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    Kellton Tech

    KELLTONTEC
    Information Technology·13 Aug 2025
    Management Summary

    Kellton Tech reported a strong Q1 FY26 with consolidated revenue growing 12.8% YoY to Rs.296 crores and PAT increasing 13.5% YoY to Rs.22 crores. The company secured three significant client wins and launched its proprietary agentic AI platform, KAI. While standalone revenue saw a boost from hardware sales, profitability was impacted by lower margins on these sales, and the company plans to segment AI revenue reporting in the near future.

    Highlights

    5

    • Consolidated revenue grew 12.8% YoY to Rs.296 crores, with a 3% QoQ increase.

    • Consolidated PAT increased 13.5% YoY to Rs.22 crores, demonstrating strong profitability growth.

    • Secured three significant client wins, including a global beverages leader, a leading US healthcare insurer, and a premier Indian travel technology provider, focusing on AI and automation.

    • Successfully launched KAI, an enterprise-grade agentic AI platform, enhancing autonomous workflow management.

    • Achieved zero downtime during a mission-critical application migration for a large agriculture and food production enterprise.

    Concerns

    2

    • Standalone profitability did not increase despite a 15.7% QoQ revenue increase, attributed to lower margins on hardware sales.

    • AI revenue segmentation and specific profitability tracking are not yet established, limiting detailed insights into this key growth area.

    What Changed2

    vs Q2 FY26

    Guidance items3 → 0 (-3)Risks discussed4 → 3 (-1)

    Key financials

    Single quarter

    07 metrics
    1. 01Consolidated Revenue₹296 Cr+12.8%YoY
    2. 02Consolidated EBITDA₹35 Cr+10.2%YoY
    3. 03Consolidated PAT₹22 Cr+13.5%YoY
    4. 04Consolidated EBITDA Margin12.1%
    5. 05Consolidated EPS₹2.32

    Order Book

    medium confidence

    Execution

    order book is looking around 10 months

    "The order book provides approximately 10 months of revenue visibility."

    Source:
    Q&A

    AI Revenue Segmentation

    Next quarter or by end of Financial Year
    CurrentNot segmented or tracked separately
    TargetReclassified grouping with an AI-only revenue segment

    Why it matters

    Provides transparency on the growth and contribution of AI services, a key strategic focus for the company.

    Probably in the next quarter or so, we will start looking at to reclassify our grouping and come up with an Al only kind of revenue segment, we will look at that and get back to you if there is a realistic way of doing it, that is one.

    How to verify

    key_financials.segment_breakdown or detailed_narrative

    Risks & concerns

    3
    RiskSeverity

    Lower margins on hardware sales

    Standalone profitability did not increase despite revenue growth due to lower margins from hardware sales. — Management acknowledged

    medium

    Indirect impact of US tariffs on client spending

    Customers are being careful with spending due to collateral uncertainty from tariffs, though direct impact on services is minimal. — Management acknowledged

    medium

    Lack of specific AI revenue segmentation and profitability tracking

    AI revenue is not yet segmented, and specific profitability for AI solutions is not tracked, limiting detailed insights. — Management acknowledged

    low

    Q&A highlights

    4

    “the tariffs that is happening is more on the on the good side, and not the services side. There is no impact directly to us, there is always going to be an indirect impact. The indirect impact is that, every customer is being careful in how they spend the dollars. But what is helping us Gaurav is, unlike before for the digital transformation typically, the digital transformation initiatives were either done by the IT people, or let's say the digital officers kind of initiatives, whereas the Al part is now driven from the C suite.”

    Clarifies the direct and indirect impact of macro factors on the IT services business and highlights the shift in AI adoption drivers from the C-suite.

    asked by Gaurav Shah

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Q1 FY26 Consolidated Financial Performance

    Kellton Tech reported a robust Q1 FY26 with consolidated revenue reaching Rs.296 crores, marking a 12.8% year-on-year growth and 3% quarter-on-quarter growth. The company's PAT also saw a significant increase of 13.5% year-on-year, totaling Rs.22 crores. Consolidated EBITDA stood at Rs.35 crores, representing a 12.1% margin and 10.2% YoY growth, with an EPS of Rs.2.32.

    02

    Strategic Client Wins and Proprietary AI Platform Launch

    The quarter was marked by three significant client wins, including a global beverages leader for compliance solutions, a leading US healthcare insurer for security integration, and a premier Indian travel technology provider for backend AI engineering. Furthermore, Kellton Tech launched its proprietary enterprise-grade agentic AI platform, KAI, designed to autonomously manage workflows and integrate with enterprise systems for enhanced efficiency and decision-making.

    03

    Operational Excellence and International Recognition

    Kellton Tech demonstrated strong operational capabilities by successfully migrating a mission-critical application for one of the world's largest agriculture and food production enterprises to a modern platform with zero downtime. The company also gained international recognition by being invited to the NATO conference in Finland, where its project outcomes and ability to address complex client challenges earned praise.

    04

    Standalone Performance Driven by Hardware Sales

    On a standalone basis, Kellton Tech reported a top line of Rs.53 crores, reflecting a 15.7% increase over the last quarter. This growth was primarily attributed to a significant hardware component from a recently won Oil India contract. However, management noted that standalone profitability did not increase proportionally due to the inherently lower margins associated with hardware sales compared to services, resulting in a standalone EPS of Rs.0.28.

    05

    Navigating US Business Environment and C-Suite Driven AI Adoption

    Management acknowledged the indirect impact of the US business environment, including client caution on spending due to tariff-related uncertainties. Despite this, a strong positive trend was observed in AI adoption, with C-suite executives actively driving AI initiatives for cost savings and profitability. Kellton Tech is strategically engaging directly with CXOs on AI solutions, positioning itself favorably in this evolving market.

    06

    Future Outlook on AI Segmentation and Order Book Visibility

    While AI revenue is not yet separately segmented, management plans to reclassify its reporting to include an AI-only revenue segment within the next quarter or by the end of the financial year. They confirmed that AI-based solutions are margin-accretive. The company's current order book provides approximately 10 months of revenue visibility, and efforts are underway to further improve this metric.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.