip to the U.S. I had opportunity to meet multiple people on the partnership ecosystem. Our partnership in the consumer goods manufacturing and technology space continues to evolve and strengthen. I also had a chance to meet with the person who heads up the professional services partnership. We have a small foothold there. And this conversation helped push that further in the right direction. We are also evaluating potential inorganic acquisition opportunities where these firms come with a much stronger professional services partnership with Databricks. And this is something that, again, we validated with the Databricks leadership team on whether that will actually help propel us right into the next orbit. So this is something that we will double down on in the coming months and quarters. The Databricks Summit is coming up in June, and we will have a very strong representation there with many of our leaders being in attendance. We also organized several exclusive dinner events with several of our clients and prospects and I'm expecting more traction on the back of that.
Finally, we are continuing to make investments both on the go-to-market front as well as on the back end capability experts, architects and so on. And this action will continue in the coming quarters. So this year, two strong pillars of growth will continue to be the AI traction and the partnership with Databricks. And we are expecting that these will yield profits not only in this year but in the coming year as well.
The third topic I wanted to briefly touch upon is the investment that we made in Healtheon. You would have seen the press release that came out earlier in the last quarter. It's a small investment, but we are the first investor into Healtheon.
Healtheon, when we started looking at them and evaluating them, they came with an exceptionally strong business problem and a use case. But more importantly, a very, very well thought out technical architecture and an agentic framework that can solve the revenue cycle management problem within the healthcare space, using largely, right, 80%, 90% of it being done using an agentic orchestration. And of course, there is a human in the loop aspect to that as well, but the solution that they had built and that they had conceptualized and designed was something that resonated with us.
They are currently in the process of building out the agentic suite and the technical solution. They have also signed up two charter clients with whom they are working to build out these agents. As part of the access to the full suite of agents that they will be building, which we can then leverage and use them in other conversations, both from a showcase perspective as well as using them as components in the solutions that we deliver. Plus the revenue cycle management solutions that they are building will be available in a composite fashion if we intend to take it into other health care clients. So I'm expecting that there'll be more traction in the coming months and quarters, and we'll keep you posted
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about it as we move forward.
Finally, the last topic I wanted to cover was the technology industry and some of the headwinds that we have talked about in the previous quarter. We did start this new fiscal with a bit of a gap down because of the headwinds that we witnessed in the last quarter. But I'm happy to report that there are several strong opportunities that we are pursuing, especially on the back of the AI push that we are seeing in these accounts. In fact, in our largest account, as part of this trip, I was able to participate in three fairly large deal conversations. And one of them is almost at the point of fructifying, which will be a $3 million-plus deal in total, but the other two are also $1 million, $1.5 million in size. So, while they have not completely covered the gap down that we had, they do bring us back to a reasonable level of confidence. And we are expecting that if the momentum continues through the course of the year, we'll be able to claw back much of what was lost because of the headwinds in the last year.
One other thing is that we're also engaging with their vendor ops organization, and we are providing analytics support to them, bringing us closer to the procurement organization and getting us more visibility with what is happening within the rest of the organization. So, these are the four broad topics I wanted to cover.
Otherwise, as an organization, we continue to double down on our client partners on hiring the right go-to-market people, making some internal tweaks as well so that we are fostering greater collaboration and cross-pollination across our entities. But these are things that will pan out over the next few quarters, and we will keep you posted in terms of any specific mentions that we may have. Very happy about how we closed out last year, and I'm seeing a reasonable amount of optimism as we step into the year.
So with that, I'll hand it over to Raj for further commentary on the financials.
Rajan Venkatesan:
Thank you, Rajan. Good evening, everyone. And welcome to the last investor call for the fiscal year FY '25, '26. One of the, I would say, big positives for this year as we close the year was going past the INR1,000 crores mark, which is a fairly significant milestone for us. Even in dollar terms compared to the year in which we IPOed, we've roughly grown about 2.2x in about the 3-year time frame.
So, I would say from the sort of growth that we've delivered and consistently with profitability, we were fairly happy with the numbers that were achieved for the last fiscal. And this was also in line with the guidance that we had given earlier in the year where we've indicated that on a full year basis, we'll deliver between 19% to 20% growth with an EBITDA of about 23% to 24%. So pretty happy with the way the year has turned out to be.
In terms of specifically what's happened in this quarter, of course, Rajan already touched upon the fact that we did start the year with some level of shrinkage in one of our large accounts, technology accounts, where there was a fair bit of consolidation that happened within this one large account as well as deprioritization of some of the work that we were doing.
So, we are fairly happy to note that despite the shrinkage that happened in this large account, we were still able to grow in dollar terms by about 0.5% on a sequential basis compared to the previous quarter. This was, of course, driven largely by the strength that we witnessed in the BFSI as well as the CPG retail practice. And we'll talk a little more about what drove growth in these accounts. But BFSI continues to deliver fairly strong numbers. Even as we head into the next year, we expect this practice
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to continue to deliver strong growth. For the last year, we're very happy to report that the BFSI practice grew in excess of about 80% compared to the year before.
In terms of the Y-o-Y growth, for this particular quarter, in dollar terms, the revenue came in at about 17% higher than the previous year. And in rupee terms, of course, because of the INR depreciation, the year-on-year growth came in at about 24.3% compared to the same quarter in the previous year.
