Chennai-based LatentView Analytics has cited the concentration of revenues from a single market (the US) and top five clients as a major risk faced by the company. 

In the management discussion of its FY23 annual report, the company said 95 per cent of its revenue comes from the US and any adverse political, economic, and social environment may impact revenue generation.

The company, however, added that as part of the risk mitigation, it has made significant investments in Europe in FY23 and incubated a practice focusing on Asia-Pacific region with a view to reduce dependence on a single market. 

The company also added that it has made several senior management recruitment in the previous fiscal to focus on European business opportunities and drive growth. The company, however, said the US will continue to be its dominant market.

IPO documents

In its draft documents filed for IPO, the company cited the overdependence on the US market as one of the “significant factors”. 

According to its IPO papers, the contribution of the US market to LatentView’s total revenue from operations stood at 90.91 per cent in 2019, 92.33 per cent in 2020 and 92.88 per cent in 2021. It has further gone up to 95 per cent in the previous fiscal. 

LatentView Analytics reported its highest ever full-year revenue of ₹538 crore in FY23.

In the annual report, the company said more than 55 per cent of its revenue came from its top 5 customers. ‘A shift in clients’ preferences, priorities, and internal strategies can have an adverse impact on the company’s operations and outlook,” it added. 

LatentView Analytics serves about 60 clients, including 30 Fortune 500 companies in sectors such as technology, CPG and retail, financial services, industrials, and healthcare.

To reduce the concentration risk on top five clients, the company said it has identified a white glove list of Fortune 1000 or digitally native companies with an ability to spend more than $2 million in analytics initiatives. 

On a sectoral basis, technology contributed 69 per cent of its FY23 revenue followed by Industrials (12.5 per cent), CPG & retail (12.5 per cent), and financial services (8.5 per cent).