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    Kellton Tech

    KELLTONTEC
    Information Technology·13 Feb 2026
    Management Summary

    Kellton Tech delivered a robust Q3 FY26, demonstrating sequential growth in revenue, EBITDA, and PAT, alongside strong year-to-date performance. The company is strategically integrating AI across its services, achieving significant efficiency gains in outcome-based projects and enabling new business. The acquisition of Kumori Technologies has bolstered its ServiceNow capabilities and global market reach. However, the immediate translation of AI efficiencies into higher margins is challenged by client demands for shared cost benefits and varying client readiness for AI adoption.

    Highlights

    5

    • Revenue for Q3 FY26 reached ₹308 crores, marking a 2.7% sequential growth over the previous quarter's ₹300 crores.

    • EBITDA for Q3 FY26 was ₹39.7 crores, a 5% increase from ₹37.8 crores in Q2 FY26.

    • Profit After Tax (PAT) for Q3 FY26 stood at ₹25.5 crores, reflecting a 5.8% growth from ₹24 crores in Q2 FY26.

    • Earnings Per Share (EPS) for Q3 FY26 improved significantly to ₹0.50, up 25% from ₹0.40 in Q2 FY26.

    • For the nine months of FY26, revenue grew 11.45% YoY to ₹905 crores, with EBITDA increasing 13.56% YoY to ₹113 crores.

    Concerns

    2

    • Management noted difficulty in quantifying the direct positive impact of AI-driven efficiencies on margins, as clients often demand a share of the cost savings.

    • A majority of Time & Material (T&M) clients are currently not ready to adopt AI, limiting its immediate application and the full realization of its benefits across the client base.

    Key financials

    Metrics

    11

    Periods

    2

    Headline

    6
    • Revenue
      ₹308 Cr
      QoQ+2.7%
    • EBITDA
      ₹39.7 Cr
      QoQ+5.0%
    • PAT
      ₹25.5 Cr
      QoQ+5.8%
    • EBITDA Margin
      12.9%
    • PAT Margin
      8.3%

    9M FY26

    5
    • Revenue
      ₹905 Cr
      YoY+11.5%
    • EBITDA
      ₹113 Cr
      YoY+13.6%
    • EBITDA Margin
      12.5%
    • PAT Margin
      8%
    • Diluted EPS
      ₹1.4

    Order Book

    low confidence

    "The company secured 11 new client wins in Q3 FY26, including product engineering for a global technology giant, legacy modernization for a monolithic ERP, AI-driven orchestration for heavy engineering, and ServiceNow implementations for healthcare and telecom providers."

    Source:
    Prepared remarks

    Capital allocation

    1
    medium confidence
    CategoryHeadline
    M&A

    Kumori Technologies

    acquisition · closed

    Progress in Data Center CAPEX opportunities

    next quarter
    CurrentIn discussion/RFP stage for large data centers
    TargetSecuring new contracts or moving to advanced stages of engagement

    Why it matters

    This represents a new, large-scale growth opportunity for the company, and progress will indicate diversification and new revenue streams.

    We are still in the discussion stage, we are not at a proposal stage yet. We are responding to RFPs and we are going and presenting.

    How to verify

    detailed_narrative[title='Data Center CAPEX Opportunity']

    Risks & concerns

    3
    RiskSeverity

    AI-driven pricing pressure and margin impact

    While AI brings 20-30% efficiency gains, customers often demand a share of these savings, making it difficult to quantify or realize direct margin expansion. — Management acknowledged

    medium

    Client readiness for AI adoption

    A majority of Time & Material (T&M) clients are currently not ready to adopt AI, limiting its immediate application and the full realization of its benefits across the client base. — Management acknowledged

    medium

    Normalization of AI skill premium

    AI skills command a premium for a short period (approx. 1 year), after which the Indian IT industry quickly learns, leading to normalization of rates and reduced competitive advantage. — Management acknowledged

    low

    Q&A highlights

    5

    “The SaaS apocalypse that happened with the drop in share price values of all these SaaS platforms was, I mean, you can already see right now that things are improving and things are going back up. It was just a market reaction to something that Anthropic Claude released, right, recently. It released nothing but about 11 or 12 widgets or plugins, which are open source that seem to do a lot of stuff. But in reality, they are nothing but some workflow automations that was built about by actually logical steps going through.”

    Addresses analyst concerns about AI's disruptive potential on SaaS platforms and IT services, with management clarifying that the impact is more on efficiency expectations than outright replacement.

    asked by Jayaprakash from Axler Research

    2 min read6 chapters

    Detailed Narrative

    01

    Q3 FY26 Financial Performance Overview

    Kellton Tech reported a strong Q3 FY26, with revenue reaching ₹308 crores, a 2.7% sequential increase from ₹300 crores in the previous quarter. EBITDA grew 5% QoQ to ₹39.7 crores, and Profit After Tax (PAT) increased by 5.8% QoQ to ₹25.5 crores. The company's EBITDA margin stood at 12.9%, and PAT margin was 8.3%. Earnings Per Share (EPS) saw a significant 25% QoQ jump to ₹0.50.

    02

    9-Month FY26 Financial Performance

    For the first nine months of FY26, Kellton Tech achieved a revenue of ₹905 crores, representing an 11.45% year-over-year growth compared to ₹812 crores in the same period last year. EBITDA for the nine months was ₹113 crores, up 13.56% YoY from ₹99.5 crores. The EBITDA margin for 9M FY26 was 12.5%, an improvement from 12.2% in the prior year, and the PAT margin was 8%, up from 7.4%.

    03

    Strategic Focus on AI and Partnerships

    The company is strategically focused on leveraging AI and strengthening key partnerships, particularly with ServiceNow and Microsoft. Management highlighted the achievement of the highest level of Microsoft solution partner designation across data and AI, digital and app innovation, and infrastructure. The acquisition of Kumori Technologies has significantly deepened Kellton's ServiceNow expertise, enabling a higher partnership level and better access to global customers across the US, APAC, and Europe.

    04

    AI-driven Operational Efficiency and New Business

    Kellton Tech is actively using AI to drive operational efficiencies, reporting 20-30% efficiency gains in outcome-based projects, especially in areas like QA testing, documentation, and development using tools like CoPilot and proprietary KAI platform. AI is also enabling new business, such as a 4 million lines of code legacy modernization project that would have been cost-prohibitive without AI, demonstrating AI's role in making previously unfeasible projects viable.

    05

    Client Dynamics and AI Adoption

    Management noted a mixed landscape regarding client AI adoption. While AI offers significant efficiencies, a majority of Time & Material (T&M) clients are currently not ready to adopt AI, often explicitly requesting its exclusion. For outcome-based contracts, where AI is used internally, clients frequently demand a share of the efficiency gains, making it challenging to translate these directly into higher margins. However, management anticipates that market forces will eventually drive broader AI adoption among enterprises.

    06

    Data Center CAPEX Opportunity

    Kellton Tech is actively exploring opportunities in the data center CAPEX space, leveraging its deep expertise in both setting up and maintaining data centers. The company is partnered with a physical setup provider and is currently in the discussion and RFP stages for potentially catering to one of the largest data centers globally, positioning itself as a front-runner in this emerging area.

    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.