I'll talk a little bit about what sector specifically. So, you will see that the technology vertical for us, historically used to contribute in excess of almost 70%. I mean if you go back almost 8 quarters, right, if you go back to Q1 of FY25, the technology vertical used to contribute almost 70% of our revenues at that point in time. From there to now, you will see that the share of technology from the 70% has come down to about 55%. While technology has continued to grow, what is heartening to note is some of the other verticals, which are primarily BFSI and CPG retail, their share of revenue has grown substantially. One, obviously, based on the organic growth that we witnessed in BFSI, but two, also Decision Point acquisition, which has led to the increase in the overall CPG and retail business.
We're also happy to note that the share of revenues from the rest of the world, I mean at one point in time, maybe 8 quarters back, U.S. used to contribute 94% of our overall revenues, whereas the rest of the world, including Europe was about 6%. We're happy to note that for the most recent quarter, our share of revenues from the rest of the world has increased to about 15% compared to 6%, 8 quarters back.
So, both from a geographical concentration standpoint as well as from a vertical concentration standpoint, we have seen some of the other verticals as well as geographies expand, and that is again heartening to note.
I'll talk a little bit about the profitability itself for this particular quarter. You would have noted that our EBITDA for this quarter, and this I'm talking about adjusted EBITDA. The adjusted EBITDA came in at about 24.1%, there was, of course, a benefit of forex, which was to the tune of about 1.1% on the overall EBITDA for this quarter. But this particular quarter, we also had some benefits in terms of certain costs that were there in the previous quarter, which did not recur in the current quarter. So, you will all recollect that the last quarter, we had made corrections to our wages to comply with the Labor Code. And also, there was severance pay that was paid for some level of headcount rationalization that we had done in the last quarter. Those two items contributed almost 1.5% of costs in the previous quarter, which did not recur in the current quarter. So we did get some of those benefits. However, the positive impact of forex and the labour code-related restructuring was offset by higher spend on travel as well as SG&A, other items like visa.
Even though our visa cost as compared to the previous year has come down, but then we did have a fair amount of visa costs for H1B filings that we had to do, and those costs were incurred in the end of Q4. Both of those meant that the consolidated impact of higher travel plus visa cost was about 1.1% on our overall EBITDA. And of course, we continue to sort of spend on certain other aspects, we still want to increase some of the leadership hiring, specifically as far as the AICOE is concerned.
Hiring client partners for some of our key accounts as well as continuing to build our Databricks practice. So, we had some level of higher SG&A spend in relation to some of these hiring efforts that we had to make. Net-net, from the 23%, the items that I spoke about meant that for this particular quarter, we came in at about 24%. But on a full year basis, again, in line with what we had guided
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before, our business EBITDA for the full year came in at 23%, in line with what we had guided.
This is also the last quarter in which the transaction-related retention cost expense that we were adjusting for the purpose of reporting EBITDA that would be incurred. Going forward, you will not see that line because you will not have this cost going forward.
Coming to the PAT and the EPS, this quarter also had a small benefit coming through on account of deferred tax asset that was created in relation to unexercised ESOPs that were there in the U.S. Please note that this is only for the U.S. and this was an accounting charge in some sense, and it was not charged. This was an accounting sort of asset that we had to create, which resulted in the ETR dropping from the typical 25% to about 22% levels for this particular quarter. Going forward, we will not see any such impact. And this, I'm talking about the current ESOPs that have been issued to the employees.
On the EPS line, again, EPS for this quarter, while you did see a small degrowth compared to the previous quarter, the degrowth is largely on account of lower other income that you would have seen compared to the same quarter in the previous year. You will see that for Q4 of FY '25, the EPS came in at about INR2.59 against that we are at about INR2.55. But please bear in mind for the last year, there was almost INR4.5 crores forex gain that we had recognized in relation to some intercompany loans and advances that were given out. If you were to strip that out, the EPS even on a comparative basis had grown by about 8%, compared to the previous year.
So, with that I would like to close my opening remarks saying that we are happy to note that FY '26 concluded on a fairly strong note. While there has been some level of headwinds in the technology vertical, we are impressed particularly by the strength in the BFSI and the CPG practice. Our Databricks practice again continues to generate significant traction in terms of deal pipeline and inbound sort of referrals.
We're also fairly excited about the transformation and the winds of change that we are seeing on the AI side. So close to about 28% of the projects that we delivered in the last year had a significant AI component. And we believe that this number is only bound to increase even in the current year as we continue to execute through this year. With that, I will hand it back to Asha and we can open up for Q&A.
Moderator:
The first question comes from the line of Aditi Patil from ICICI Securities.
Aditi Patil:
My first question is on the technology vertical. The sequential drop in technology vertical appears to be higher than what we had called out in Q3. So, correct me if I am wrong, we had called out around $5 million, $6 million annual drop we are expecting in one of our top tech clients. So if you consider that, then the sequential drop in Q4 seems to be slightly higher. Is my understanding correct? And is there any other client-specific issue in the technology vertical?
