Kellton Tech Solutions Ltd
NSE:KELLTONTEC
Kellton Tech Solutions Ltd
NSE:KELLTONTEC
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Ladies and gentlemen, good day, and welcome to the Kellton Tech Solutions Limited's Q4 and FY '23 Earnings Conference Call. [Operator Instructions] I would like to thank you all for participating in the company's earnings call for the fourth quarter of the financial year 2023. Before we begin, I would like to mention a short cautionary statement. Some of the statements made in today's Con Call may be forward-looking in nature, and such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated.Such statements are based on the management's beliefs as well as assumptions made from the information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and the financial quarter under review.Now, I would like to introduce you to the management participating with us in today's earnings call. We have with us Mr. Niranjan Chintam, Chairman and Whole-Time Director; Mr. Karanjit Singh, Chief Executive Officer, India; and Mr. Srinivas Potluri, Chief Executive Officer, U.S. I now hand the conference over to Mr. Niranjan Chintam, Chairman and Whole-Time Director. Thank you, and over to you, sir.
Thank you, Jobin. Good afternoon. Good evening, good morning, wherever you are. Thank you for joining our Q4 and financial year FY '23 earnings call. I want to start with the financial highlights of this year as well as this quarter, and then we'll talk about the qualitative stuff of what we achieved over the last quarter. For this financial year ending FY '23, we have INR919 crores worth of revenue with an EBITDA of INR95 crores and a PAT of INR57 crores. This is without the exceptional item. Okay. We'll talk about the exceptional item in a short bit and give explanation there for that too. With the exceptional item, the revenue and EBITDA still stays the same.The PAT is a negative INR126 crores. Now going to the quarter numbers; the revenue for the Q4 quarter is INR243 crores with an EBITDA of INR17 crores and a profit of INR7 crores so earnings per share for the last quarter is in a INR0.12. That's what the earnings per quarter. For the whole financial year, the earnings per share is INR5.51 that is without the exceptional item. With the exceptional item, it is a negative INR13.56. Now, lots of people may have questions about what are the exceptional item? Exceptional item, nothing but the goodwill that we have been carrying on our books. As you are all aware, we have done multiple acquisitions over the last few years, and that has been sitting in our subsidiaries overseas.We had three subsidiaries where this goodwill is sitting. One is Kellton Tech Inc., which is a U.S. entity; Kellton Tech Solutions Inc., which is another U.S. entity and Kellton Tech Solutions, Ireland. So that is where all this goodwill has been sitting. And also, I've been talking about over the last 1, 1.5 years we're talking about One Kellton. So since we launched the One Kellton, the brand values that have been sitting as goodwill into our books have no value anymore because now we are only projecting Kellton and not marketing the prior brand that we acquired.So our auditor has recommended -- we mentioned that we also hired an external consultant to help with us with this what should we do about it? Auditor has recommended to do a complete write-off instead of amortizing, which means that every quarter or every year, we could have taken that instead of that effect, let's do a onetime write-off. So we are done with it. And that is where this exceptional item of INR184 crores or $22 million has been written off completely. And that is why you see our whole year has turned negative. This is a onetime write-off. Now completely all the international or at the consolidated level goodwill has been written off. Our ratio should start looking better and our balance sheet size has shrunk. I have been talking about looking at it and also I said we have hired a consultant in the last earnings call, too. We have been informing you when questions are asked of what it is that management is thinking about.And now the Board, the auditors, the audit company all sells that this should be a onetime write-off and we have written it off. Now, talking about the customer acquisition over the last one year; we have -- last quarter, sorry, there's about eight new customers that we acquired during the last quarter and about 30 over the last year. Also operational highlights, Kellton has set up a Kverse Customer Experience Center in Gurgaon. So a customer can visit us and look at and get a feel for the kind of work we do live with devices, IoT devices, with presentations, with AI-enabled devices, all that they can experience there. So that is an achievement that we did last quarter.Also, Kellton has been recognized in the SME space by Zinnov Zones, that was the first foray into some of these analyst reports, and we have come out very -- as a leader in that space with the big boys that are out there. So that's a big achievement for us. Hindustan Times has recognized Kellton as one of the leading companies in Blockchain -- so that's another prestige achievement that we have.Now with that, I would -- I would ask Karanjit to talk about the AI. I know everybody is curious about what Kellton's strategy or what it is that Kellton will be doing in the AI part. We have been doing lots of research into it and Karanjit will talk a little bit about that. And then I'll hand over to Srini to talk about some of the major hires that we made in the U.S. that would help us grow for the next years to come.So with that, Karanjit, can you talk about the AI world, what we've been working on? And how soon we'll be coming up with an outward-looking strategy while an inward looking strategy we already have in place. Go ahead, Karanjit.
