Latent View stock nearly triples; analysts say valuation is expensive but bullish on long term view

• Amid volatile market movement, Latent View IPO was like a boon for IPO investors as the stock nearly tripled in two trading sessions.
• Shares of the company surged 20% on Wednesday after delivering 170% listing gains on Tuesday.
• Analysts feel the valuations of the stock have become expensive with the continuous rally.
• The market capitalisation of the company stood at ₹11,597 crore.

While Indian and other Asian markets have been under pressure worrying about global inflation, Latent View Analytics IPO was like a blessing in disguise for initial public offering (IPO) investors. The IPO gave a blockbuster debut with 170% listing gains.

Moreover, shares of the data analytics company continued to rally on Wednesday by 20% and nearly tripled investors’ money in two trading sessions.

For those curious to know if this is the right time to buy the stock, analysts feel after a stellar listing, investors can avoid entering the stock at current valuation.

“Valuations look stretched even though the business model is good. Chasing the stock after having a fantastic listing is not good in this phase of the market. Listing price has more than doubled so this is not the time for retail investors to chase the stock. I would suggest investors to wait for one quarter results and watch for future guidance by the company,” Kranthi Bathini, director of equity strategy at WealthMills Securities, told Business Insider.

However, analysts are bullish on the long term outlook of the data analytics industry as they see future demand for such services to solve complex customer problems.

“The Latent view is a data analytics company and this industry is likely to grow by 18-20% for the next 3 years. The strong part of the company is that it will be one of its kinds among listed companies, experienced management, and quality corporate governance practices. The overall outlook is bullish but the valuations look expensive after a strong listing,” reportedly said Santosh Meena, head of research at Swastika Investmart while saying that long-term investors should hold the company in their portfolio.

The global data and analytics market is expected to grow at a CAGR of 18% from $174 billion in FY20 to $332.6 billion by FY24, said analysts at Investmentz Research. “Across industries, data and analytics are being leveraged by enterprises to guide business strategy and optimise spending decisions. Latent View is among the leading pure-play data analytics services companies in India,” said the report.

"Undoubtedly, the analytics industry holds enormous potential to drive business growth and profitability for the shareholders. When Infosys made its initial public offering, it signified the potential of the IT [information technology] industry. Similarly, this coming-of-age chapter of the analytics industry proves that there is an unstoppable opportunity for the industry. We are optimistic about the future of analytics in India and look forward to riding the wave higher than ever,” said Sunil Mirani, co-founder and chief executive at Ugam, an analytics company, in an IPO note.

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