Rajan Venkatesan:
Yes. Aditi, specifically in this particular account, while the initial estimate was the drop will be closer to about $5.5 million, $6 million, that was the estimate that we had given out in the last quarter. In reality, some of the rationalization that happened subsequently as well or continue to happen meant that the total value of shrinkage was closer to about $6.5 million to $7 million. That is the total value of shrinkage that happened in this particular account.
But with this, the one thing that we want to confirm is all the renewals, all the rationalization are all
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done. So, it was not $5.5 million to $6 million, it was closer to about $7 million, but coming back to Rajan's point, we are in active discussions even with this particular account on several other threads at this point in time. Which definitely gives us confidence that we will be able to recoup more than 50% to 60% of the revenue lost in this account in the next one or two quarters in terms of the overall book of work that we execute with them. So there are already some very advanced discussions that we are in with this particular client to recoup the revenue lost.
Aditi Patil:
Okay. Got it. And apart from this client, what is the traction we are seeing in other clients? And therefore, like what kind of growth should we expect in technology vertical in FY '27?
Rajan Sethuraman:
I can cover the traction and Raj you can comment on the percentage number. The other two large accounts that we have in the technology space, in general, with one of them, it's been fairly even keel, right, at this time. They have also gone through some leadership change at their end at the very top. And the third one, they've been going through some consolidation and related exercises over the last couple of years. But at this point in time, again, the interactions that we have had so far indicates that we will actually pick up in the next year.
Other than these 3 top accounts, in general, the sentiment in the technology space, given the amount of activity that is happening in relation to AI seems to be more positive rather than negative at this time. Of course, clients want to do a lot more on their own. But there is also the general feel that whatever initiatives were kept on the back burner whatever was shelved earlier can all be picked up. And there could be movement on many of them because the economics of getting initiatives done has improved significantly. I mean you can do many of these things with much higher velocity with lower effort. And that is creating a revival of interest in exploring and doing a lot more things in comparison to budget constrained approaches. That were there in earlier quarters.
So, in general, I feel more optimistic. I mean the percentages and stuff we will obviously see as things pan out over the next one, two quarters. But at this point in time, that's the headline.
Aditi Patil:
Okay. That's helpful. And my next question is on the BFSI vertical. So we had a very strong growth in this vertical for last the few quarters. But in Q4, if we see the sequential growth, it was flattish. So was there any onetime revenue in Q3, which were not there in Q4? Or what can explain this?
Rajan Venkatesan:
Aditi, even in relation to what we delivered for the last quarter, the share of BFSI revenue from 14% has gone to almost 16%, in this particular quarter on a sequential basis. So there is a definite increase in this particular quarter in relation to the previous quarter.
Aditi Patil:
Okay. I will just check my numbers on that.
Rajan Venkatesan:
Yes. I'm happy to answer this offline. But at least for this quarter, there was fairly strong momentum even in BFSI. So, BFSI ended the year with close to about $18 million in revenue, and as the business continues to scale, you will see the incremental rate of growth dropping because obviously, they are on a higher base as well. So that is something that we will start to witness. But in absolute terms, the current business has continued to grow.
Moderator:
The next question comes from the line of Karan Uppal with PhillipCapital India.
Karan Uppal:
Rajan, You mentioned about the AI impact on the business is like that almost half of the work has
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some bit of AI involved. So if you can give some examples in terms of the nature of services, which we are delivering as well as the deal sizes. And if you can also comment how the deal sizes are different from the traditional deal size of around $0.5 million to $1 million or maybe $1 million to $2 million. And how much of it is, let's say, the token cost, which could be a pass-through revenue and how much is retained by LatentView, so that's my first question?
Rajan Sethuraman:
Yes. The last question is easy to answer. Whatever revenue that we are reporting is all our revenue. It's got nothing to do with the token cost because the model that we use with pretty much all the clients that we are engaging with is that they take care of the infrastructure tokens, whatever LLM access and all that. So everything that we are talking about is our revenue. I did give some examples when I did my opening remarks around the agentic workflows and processes. That we are impacting around payments, invoice reconciliations, market intelligence orchestration, campaign analytics, fraud, counterfeit analytics, warranty claims and so on.
It's fairly broad-based in the sense that any area where the process is known and the parameters are understood and guardrails can be established, guardrails in the sense that you want to make sure that there isn't hallucination, there is transparency, traceability. All of that stuff in terms of what is the decision that is being made and why is the decision made, right? And then you can clearly connect the dots, especially in a multi-agent orchestration framework when agents hand off from one to other, it's important to have that kind of recognition.
So in those type of situations where there is a good understanding of the traceability parameters, there is enough traction. Of course, simpler ones, right, where when I say traditional, when I gave those numbers, it included the combination of all three, traditional, generative and agentic. A lot of the work that we are doing is having some AI component in some shape and form.
So going back to your question on deal sizes, it is the full spectrum. I mean we are seeing examples where a particular use case or something simple is being done with trillion-dollar spend. But we are also seeing examples where the initiatives are fairly larger. In fact, the three initiatives that I referred to with our largest account, all of them involve AI in some shape and form because I mean, which technology clients are not leveraging AI. Its pretty much a given.
I mean you cannot do any work without the AI either under the hood or directly being implemented in the form of either a generative AI interface or an agentic orchestration of the workflow. So the spectrum of work from a deal size also ranges all the way from $0.25 million to $2 million, $3 millions.