Thank you, Niranjan, and hello, everyone. So as all of you would be keeping track, there has been a lot of excitement with the whole ChatGPT thing with generative AI. And there is obviously -- it will go through its own hype cycle. But all of us have -- it's a very exciting development as far as we see this. And Kellton obviously, one of the things that sort of defines us is basically working with the latest cutting-edge technology. So as Niranjan said, as soon as this whole ChatGPT and Generative AI has come up we have teams to start looking at it. And in fact, we conducted internal hackathons to figure out of course, first to get everybody excited and also to get a little bit -- come up with ideas.And then we went through a process of selection because that will also help us figure out the nice use cases that we have. And then as -- so we have combined a lot of list of use cases. We have also started having combinations with a couple of our customers. Without naming them, I can say that there were at least two or three customers where we are having active conversations where we are helping them or working with them on seeing -- on basically figuring out use cases in their domain, where they can actually use Generative AI effectively.At this point, as Niranjan said, this is all something that we are working internally. So we have a fair idea -- team that is working on it. And we are trying to now refine and also we have done [indiscernible] little bit. We are now in the process of basically refining that strategy, analyzing it and then go out to market with this strategy.Thank you, Niranjan. That's all I had.
Thank you, Karanjit. Srini, do you want to talk about the major hires we made in the U.S. so that people get a feel for what's happening.
Sure. Sure Niranjan. Thanks. An extension to what Niranjan mentioned about the One Kellton initiative and the strategic nature of our growth plan, we have put in place to execute some of these initiatives, and we have started both hirings to make this possible. We have hired a couple of VPs, a couple of AVPs to support us and one of the hires has been a VP for Strategic Alliances and Products based out of Bay Area, California, and he will be driving the charter for developing and scaling new strategic alliances and sell with sell-to and sell-through model and leading the go-to-market for our software products, IP, platforms and accelerators.Another big hire that we have done also joins us as an AVP for digital and IoT platform based out of Seattle, Washington. He will be leading our foray into digital and IoT platforms and solutions focused on sectors like healthcare, fitness, automotive and industrial. These are the two major players on -- from a marketing, sales, business development, you may call it, to execute. And to support them, we have hired a couple of systems and enterprise -- architect also based out of a West Coast. And we will continue to make the hires to support the [indiscernible].
Thank you Srini. In addition to whatever we did in U.S., there are some strategy has been made in India, too. We also have a Head of Sales that a new person has joined us. So we have been doing a lot of aggressive hiring when it comes to sales and sales enablement part of it, while the rest of the teams, the developers and we have slowed down hiring based on what we are seeing out in the market, the customer feedback that we're getting, where there are freezes -- so we are mindful of that, and we are working with whatever it is that we are noticing in the industry as well as what our customers' feedbacks are coming.So we will continue to make investments into the new technologies like AI, IoT-enabled AI to cloud to cybersecurity. All those are key areas of focus for us, and we will be continuing to make investments when it comes to both sales and [indiscernible], like I said. And if we require some strategic people to -- for execution part also, we have been making hires.With that, Jobin, can you open up for questions?
[Operator Instructions] The first question is from the line of Aman Vishwakarma from RoboCapital.
Just a couple of questions on -- so are we looking in the 24% EBITDA margin guidance that you have given?
