Kellton Tech Solutions Limited — Q2 FY26 earnings call

Call held 13 Nov 2025

Management summary

Kellton Tech delivered a strong Q2 FY26 performance with 11.1% YoY revenue growth and improved EBITDA margins. The company highlighted several strategic project completions and new client acquisitions, particularly in AI and digital transformation. While EPS was flat due to equity dilution from FCCB conversion, management outlined plans to deploy significant funds from FCCB and future QIP rounds for strategic acquisitions focused on enhancing capabilities and customer reach, targeting a 20% EBITDA margin post-integration.

Highlights

  • Q2 FY26 Revenue reached ₹300 crores, marking an 11.1% year-on-year growth.

  • EBITDA margin for Q2 FY26 improved to 12.6%, higher than the previous quarter.

  • Net profit for Q2 FY26 stood at ₹24 crores, with a PAT margin of 8%.

  • Secured key strategic partnerships, including a collaboration for a human-centric AI ecosystem under the EU-India Framework Agreement.

  • Successfully went live with a next-gen integration platform for a global food services company across 10 countries and a taxation platform for a Big Four consulting firm.

Concerns

  • EPS remained flat at ₹0.42 in Q2 FY26 due to the full conversion of FCCB round 1 into equity, increasing the number of shares.

  • Acquired companies may initially have minimal or single-digit EBITDA margins, requiring management effort to improve them to 20%.

Key financials

2 periods

Q2 FY26

  • Revenue
    ₹300 Cr
    YoY +11.1%
  • EBITDA
    ₹37.8 Cr
  • Net Profit
    ₹24 Cr
  • EBITDA Margin
    12.6%
  • PAT Margin
    8%
  • EPS
    ₹0.42
    QoQ 0%

H1 FY26

  • Revenue
    ₹597 Cr
  • EBITDA
    ₹73 Cr
  • Net Profit
    ₹46.8 Cr
  • EBITDA Margin
    12.3%
  • PAT Margin
    7.8%
  • EPS
    ₹0.9

What they filed

Q1 FY27: revenue up 7.1%, net profit down 4.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue271 279 286 295 300 +11%308 +10%314 +10%316 +7%
EBITDA32 34 29 35 37 +16%39 +15%25 −14%34 −3%
Net profit20 21 19 23 24 +20%25 +19%20 +5%22 −4%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

low confidence
The company reported several new client acquisitions and project completions, including a next-gen integration platform for a global food services company, powering an OTT platform for Asia Cup streaming, a new taxation platform for a Big Four consulting firm, and partnerships with a global packaging solution provider, a global logistics provider, a U.S. consumer finance company, an engineering and industrial enterprise, and a healthcare AI company.

Source: Prepared remarks

Capital allocation

high confidence
  • M&A Undisclosed Acquisition Targets Acquisition · Announced

    To beef up existing technology capability, acquire companies in deep tech or data-related fields for capability or customers.

    Acquired companies may have minimal or single-digit EBITDA margins initially, with a target to increase them to 20% within 6-12 months post-acquisition.

    So when we acquire, we acquire either for capability or for customers is what we look at. Okay, those are the two targets. ... What our target is, if you look at it, 20% EBITDA is our target, is what we want to go after. But with the new deep tech kind of companies, right, the margin could be in the single digits. I am talking about EBITDA level, right? But what the capability that we bring to the table is, once we take on, we can get better EBITDA. So whatever single digit, we will want to get it to the teams. You know, almost like six months to a year, we want to increase that to our teams.

Guidance & targets

M&A

  • Acquisition Fund Deployment M&A · within a year · High confidence within a year
    See, as soon as we get the money, right, we would like to deploy it within a year.

    — Niranjan Chintam

Profitability

  • Acquired Company EBITDA Margin Profitability · 6-12 months post-acquisition · High confidence 20%

    From single digits today

    What our target is, if you look at it, 20% EBITDA is our target, is what we want to go after. But with the new deep tech kind of companies, right, the margin could be in the single digits. I am talking about EBITDA level, right? But what the capability that we bring to the table is, once we take on, we can get better EBITDA. So whatever single digit, we will want to get it to the teams. You know, almost like six months to a year, we want to increase that to our teams.

    — Niranjan Chintam

Capital Raise

  • QIP Timing Capital Raise · a year or so away · Medium confidence a year or so away
    So to answer your question about QIP, at this point, right, the QIP round is probably a year or so away, whereas the FCCB round that we are doing is immediate, that we are doing at this point, and we would continue to look for targets.

    — Niranjan Chintam

What to watch in Q3 FY26

Acquisition Announcements

next quarter / within a year
Current Fundraising for acquisitions underway, first FCCB deployed
Target Announcement of specific acquisition targets or progress

Why it matters

Management committed to deploying acquisition funds within a year, and M&A is a key growth driver.

as soon as we get the money, right, we would like to deploy it within a year.

Risks & concerns

  • EPS Dilution from FCCB Conversion

    medium

    EPS remained flat at ₹0.42 despite profit growth due to the full conversion of FCCB round 1 into equity, increasing the number of shares.

    Management acknowledged

  • Low Initial Margins of Acquired Companies

    medium

    New deep tech companies targeted for acquisition may have minimal or single-digit EBITDA margins initially, requiring management effort to improve them.