Karan Uppal:
Second is on this OpenAI and Anthropic launching their services arm, it's a very recent phenomenon. So any anecdotal evidence of, let's say, enterprises maybe giving more work to the services arms of OpenAI and Anthropic and maybe rationalizing third-party vendors, not LatentView, but anyone else you have seen in the industry, any observations there?
Rajan Sethuraman:
It's too early to comment on that. I mean, obviously, they just have announced these launches. I think OpenAI acquired a company, if I remember, I think called Tomorrow or some, that was the name I saw. And the others are in the process of setting up their JVs and hiring people. Anthropic plus OpenAI probably had put out, recruited 500-odd people, okay, of forward deployed engineers, that I mentioned earlier.
So they will be building out these teams. But obviously, they will focus more on the areas where they
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see friction with respect to the model usage. There is a fairly large amount of work that needs to be done. And we see by any stretch of imagination that an OpenAI or Anthropic will be able to do everything because the model is just one aspect of it. Everything that I talked about that needs to sit on top of that. That all needs to be done by some services company or the other.
Of course, these can range all the way from boutique firms to the OpenAI and Anthropic service arms, right, doing it themselves. But I'm sure that they are also announcing multiple partnerships. Anthropic has received applications for some 40,000 people like partners and they're working through the mechanics of these areas.
These two firms are also taking very specific approaches. I mean Anthropic has been more enterprise focused. OpenAI has been more consumer focused, but I'm sure that there will be some amount of meeting point, right, that will happen over the next few quarters. In general, my feel is that thesis play will be a significant play in the scheme of things. I mean that is the point I wanted to make.
That is not going away. Of course, the nature of the work will change in terms of the power deployed engineering model coming into play. But there is a tremendous amount of work that needs to be done on all the points that I mentioned, whether evaluation, observability, traceability, right, all of that stuff.
Karan Uppal:
Okay. Got it. Next is on FY '26, in dollar terms it is 20% of growth but if can you clarify what is the organic part in it? And for FY '27, how should we think about the overall growth for the company?
Rajan Venkatesan:
Yes, the organic growth for the business would be 18.2% or 18.3% because please recollect that there is only one quarter of Decision Point revenue, which was not consolidated last year. We started consolidating Decision Point revenues from 1st of July last year. So, we had 3 quarters of revenue. So it is only one quarter that was missing. So, the rest of the business delivered 18% growth. In terms of your growth guidance for the next year, and maybe, Rajan, do you want to take it or do you want me to take that question?
Rajan Sethuraman:
Yes. You can take it. I can add on the color. Go ahead.
Rajan Venkatesan:
Yes. So, Karan, right now, what we definitely can see at the beginning of the year, of course, when we're looking at planning for the next year, we actually want to split that answer into a couple of sort of data points. So right now, the way we are looking at our current order book as well as pipeline, we have a reasonable level of confidence in terms of high visibility pipeline and order book to deliver about 12% to 13% of growth, and that is, of course, at the beginning of the year. As we see in any year, typically, whatever you have visibility for, you will end up adding more to the order book and pipeline through the rest of the year, right, and that is where we obviously are making investments in the go-to-market side as well as on the capability building side.
All those investments are obviously targeted to deliver a growth rate, which is very similar to what we delivered this year. This is all organic that I'm talking about. I'm not talking about including inorganic. But right now, the level of visibility that we have is to deliver a 12% to 13% growth. But with investments that are being currently made to deliver a similar growth to what we delivered, which is 18% to 20%.
Rajan Sethuraman:
Yes. The only data point I'll add is that in the previous years, compared to when we start the year to when we end the year, this high visibility number that Raj talked about has typically gone up in the
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range of 8% to 10%. So, it kind of adds up, I mean we are targeting a 20% kind of a growth, and if things pan out well, then we should be able to get there.
Moderator:
Thank you. The next question comes from Vimal Jamnadas Gohil from Alchemy Capital Management Private Limited.
Vimal Jamnadas Gohil:
Yes, thanks, gentlemen. My first question is on the overall outlook that you just provided. Partly, you've answered my question, but I just wanted to get a sense of what are we building in, in terms of tech and non-tech verticals? Are we building the headwinds to continue for the tech vertical because you mentioned that despite strong conversations with our top clients, we'll still see the revenues won't fully cover the decline that we've seen. So that essentially means that the non-tech verticals will do the heavy lifting. Correct me if I'm wrong.
And I just want to understand the nature of the decline in the technology vertical. Is it because of absolute cancellation of projects? Or has there been a severe deflation in the amount of work we've done. So basically, what I mean is the volume of work that we've done has possibly increased, but the deflation around that has been higher than our volume growth. Has that been the case?
Rajan Sethuraman:
I'll take the second part of the question. And Raj, you can comment on the percentages question. The nature of the decline is twofold. One is a consolidation where they have decided to work with one of several partners. This has led to some amount of the decline.
The second part of it is taking the work in-house. Specifically in this account, there was a new leader who came in to head up a big chunk of the work that we were doing. And their preferred model is to work with internal full-time employees as opposed to work with the vendors. That's what they are familiar with and comfortable with from their previous organizations. And therefore, the moment they came on board, they very clearly made their intent known to us, that this is the direction in which they're going to move.