So we have -- the last quarter, as you are aware of the numbers that we have presented, Aman. So we would be -- that's our aspiration. We want to get to that. But with that said, right, with everything that is going on in the industry, we have to increase the salaries. As you know, despite whatever that economy is slowing down in the Western world, the talent pool is still limited. So some of the numbers, the differences or actually this reduced EBITDA margins that we had for last quarter is related to our annual increments that we gave in January of every year. So there was a big bump in our cost there across the world that we had above.So that's the reason why there's a reduction. While our bill rates have not gone up. And because of the customer hiring freezes, customer own challenges, right, we cannot increase the bill rate to the extent that we wanted to. So the number mismatch is there when it comes to what we are charging versus what our costs are, that arbitrage, as I think probably everybody is facing an industry, we are also facing similar pressures when it comes to cost increases, but our bill rates are not increasing to the extent that our cost is increasing.So yes, we still want to target that. But with that said, right, with the new technology focus that we have gone into, hopefully, right, some of the productivity increases that we can get out of using AI, ChatGPT, Generative AI, all those kind of tools, we should be able to squeeze some additional margins over the next few quarters. This quarter is probably going to be a little bit better than what we had last quarter, but going forward, we'll be in a much better shape.
Got you. And next question would be on the order book. And so what is our order standing as of now? How much is the order book?
Typically, we have close to 8 to 9 months of order book backlog that we have into our books. Exact number, I don't have it top of my head, but what the normal every year that we have, we have a similar kind of 8 to 9 months' worth of order book.
[Operator Instructions] The next question is from the line of [ Rajesh Mundra ], an Individual Investor.
What is the target of -- revenue target of company at this time for three months -- three years angle?
See, we still want to, like we talked earlier, right, our aspirational number is about $200 million. Today, we are $110 million. We still want to be at the $200 million target that we have put [indiscernible]. And I think we can still achieve it if -- unless some major disruption happens, right? Europe, as I spoke in earlier quarters still has been a challenge for us. But what we are seeing is early signs of some green shoots coming out. Pipeline is increasing. So hopefully, with this new technology implementation that we are going to be -- we have started and also that we've doing now we hope that we can get a lot more revenue coming in, pipeline building up, order book building up. So all that -- but the three-year target is for us still $200 million.
[Operator Instructions] The next question is from the line of [ Bumick Shah ], an Individual Investor.
Yeah, no, my question was also in that line only, which you answered for Rajesh, actually. So in a guidance for this financial year, this financial year going on in terms of revenue growth and in terms of our topline sales growth.
I don't want to give a guidance for this quarter -- this year, sorry, Bumick. The reason why I say that, as you probably have noticed that Germany is under recession now. There is going to be a cascade effect. We don't know what it is going to affect the Western world, which is primarily our revenue where we're getting 80% of our revenue comes from the Western world. So everybody is facing a risk of recession. So I don't want to give a guidance and be wrong with it. I will say we will have some growth for sure. What it is that today, I don't want to give a guidance.
Okay. So -- but we will have growth on what we did on last year. That will be for sure, right?
I mean, there's no guarantees but that is our ambition and goal that we want to get to. Yes.
Because we know that actually, as we speak, actually, I have been on a con call to some other IT companies as well, actually, they have been guiding on the guidance on a very -- not on decline actually. They are guiding very well actually. So they are very much confident of having the good growth even though the market is in turbulence actually. So that's why I was a bit perplexed.
See, so there's a marginal growth. If you've seen all IT companies for last quarter, we did much better than many of them, if you look at last quarter revenues, probably, right? So everybody's revenue has -- growth has fallen, okay? So I'm wondering where you're getting the news that, hey, it's going to be a great growth, right? It is going to be some growth that we will get to. But I don't want to give a guidance just exactly how much to go to growth is going to be. We are -- we did more than what other people did -- most others rather. And we were hopeful that we -- we want to do better job than others. But again, there is a risk of recession that people are still talking about. Hence, I cannot give guarantees. That is the point I was trying to make.
[Operator Instructions] The next question is from the line of [ Devdat Gowda ] from [ SBL Finance Limited ].
[Technical Difficulty] So Niranjan, since last one year we are doing [indiscernible] -- so is that completed or still in progress.
End of it is this goodwill write-off, we have done.
Okay, okay. And even about the write-off something $20 million EBIT, right? I mean individual investor so how it will impact to the -- will it impact to [Technical Difficulty].