    Management acknowledged

  • European Recession Impact on Growth

    medium

    Europe, a focus area for diversification, is experiencing a recession due to the Ukraine war, hindering growth to the desired extent.

    Management acknowledged

  • Geopolitical Uncertainty and H1-B Visa Policies

    low

    While H1-B changes and geopolitical uncertainty were raised, management stated no current impact on Kellton and noted easing H1-B rules and confidence in the American market.

    Analyst downplayed

Q&A highlights

4 direct
Impact of H1-B Visa Changes on Business Direct
We have a little over 400 people in the U.S. Of them, about 40 are H1s. And as everybody is aware, the existing H1s have been grandfather. It is only impacting the new H1s... our impact has been none at this point.

Clarifies that recent H1-B policy changes have not negatively impacted Kellton Tech's operations or staffing, alleviating a common sector concern.

Asked by Jaymin Soni

Purpose of Recent and Upcoming Fundraising Direct
This is the first time where we are taking money from outside entities. That is to be around one of $10 million that we are taking. ... for building our IP, ... for working capital. ... to increase our reach. ... looking at opportunistic buys of companies. ... the biggest chunk, we are setting aside for acquisitions.

Provides a clear breakdown of how the $10 million FCCB funds are being utilized and the primary purpose of future fundraising (QIP) for strategic acquisitions.

Asked by Jaymin Soni

Acquisition Strategy and Target Margin Profile Direct
So when we acquire, we acquire either for capability or for customers is what we look at. ... What our target is, if you look at it, 20% EBITDA is our target, is what we want to go after. But with the new deep tech kind of companies, right, the margin could be in the single digits.

Outlines the strategic rationale behind acquisitions (capability/customer focus) and sets an ambitious target for improving acquired companies' EBITDA margins from initial low single digits to 20% within 6-12 months.

Asked by Jaymin Soni

Geographic Diversification Strategy Direct
Europe has been our focus area, but as you are aware, Europe is pretty much in recession because of the Ukraine war. ... Canada is opening up. ... Asia Pacific is growing for us. ... Middle East is growing for us. ... I do not believe that anything is going to happen with the American market, despite all the talk and speculations that are going there.

Details the company's efforts to diversify revenue streams beyond North America, acknowledging challenges in Europe while highlighting growth opportunities in Canada, APAC, and the Middle East, alongside continued confidence in the US market.

Asked by Siddharth

3 min read 7 chapters

Detailed narrative

Q2 FY26 Financial Performance Overview

Kellton Tech reported a Q2 FY26 revenue of ₹300 crores, marking an 11.1% year-on-year growth. The company achieved an EBITDA of ₹37.8 crores, with the EBITDA margin improving to 12.6%, which is higher than the previous quarter. Net profit for the quarter stood at ₹24 crores, translating to a PAT margin of 8%. Despite the profit growth, EPS remained flat at ₹0.42 due to the full conversion of FCCB round 1 into equity, increasing the total number of shares.

H1 FY26 Consolidated Performance

For the first half of FY26, Kellton Tech recorded a consolidated revenue of ₹597 crores. EBITDA for H1 FY26 was ₹73 crores, with an EBITDA margin of 12.3%. The net profit for the six-month period reached ₹46.8 crores, and the PAT margin was 7.8%. The EPS for H1 FY26 was ₹0.90.

Strategic Project Wins and Operational Highlights

The company successfully implemented a next-generation integration platform for a global food services company across 10 countries and over 1,500 stores. Kellton Tech also played a key role in powering a leading OTT platform for the Asia Cup live streaming, demonstrating expertise in cloud-native engineering and low-latency streaming. Additionally, a new taxation platform for a Big Four consulting company went live, and the company signed an MoU for a human-centric AI ecosystem under the EU-India Framework Agreement.

New Client Acquisitions and Service Expansion

Kellton Tech partnered with a global packaging solution provider to expand its intelligent payment processing framework internationally, starting with the Netherlands. They were empaneled as a key technology partner by a global logistics provider, initiating offshore IT support services with plans to expand into AI-driven initiatives. New engagements also include a U.S. consumer finance company for AI-driven operational efficiency and a healthcare AI company for risk adjustment solutions, alongside a large-scale digital transformation for an engineering and industrial enterprise.

Capital Allocation Strategy: Focus on Acquisitions

The company is undertaking fundraising, including a $10 million FCCB round already deployed and a new FCCB round, with the biggest chunk earmarked for opportunistic acquisitions. These funds are also allocated for IP building, working capital, and increasing market reach. Management aims to deploy acquisition funds within a year, focusing on acquiring companies for their technology capabilities or customer base rather than just revenue.

Acquisition Margin Targets and Integration Plan

Kellton Tech acknowledges that acquired deep tech companies may initially have minimal or single-digit EBITDA margins. However, the company's target is to improve these margins to 20% EBITDA within six months to a year post-acquisition. This improvement will be driven by leveraging Kellton's existing capabilities, optimizing overheads, and realizing economies of scale.

Geographic Expansion and Diversification

To mitigate risks associated with market concentration, Kellton Tech is actively pursuing geographic diversification. While Europe, a focus area, is experiencing a recession, the company sees growth opportunities in Canada, Asia Pacific, and the Middle East. Management expressed confidence in the American market despite ongoing speculations, noting that H1-B visa rules are becoming easier, and Canada is actively welcoming H1-B talent.

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