There is no impact on account of work staying the same, but revenue falling or anything like that. I mean the way the whole industry anyway is moving is that budgets are either staying the same or going up in general. They're just getting more work done because of the increased productivity that is now possible through the use of AI, right, in all shape and form. So, if you take a baseline two years back and compare it to today across the board, right, in all industries, all sectors and more so in the technology sector, you will feel that for the same amount of budget, 30%, 40% more work is being done.
There has not been any shrinkage of budgets itself that we have seen. They've either been a reallocation to internal mechanisms or consolidation with other partners. You haven't seen instances where clients have said that do the same work for us, but we're going to pay you less. In general, they said that we are going to pay you the same amount, but more work can be done with the money as well. Raj, maybe you can give color on the percentage.
Rajan Venkatesan:
Yes. So, Vimal, in terms of percentage, your assessment is right that it will be the non-tech vertical, which will have to do the heavy lifting this year. But having said that, I think right now, the visibility or I would say, the sort of confidence that we have is that technology will deliver anywhere between and I'm giving you a range over here because right now, we are working on certain pipeline opportunities depending on, one, the size of these pipeline opportunities eventually and also the timing
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of when we close them, the revenue that we'll be able to book for the year may sort of change, right?
So, technology vertical for this year, our sense is that it should be between 5% to 8% growth on a year-on-year basis. This is adjusting for the loss. They will still be able to recoup some of the losses. Of course, also there are some new conversations that are going on with some new logos as well in the technology vertical. So adjusting for the losses that we've already witnessed, we should be able to deliver a Y-o-Y growth of about between 5% to 8%. That's the confidence that we have.
Consumer should, our sense is right now, should grow anywhere between 18% to 22%. So that's the sort of range that we're looking at. And BFSI, obviously, the growth rates for the next year will come down compared to the previous year. But our sense is they should grow at least at about 40% for the next year, based on where we stand right now.
Vimal Jamnadas Gohil:
Understood, Raj. Raj, just on margins, we've had benefits around, of course, the USD. We've also had some employee adjustments that we have done, plus we have had our utilization levels around 90%. I do understand, I mean, the utilization going up because of employee adjustments. But to some extent, I feel we've sort of stretched our levers in terms of margins. In case there is any normalization as far as these levers are concerned, how should we think about margins going ahead? I mean I don't see any levers that we can sort of leverage at this point in time.
Rajan Venkatesan:
So, your point on utilization for this particular quarter going up from the 85% to almost 89% levels is very valid, Vimal. The only point that I would want to reiterate is one of the reasons why the utilization levels have significantly gone up in this quarter is owing to some one-off. When I say one-off, this is certain large one initial project that we have won with certain consumer clients. And they are actually cutting across two different quarters. So, some of these projects were won in February and March. And they continue to be delivered through May and June as well. So, in order to deliver these projects, of course, we had to deploy all the people that we had on the bench, and therefore, that's the reason why you have seen utilization levels going up. Having said that, I think one of the things that we continue to work through is this large client consolidation that we spoke about, a lot of the work historically used to happen on site.
One of the things that we are actively pursuing with the client is as we open new threads with the client, we want to do a lot more work either offshore or nearshore. So, that is one lever where definitely from a margin standpoint, we will be able to make better margins on some of these projects.
Two, I think while on a full year basis, you may not have seen the impact, the favorable dollar to INR ratio right now as we see it, should continue to positively impact us. I mean if they continue to stay at these levels, for sure, I think there will be a positive impact on margins for next year. So, I think there is sufficient cushion both in terms of the movement to doing more nearshore and offshore work for technology clients plus the favorable INR USD ratio right now.
Vimal Jamnadas Gohil:
The CPG vertical should see normalization next quarter, Raj, because there was a one-off this quarter?
Rajan Venkatesan:
Yes, there will be some level of, I would say, normalization for the next quarter because some of these large projects that we executed, they will start sort of tapering off in the next quarter. Of course, there are some conversations in the pipeline for follow-on work, but you will see a little bit of tapering off for at least the next quarter for CPG.
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Vimal Jamnadas Gohil: Fair. Thank you so much. I'll fall back in the queue.
Moderator: Thank you. The next question comes from the line of Pritesh Thakkar from PL Capital. Please go ahead.
Pritesh Thakkar: So, I was referring to the earlier question of Karan. You were indicating 12%, 13% of revenue that we are anticipating. So that is majorly on the existing accounts or the qualified debt pipelines that we have. That's what we are referring to, right? as per my understanding.
Rajan Sethuraman: It's not just existing accounts. When we say we have visibility of 12% to 13%, it will be a combination of growth we are expecting from existing accounts as well as the high probability opportunities that we see in the pipeline with the new stakeholder groups and existing accounts as well as completely new logos. What Raj referred to is the ones where there is high probability and high degree of confidence. The full pipeline will have many other opportunities that are at a lower level of probability, right, which we want to progress.
In addition to that, we still have more than 10 months available, right? And we will keep adding new opportunities. The point I made was that in general, in the past, compared to the high visibility number that we talked about at the beginning of the year to where we will likely end up, we have seen an 8% to 10% kind of an addition, okay, if things go well. So that's what we are expecting for this year as well.