Can you mute yourself because I'm getting bad noise from your phone. I'll ask the question. Okay. So see, the goodwill is a balance sheet effect, right? It is a nominal entry that we have to pass through P&L. It has nothing to do with debt. Any time we do a write-off of goodwill, it is passed on through the P&L and then hits the balance sheet. But end of the day, it's a balance sheet item, not really a profit and loss item. We are operationally still profitable, and we will continue to be profitable. It's just that when you do these kinds of [indiscernible] we pass through P&L, hence, you'll see the number, big number, saying that, okay, stays negative for last quarter or for the whole year, which is a nominal part of it, not every -- in real cash terms, right, we are positive.
Okay. [Technical Difficulty].
No, it won't be there. It's a onetime write-off. We're done with it.
Okay. [Technical Difficulty].
I cannot comment on the stock price, right, that is something that's outside my control.
[Technical Difficulty]
We have the next question from the line of Aman Vishwakarma from RoboCapital.
Yes. So my -- this time my question is about the U.S. business. So what sort of exposure do we have in terms of revenue percentage from the U.S.?
80% of the revenue comes from U.S.
80%. So that's the U.S. number. So are we planning on reducing that sort of exposure?
We have been trying. That's one of the initiatives we launched in Europe that we have not been successful, but now we have retooled to change the leadership in Europe, and our pipelines are increasing. So yes, and also, we have made for in the Middle East, and we are making deep investments into Middle East, hoping to diversify. But as you are aware, right, U.S. in a dollar term spend the most in IP, yeah. So there is a concentration there. Yes, there's a risk there too, yes, you're right.
Actually. On one of the previous questions, you also said that you weren't able to pass on the cost as much as your expenses grew. So I mean when the U.S. is undergoing such a recessionary pressure there. I mean how do we see that? I mean how can we even expect to pass on the cost to the U.S. plants then?
You are right. That's what I was saying, we were able to pass on some cost but not all of it. Hence, the margin squeeze that we have. So the only way to improve that is by increasing our productivity. And these new technologies coming in, AI, the generative component of it, the ChatGPTs of the world are going to help us increase productivity, which is what currently we were talking earlier, where we're saying we're trying to squeeze more out of our [indiscernible] without hiring, right?So we believe that we can get more productivity out of our existing engineers thereby, yes, the cost will not be -- will not be to the customer, right? What happens is that we are able to quickly turn around a solution to them or launch a product, what used to take in a month, maybe in a few weeks, we can launch. So these are some of the things that we have already started working internally. And like Karanjit was saying, we already are talking to customers to do their work using some of these tools to help launch products much faster. So the margin should improve is what the point is.
Okay, fair. And you also said that I think you guys tried to expand in Europe. So what went wrong there exactly? If you might brief me a bit about it.
It's a leadership issue that we were hoping that we had some strategic hires there that did not pan out. So we have retooled our leadership there -- reengaging. Europe is not an easy market like compared to Americas. So it's a learning curve for us. And I think we learned the lesson now, and we are doing a much better job of building the pipe now compared to earlier.
Okay. But are our products ready to cater to the Europe market or do we have still work?
We are a services business, yes. So we have a -- I'm going to use the word nearshore development shop, which is required for Europe in Poland. So we have all the tools, let's put it that way, right? We have all the tools that are needed. It's just that our strategy did not work out, and we have changed the strategy, changed the leadership, and we have now seeing some signs of increase, and we're going to redouble it. We have -- now we have all these analysts that have given us the leadership position. That also is helping. And we are going to get more analyst review and get ratings that way too. That will also improve our credibility all over the world. So we are doing all the things that are required. It's a matter of just customers accepting and giving us the business.
Okay. So it was more of a customer issue and not your service issue, right?
It's more of a what, I'm sorry, you broke up there.
It's more of a customer onboarding issue rather than your service issue, right? [Technical Difficulty]
Right. We were not able to sell, right? It's nothing to do with us not being able to deliver. So we have successfully delivered many, many projects, including in Europe. It's just that acquisition has been a challenge. The customer acquisition has been a challenge.
