® Risks Involved,
✓Client concentration : The company’s top five clients (all from the technology industry) accounted for 54 per cent, 53.7 per cent, and 54.7 per cent of total revenue in FY21, FY20, and FY19, respectively. Given that the company’s growth strategy hinges on its plan to increase its scope and service with its existing clients, any trouble in maintaining its relationship with these clients could put LatentView Analytics in a spot of bother.
✓ Intense competition : The market for data and analytics is very competitive, and it will only increase in the future, given the importance and use of data. The company faces competition from large and emerging enterprises, each vying for an increasing share of the customer’s wallet. To keep itself competitive, the company has to invest in all aspects of business, like, personnel, research, and development. Moreover, the drawback when competing with larger enterprises is the availability of financial resources and the broader and diverse service offerings of such enterprises.
✓ Constant updating of technology and digital solutions : The nature of the business is such that LatentView Analytics cannot afford to get complacent. It has to constantly keep abreast of the latest technologies and effectively use them for its clients. Moreover, it is susceptible to introducing new and better services by its competitors, which may make its offerings obsolete. Any defects, errors, or failures in the company’s offerings may also jeopardise the market acceptance of its products.
✓ Forex risk : As the company generates more than 95 per cent of its revenue from outside India, it is exposed to foreign exchange-related risks.
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