Pritesh Thakkar: Understood. I was just looking at the client additions that we had on a $5 million plus band. If you can provide some color on the industry profile and the scope of engagement with this particular account.
Rajan Venkatesan: Yes. So, this actually is a financial services account that we've added.
Pritesh Thakkar: Okay. Understood. And lastly, on the bookkeeping side, two years back, if I look at our DSO was around 65 in FY '25. It was 73 a year back and now it is 80 in FY '26. So if you can provide some color why it is inching up and what should be the steady state going forward?
Rajan Venkatesan: Yes. So, I would say two things. One, as the share of Decision Point revenue to the overall company's revenue increases, you will see a small uptick. I think we are already maxed out in terms of what that impact is. But Decision Point, because they do a lot of work with CPG companies, CPG companies in general tend to have credit terms ranging between 90 to 120 days, and for this particular quarter, specifically because of the uptick in CPG revenue, which is largely driven by Decision Point, you did see that DSO days go up.
Having said that, purely from a bookkeeping standpoint, we are very well aware of the fact that the DSO was high at year-end, but we've realized a lot of those collectables subsequent to the year-end as well, right? So, some of those were billed out or were in unbilled revenue, which has been subsequently invoiced. So, there has been a fair bit of progress as far as even the collectibles are concerned.
Pritesh Thakkar: Okay. Understood. Lastly, on the margin side, given our appetite for investments, even if I look at last year, there was a lot of rupee depreciation benefit that came into our bucket, but we made a lot of investments there. So even if I were to include quarter three one-offs that we had on an adjusted basis, if I look at FY '26 margins are, I would say, marginally lower than what we delivered in FY '25. So,
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can we expect FY '27 to replicate a similar trend of yours? Or you believe the investments are largely done and dusted? I heard Rajan saying that we have some seniors onboarding process. And at the same time, we are hiring forward deployed engineers there. So just wanted to understand the investment strategy that we are introducing.
Rajan Venkatesan:
So yes, I would say consistent with what Rajan already alluded to, there will be some senior level hiring that we will continue to make specifically in the AI space, right, including a potential hiring of a Chief Technology Officer. So, some of these investments will be made to obviously future-proof the organization. We will continue to add people on the AI side across all industries as well because that is something that I think from how we lead conversations with clients, I think an AI-first narrative is absolutely important. We need to hire people who deliver some of these projects at scale, right, for large enterprises, and we will continue to make investments in bringing some of these senior level folks, Pritesh.
So I don't think from an investment standpoint, all the investments that we had to do, it's not like we've done all of them. Specifically on the capability side, we will continue to invest. Maybe on the go-to-market side, we don't need to do a lot more investments. I think there is a fair amount of investment that is already there. Here and there, depending on it, it could be geography-specific investment, could be in Europe, right, specifically, we may do one or two hires. But on the GTM side, we are largely done as far as the investment is concerned. Databricks, again, we will continue to invest in this partnership channel for growth.
So, I would say the two big areas of where we will continue to make investment would be Databricks as well as the AI center of excellence.
Pritesh Thakkar:
And how much is our revenue from Databricks currently this year, if I look at FY'26 full year absolute terms?
Rajan Venkatesan:
So, on a full year basis, our revenue from the Databricks ecosystem put together is closer to about $17.5 million.
Pritesh Thakkar:
And the Y-o-Y growth, how much that we delivered in yearly terms?
Rajan Venkatesan:
So, the previous year, the similar number was close to about $12 million.
Pritesh Thakkar:
Understood. Yes, thanks a lot. Thanks a lot for answering this question.
Moderator:
Thank you. The next question comes from the line of Srinath V. with Bellwether Capital.
Srinath V.:
Hi, guys. Three questions. I'll just put all the questions together. Raj, first question would be the growth outlook shared in the call, would that be in USD terms or constant currency terms? If you could clarify that, that will be great.
The next set of questions are on Databricks. I want to understand the outlook for Databricks for FY '27. What's the kind of growth you guys are working with? And would it be fair to assume that Databricks-funded or cloud partner-funded projects will start coming in this year? And would it largely show up in CPG and industrials?
And the last one would be the Financial Services business, could you kind of cover it a little more in
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detail, the sequential growth, Y-o-Y growth, momentum seems to continue. So again, kind of how is the outlook for FY '27, new logo additions? Or is it all coming from these existing set of customers spending more? So, these are the large three areas. If you could please address that will be great. Thank you guys.
Rajan Sethuraman:
Raj, you can take the first question. I will address the second and third.
Rajan Venkatesan:
Srinath, to answer your question, the growth guidance that we put out at the beginning of the call is all in USD terms, not INR.
Rajan Sethuraman:
On Databricks, Srinath, the expectation is that the Databricks portfolio of work will continue to grow at about 60% plus. Last year, I think we went from between $11 million and $12 million to about $17 million plus, okay. This year, in fact, it should accelerate more on the back of the points that I made at the beginning of the call. There is good traction. There is a lot more engagement. We are talking to all the right people, the senior people. They are bringing us into their QBRs. When they do their QBRs, they call all of their account executives and salespeople, and we are able to showcase the solutions that we are building.