We have the next question from the line of [ Sanjay Kay ], an Individual Investor.
So first of all, congratulations to your team. I mean it's a really good increase in top line. I mean, compared [indiscernible] the company is a good increase. So great work on the revenue side, definitely, the impact on the bottom line and as you already mentioned the reasons for that. Any more elaboration you want to give like what are the initiatives you are taking to increase the bottom line or margins other than productivity? I mean are you going to introduce more of the freshers, low-cost resources and increasing more managed services compared to professionals, how things are basically going to shape up in the coming year?
Okay. So to answer your question, all the above, but I'll do more specifics beyond that. So typically, what happens is, right, when we hire versus when we start seeing results, it's about 6 months lag. That is how long it takes for a cycle for us to get business or get productivity of any delivery person or what you call the implementation person, right? So there is a lag of that, at least minimum one quarter, right? For us, we say, okay, two quarters, it's going to take before they start producing. So the cost pressure for the first 6 months and a half is going to be hire and then you start producing. Now to answer your question, how else we're going to improve? We're going to use the tools that we talked earlier in the earlier conversation where I said in the AI part of it to increase productivity.So that would give us additional margins that we can get. Regarding your question on pressures, yeah, it's early days. We typically hire -- last year, we hired about 200-plus freshers. And this year, we haven't come up with a strategy yet for this year. The reason is we're just being mindful of what is happening all over the world and the economic situation. And we are, every day, readjusting, retooling ourselves to cater towards what we are seeing. So yes, there will be hires for sure. How much or how many we don't know yet.
Sure. And other point about this, the new business, what you're getting, like how is it -- is it more managed services, more professional services? And is that mix?
We would be doing more of the services, but we are getting into what we call the platform play. So when we do the platforms that will give us a faster implementation. It's not a product sale mind you. It's a platform side of it. And then using that, we should be able to launch quicker solutions to our customers with better margins. What used to take months, probably will take a few weeks to probably -- a couple of months versus a 6-month cycle that earlier that we are doing. So we're doing all these different strategies to increase that. We are not into managed services at this point. The managed services business is a commodity play. And we just -- what value we add there, we don't see it, but it will give us a top line, but bottom line is still probably less than what we can get from a services versus a managed services part of it.
Sure, sure. And one more point about -- in your last call, you mentioned that you will be having maybe discussions with analysts and how to create more coverage and more visibility of your company among your investors. So any such initiatives are you going to take because I'm not seeing any much activity in last quarter at least. So are you going to have more maybe meets with the analyst or more meetings with investors and all?
So we are talking to analysts, I think [indiscernible] is one of them that we talked about, right? And ISG is another one that we talk to. We're trying to get up one by one of the chain, try to get to as many analysts. But if you're talking about the stock market analysts or the fund managers, that we have not done yet. We want to get all of these third-party authenticating our capability first done, and then we'll go talk to the stock market and fund managers point, probably a couple of quarters from now.
All right. And you just mentioned that the coming quarter is going to be bigger than last quarter, which is Q4. So now you're seeing that mostly the Q1 onwards, you will be seeing more improvement into your [indiscernible] performance going forward like from Q1 to Q2 and Q3 and like you see that's what?
Like I was talking earlier, where I said, right, [indiscernible] when we start seeing revenue and our -- is about 6 months. So that is the reason why I'm confident that our numbers should look better while keeping the costs the same. Well, we will continue to make investments. Don't get me wrong. We are making investments, hiring people to help us with this new AI part of it with IoT -- AI-enabled IoT that Srini talked about, how do we sell that to the healthcare side of it, how do we sell our capabilities [indiscernible]. So there will be some investments made, but our costs will not be as significant increase as what we did in the last quarter and the quarter prior, where we were what we call a front-loading it. That's the word we normally use internally. We are front-loading our hires so that our numbers look better as the quarters go on.
The next question is from the line of [ Shan Nawaz ], an Individual Investor.
A few of your commitments, sir, I want to congratulate you. One, you have told you are going to remove that cancer of goodwill, which is there in the book. So that is being done. And I have seen the market today. So that reaction is able also come, okay? Second is about like performance on revenue that also I want to congratulate you but the sweet 16 has become [Technical Difficulty] I was expecting something more than sweet 16, but to be honest -- very honest. That was my will -- wish. Sir, actually, now many of them asked the questions that now hopefully, we are going to [indiscernible] better. But I have certain questions. One is like when you said 9 months order book, so I should multiply with Q4 number, like whatever you have given the Q4? Finally, if I multiply, order books shall I multiply by three?
Yeah, so the 9 months, also we'll talk about for the whole year, right? So that's how it comes, yes, you're right.
Okay. And what I'm saying you said for 9 months order book you're having. So you have done INR243 first thing, INR240, INR243. So is that multiplied by three is the order book you have? Similar kind of? I should multiply -- that 9 months means what I should understand basically. That is not clear -- the relative.
The best way is to take the whole year and go with 9 months, instead of doing it like that, right? So that average is out, right, okay? So that is the book that we have in place. And it's probably around 8 to 9 months, right? It's not exactly 9 months. It's somewhere around there [Technical Difficulty].
Yes. So the 2023-'24, the wish list in last meeting, you said is going -- you have the wish list of 20% EBITDA, right?
Yes. That is the target that we are going?
We have done 7%. 7%, even your -- some of your peers like [indiscernible] kind of people they are also doing 20%, 22%, sir.
So we -- again, I told you, right, we frontloaded our costs. [Technical Difficulty]
Sir, in your balance sheet, you have written -- announced payment of INR45 crores, okay? And you have borrowed some -- I think you have borrowed the company to pay that. If I see the cash flow statement. So can you elaborate what is the announced payments you have made, whether you acquired some company for which you have made some [indiscernible] payment or what is exactly announcement payments [indiscernible]?
So this was an acquisition that we made about three years back -- little over three years back, okay? And there was a balloon payment that was due. There were a lot of negotiations going back and forth. And finally, we agreed on a number and we paid that out. So that's the reason why you saw the amount of earn-out that was paid out in our cash flow statement and as well as we had to borrow some money to pay that out. We didn't have enough cash to do both, right, invest in this growth as well as -- to pay out the earn-out -- and that is number -- sorry, go ahead.
Yes. That acquisition, what is addressed three years before. So you are showing that revenue also in the reporting or you will show [Technical Difficulty].
It's already included in the revenues. Revenue is already included. Yes. It has been included for the last three years.
Okay. For 100% of revenue.
Yes, 100%. We don't do any partial acquisitions. We always do 100%.
Only payment is the milestone you are making, correct?
Yes. Correct. Yes.
Okay. Okay. So sir, in the order win, you have written 8 new customers you have added. Okay. So -- and the only technical details you have mentioned in that, okay? Half of them I have not understood. So how is the [Technical Difficulty] the big order book you have, sir? Because normally, whenever any -- I was -- have invested some of them -- some of my money in some other companies also -- sometimes when they win some big orders, single offer. They tell the market or tell the environment around it is look, I am able to -- I'm doing such kind of large size of business. So it gives a sense that the capabilities representation. So how is -- out of the 8 customers, how is the size of the order book there? Single order, I'm not talking about the cumulative or the backlog that you have because you may not be giving that. But what is the single largest [Technical Difficulty]?
Shan Nawaz, let me answer that, right? So you're asking in the 8 new customers that you have asked. Initially, like I always talk about the order size is small, okay? So it's like -- I mean I'll pick one, right? You asked about this one. It's a $500,000 order, okay, that we got. But the next year, it is multimillion, okay? So that is how these new customers that come on board. Initially, it's a few hundred thousand dollars. And then over a period of time, they grow into multimillion-dollar orders.
Okay. So what is the single largest order you have received as a multimillion if you say any of customers?
Probably, I would say the largest order received is about $10 million.
$10 million, okay? So this is the largest size of the [indiscernible]. So sir, so now with this [indiscernible] Kellton as a team, can we see that 2020 [indiscernible]?
So, what is 2020, I'm sorry.
Can we see 2023 as our -- I mean, from the top line and bottom line [Technical Difficulty]?