So, in general, there is good recognition. I talked about the professional services trust as well, right, where they could bring in partners. And even on that, I mean, professional services in Databricks context in the past has focused more on migration type of work because that's a fairly big chunk of where Databricks gets its revenue. But they are now starting to say in the recent conversations that industry solutions and building on top of the migrated data will be an important component as well. And that's where they see somebody like us bringing in more differentiation than the typical migration-only partners that they have worked with in the past. So, in general, I'm expecting that the trajectory of 60% kind of growth should continue.
On the Financial Services, it's going to be a combination of growth with the existing account, the large account that Raj has talked about, and then there is also a follow-up question, getting into the financial services. We're expecting that there will be momentum with that account going into this year. But even as we have started this year, I think we have signed up two other accounts.
And I had meetings with two more in the wealth management, asset management space as part of this trip. So, I'm expecting that there will be traction in all the spaces, payments, asset wealth management and also credit card as another space. Insurance is something that we are looking to get in. But the sectors where we are already present, I'm seeing good conversations in all of them.
Moderator:
The next question comes from the line of Rohan Nagpal with Helios Capital Management. Please go ahead.
Rohan Nagpal:
Just a couple of quick questions from my end. So, the first one, I think you said that you'll be able to recover 50% to 60% of the book that was eroded in your top customer by the end of the year. . Is that on a run rate basis? Or do you expect to recoup 50%, 60% of that for revenue that you booked this year?
And then the second question was, I missed a bit on Anthropic. Have you signed up with Anthropic as a partner on that professional services front or as their customer?
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Rajan Venkatesan:
On the first question, obviously what I meant was, we are looking to sign deals which will ensure the value of the deals itself, we'll ensure that at least we'll recoup 50% to 60% of the total annual contract value with these clients. Now depending on the timing of when we sign some of these deals, they could sort of have an impact on the revenue for the full year. But right now, as we speak for this particular client, the current projection is that we will be at least at 95% of the revenue that we delivered with this client for the last year. That is the target that we set out for this client on a full-year basis.
Rajan Sethuraman:
Yes. So, it's in kind of absolute revenue terms, just to confirm that point. Not just ARR.
Rajan Venkatesan:
Yes, that's right. Yes.
Rajan Sethuraman:
This is discussion with Anthropic as a partner, not as a client at this time. I don't know if any requests or anything that is there on that side. I mean the good thing, though, is that we are talking to fairly senior people. And in fact, the person with whom we are engaging, he used to be at Databricks before. And we have actually started helping him directly on his analytics requirements. So, there is a possibility that we might be able to extend. But right now, it's all limited to the partnership with Anthropic.
Moderator:
The next follow-up question comes from the line of Aditi Patil from ICICI Securities.
Aditi Patil:
My question was on margins. So, I think at the start of the year, we were expecting Q4 margins to be slightly higher, maybe 24.5% plus adjusted EBITDA margin. So, were there any unexpected cost headwinds in Q4? And given that we will be investing in AI and Databricks and other capability building, so do you expect the margin could be below FY26 levels in FY27?
Rajan Venkatesan:
So Aditi, yes, I mean, this quarter, like I said there were a few items on this, even when I did the EBITDA walk last quarter to this quarter, there were some professional charges that were incurred in relation to some senior level hiring that we are looking to do on the Databricks side as well as the AI CoE side.
So, there were some hiring costs or consultants that we had to engage to bring on some of these senior level hires. So that was incurred in this particular quarter, which did have, I would say, a marginal impact on EBITDA for this quarter. Adjusted for that, obviously, we could have been closer to the 24.5% that you spoke about.
Now in terms of what we would like to guide for the next year, Aditi, see, like I said, I think this year will be a year where specifically on the AI CoE as well as the Databricks side, we feel the need to bring in fairly strong leadership to drive conversations with clients. In fact, like I alluded to before, there are some senior level hiring that will be done on both these fronts, which will mean that at the beginning of the year right now, what we would like to guide. And of course, this is not adjusted for currency, there will be some benefit of currency. When we did the planning, of course, all this planning was done based on USD to INR conversion ratio of INR92. Right now, where we are, we are talking about INR95, INR96 or even higher levels for the rest of the year.
But when we've done the planning at INR 92-odd levels, what we planned for is an EBITDA between 21% to 22% for the revenue growth that we will deliver primarily on account of some of these upfront investments that we are making in the leadership hires on the AI CoE side as well as the Databricks
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side.
Aditi Patil:
So, on gross margin front, I wanted to understand the gross margin profile of the AI project, AI revenue versus traditional revenue, and then also you mentioned of some of the work moving to offshore and nearshore, so is there scope for improving gross margins further because of these two factors?
Rajan Venkatesan:
Yes. So, you would have seen that we started reporting the gross margins in the investor presentation also, we reported gross margins for the first time in line with what the feedback that we heard from you folks.
So, we started publishing gross margin number. So, for the full year, we reported close to about 50.8% of gross margins for the last year. When you compare this with the gross margins that we are seeing on the AI-led projects, we are seeing gross margins in the range of 55% to 58%.