Shan Nawaz because there's a recessionary pressure -- every part of the world expect India is booming. Okay.
So the number, sir, if I compare even with the same size of company, [indiscernible] and all, there's a deep change, correct, but you are doing 22%, 23% of.
I don't want to comment about them. I don't know the details of their companies just don't want to comment about them. I can tell you that from our perspective, we are open book. You can come see anything you want to see. So that part that I always assure, you're welcome to come see -- visit our office, see what we do and how we do it. I think some of, I guess, investors came and talk, they visited our offices, they got a tour and all the stuff. So love for you to come and see too. So beyond that, right, yes, we are doing the stuff that we need to do. And hopefully, right, we would start increasing our margins, our top line. If you believe that's something that we are not doing, we are all ears.We would definitely consider -- take it into our board, discuss and come up with a better way to do these things. We are hiring all the top senior guys that have gone -- been there and done it to help us in our growth. While some of the strategies did not work, many of our strategies did work. And it is a -- what was -- it's a work in progress, right? And we would get there. Unfortunately, right, every time we do some of these things, unfortunately we got hit with COVID, then now with the recessionary pressure that's going on, yeah, you could say that others are doing better, but I don't know what others are doing or the numbers are what they are. So let's just go from there. And leave it there. I don't want to go beyond that.
Okay. Okay. And last question, I will just leave -- employee strength, what is that employee strength as of 31st March.
I think little over 1,800 people.
The next question is from the line of [ Rahul Patani ], an Individual Investor.
I wanted to understand your segment-wise revenue in U.S. revenue we can generate from two regional banks U.S., real estate, which was mostly impacted.
So when you say segment, right -- are you talking about industrial segment or are we talking about?
Like banking, healthcare, travel and tourism what kind of segment-wise revenue [indiscernible] sectors?
I don't have it handy, Rahul. Let me just get back to you, okay? On that, while our guys -- our team is pulling that information out. So we do have some [ consolidation ] of revenues when it comes to the new-age customers. We have lots of revenue coming from banking, travel, hospitality. We have lots of them, including the [indiscernible] fintech kind of a business when it comes to the banking.
[Technical Difficulty] order book loss that has happened in the U.S. because of the recession scenario there?
Yeah. So there is a freeze. So what we have not lost -- let's say the new businesses that are coming in, they put a freeze on it. We have not lost anything on the order. They said, okay, we are not going to be doing the new initiatives that we were targeting for this year. So that is where we are. But whatever loss that we have is very small, not a big amount. So that's -- so new initiatives. I think a number of new initiatives that have been committed to is going to start in Q1. They didn't start -- I'm talking about calendar year. Calendar year, Q1, they're going to start in the U.S. and it got pushed by two quarters. Srini has a lot of [indiscernible] stories on these where we projected out something internally, and then we see that, hey, customer has put a freeze on it.
[Technical Difficulty].
Can you please -- can you just repeat the question? Your voice was not clear.
Your borrowing from debtors [Technical Difficulty].
So the borrowings is because of what we talked earlier with Shan Nawaz, it's an earn-out payment. That's why the borrowing has increased. Nothing else. This is about the same -- in line with what the revenue is. Typically, we have debtors of about 90 days. That comes through a one quarter kind of revenue is always going to be our debtors because the collection cycles take longer, especially in India, it takes longer. In U.S. also, lately, we have seen that some of the collections are taking longer than what we originally were projecting out. Hence, the debtors may have gone up. But typically, right, like I said, 90 days a quarter worth of revenue is what is in debtors.
Okay. And now that [Technical Difficulty] what is the impact that you are seeing overall?
See the positive impact from customer is now we are doing it with only one brand, not multiple brands, okay? The team is working more synergistically than what they were doing earlier. So we are able to [Technical Difficulty]. Sorry, go ahead. You're saying something?
Is there any software that you are coming up or any acquisition that you are planning on?
No, there's no software as such. We're not going to come up with software. We come up with what we call the platform, like I talked earlier. We are not a product company, okay? So with that said, right, hey, we are always building a lot of platforms. If we can package that into a product, absolutely, we'd love to do that. And we will do that.
Any acquisitions you are planning?