So, it's a fairly broad spectrum, but depending on the size of the project as well as the nature of the projects, we are seeing that the gross margins on those projects are definitely higher at about 55% to 58%. We do see levers to improve gross margin by doing more nearshoring as well as offshoring work Aditi.
But the planning that we've done and the guidance that I gave out is without factoring in any significant change in the current levers. So, we are assuming the current sort of model to continue. So, to the extent we're able to execute better, we should see some upside on gross margins from these fronts.
Moderator:
We will take the last question from the line of Karan Uppal from Phillip Capital India.
Karan Uppal:
Just wanted to understand from the pricing perspective, how much of our work is time and material versus fixed price? And how is the trend of these two line items? Is T&M decreasing in the last few years? And second part of this question is that how much deflation are we seeing in the T&M line item because of AI productivity benefits?
Rajan Sethuraman:
Raj, you can go ahead. I will add in some color on that.
Rajan Venkatesan:
Yes. So in terms of our overall share of fixed-bid to T&M bid, so within T&M, again, we're including the way we internally review or classify contracts is pure staff or T&M contracts, and there is a concept of managed services, which essentially, again, while the pricing is headcount-based or capacity based and there is a fixed monthly sort of revenue that comes to Latent View, it is still, to some extent, based off a headcount number. And then, of course, you have the fixed-bid. We don't do a lot of outcome-based pricing today, but fixed-bid you have.
So today, the ratio of fixed-bid to T&M for us will be closer to about 18% to 20%. So, 20% from fixed-bid, fixed type of work and then T&M would be about 80%. But within that 80%, almost 65% to 68% of that would be in a managed services construct, what I mean to say is it's not based off time sheets that someone is entering in the client systems. These are essentially people where we are contracting for a certain level of capacity and the client pays us a monthly fixed amount for those resources there. So, there is no linkage to, one, the time that is clocked or, two, the sort of deliverables that we have to deliver as part of the projects. So that's how we internally view it. What was your second question, Karan?
Karan Uppal:
Yes. I was just asking what is the deflation in the T&M projects because of AI productivity if at all?
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Rajan Sethuraman:
I will add color to the first question also before I take up the second one. So, Karan, the plan though is to shift a bit more to both milestone and deliverable based as well as outcome-based. So that 20% that Raj referred to, we want to bump it up, okay. I'll tell you the reason. The reason is that productivity gains that you can get by building an agentic foundry or a suite of agents that can be deployed, along with the people who do the work or even productivity benefits by building a full-fledged solution, nonlinearity or even the pace at which we can do work, these can be accrued to us only if we contract differently.
If we continue to contract either in a managed services model or in a T&M model, then the benefit of having a suite of agents that are doing a bit of work, our own people being more productive, they will only accrue to the client. So internally, we have launched an initiative where we're incentivizing our project teams, in areas that are well understood where the process is known.
And we are able to build good bounded agentic solutions that we encourage the client to contract with us in alternate models, as opposed to just a managed services or a T&M model. We'll keep you posted on the results of how that is panning out. But internally, our teams have been incentivized to move a bit more to that model.
The second part of the question, there is no deflation on the way it works is that clients continue to engage our people. In fact, in many instances, they will be willing to pay a bit more. That's why Raj was referring to an earlier question, he was saying that gross margins could be higher if you're doing agentic or AI work.
But the expectation, of course, is that though they are paying more for the people, they will expect a lot more work to be done by them, okay, within the time frame. So therefore, in terms of margin, there is no deflation. There are no rate reductions or margin deflation that is happening. It's just that people will be more productive. So, more initiatives will get done with the same set of people and same capacity.
Karan Uppal:
Got it. Thanks. Thanks for the color. And all the best for FY'27.
Moderator:
As there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Rajan Sethuraman:
Yes. Thank you. Not too much to add. I think we covered quite a bit of the stuff. I mean this will be an important year. It will be an inflection point year, in many ways, whether we are talking about the whole AI agentic shift that is happening in partnerships with the likes of Anthropic and so on or whether we are talking about Databricks and the work that we are doing even with, say, CPG and Microsoft and so on. So, there is a lot more action that we expect to see on those fronts.
Of course, everybody is trying to understand how the entire agentic shift will play out. My own read on the matter is that there is going to be a need for a lot more complex design engineering of the agentic frameworks, which brings in all of the governance and transparency aspects that I have talked about. And we need good people who are able to marry not just the technical understanding, of how to use Claude Code or Codex or how to create agentic orchestration. But people who can marry that with the business process, the underlying risk and the transparency and the governance requirements and then bring it all together. So, in some sense, this will be a year where this whole forward deployed engineering concept that brings together many of those things will start seeing a significant play.
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We are gearing up for that in all ways on the capability, expertise, certification, hiring front as well as how we evangelize this, how we talk about this to our clients and show them what needs to be put in place so that they can get the benefits of it. So, we are expecting traction on all of those fronts.
Obviously, we'll keep you all posted on a quarterly basis on how this unfolds. But thanks for your wishes. And hopefully, we will continue to execute on the initiatives that we have set in motion.
Moderator:
Thank you. On behalf of Latent View Analytics Limited, that concludes this conference. Thank you, everyone, for joining us, and you may now disconnect your lines.
Note:
This transcript has been edited for readability and does not purport to be a verbatim record of the proceedings.
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