See, we are going to be opportunistic. There's no plan. If something comes along the way that is of interest to us, all the areas of interest to us, we would definitely consider it, but no plan as such.
The next question is from the line of [ Niranjan ], an Individual Investor.
I think we spoke a couple of quarters back. So the first question, I know we are running short of time. So I will quickly go straight to the point. It was mentioned to us that Kellton is now getting in touch with Adani Group to do some work. Yeah. Adani Group -- I exactly don't remember that. But then later on, we didn't came to know whether are we getting any regular projects from them or are you seeing some developments there with the Adani Group. I'm asking this because some Indian group and there is a lot of focus on that Group at this stage.
Let me -- yeah, so to answer your question, yes, Adani is a customer of ours, has been a customer for over a year now, okay? So we have been doing a lot of work for them. There is about a close to $2 million, $2.5 million worth of revenue that came in for last year with Adani, and we think that we're going to get similar kind of revenue going forward, too. So you are probably -- you could be asking, yes, they did go through cash crush when the Hindenburg report happened. But today, all the cash has been paid. There is no dues from Adani, okay? There's zero AR that are dining today. There was some cash crush and we did feel the cash crush, but they have been very good with us. They have paid promptly. Unfortunately, they went through whatever external report that came about. And for the short term, we felt that some cash flow pressure, but right now everything is done. We're over that.
Okay. So since now we have a good relationship with Adani and if we have -- mostly working with them on the airports project. Is it possible to have the Kellton brand on those airports wherever we are working with them, so that anybody -- now I'm trying to see how we can market since we have these big clients with us, how best we can market our brand.
Okay. So there's two different things, right? When I say airport, the project that we are tied up with Adani Digital and not Adani Airports or Adani Ports. We're not part -- doing that. So it's across the board that we are working on their digital solutions, okay? So one of the things that we launched is an app for airports. That is what I was talking earlier and not something in the airport. This is the one platform where they can do -- Karanjit, can you explain what that is, please?
Yes. So basically, what we are helping them with is basically creating a superapp, and that helps essentially the airports. And it's an app that [indiscernible] of course, if you keep the functionality will keep deepening because it's a superapp. But we initially it starts off with certain facilities, which is about typically what we will find in an airport app, which is basically you can monitor your flights. You can do some flight bookings and things like that. And then it is going to keep on adding functionalities related to all the services that happen, and there are some very creative teams, but I cannot obviously name them here and [Technical Difficulty].
Okay, fine. The question was more about since we are working with them building the superapp and all these things. Is it possible to add Kellton's name in those apps [Technical Difficulty].
Niranjan, let me answer that a different way in the Niranjan? So our brand in India is very well recognized, okay? The challenge is for us to get our brand recognition in U.S. and in Europe, even though that we get 80% of our revenue from U.S. and about 7% from Europe -- our brand is not recognized as such. Hence, our foray into these -- I'm using the word loosely rating, but these industry analysts that are rating us and saying where we are on that particular quadrant, right? So we are working through that to improve our brand positioning there. We are closely working with all of these -- [indiscernible] of the world, the ISGs for the world to get them to push our brand into their customers.So we are working with them. So that's the strategy we are following for the growth in the rest of the world. In India, our brand is known. So we -- I guess everybody knows in this particular industry, right? Probably I'm talking about probably -- the investors may not -- but in the industry where we operate, they know that Kellton can deliver on what they promise and have delivered on what we promised. We go bend over backward to do the delivery unlike many others who have walked away and they called us to go fix whatever they left -- wherever they left it off, okay? So we have done that. So from that perspective, we are very well known, okay?
Yes. Got it. Last question in the interest of time, since we have clocked INR243 crores this quarter, assuming that this would be our base from here would it be possible from your end to tell us what is the base expenses in a quarter, what is the base normalized expense that one should see for the Kellton business? I mean INR245 crores revenues yes.
Okay. You broke up there. So if I got some of the words were missing. So I'm assuming you're asking what would be our margins for the next quarter, assuming that it's a INR243 crore revenue. Is that a question?
Yes, exactly. And normalized expenses.
Yeah. So normally, I cannot give a prediction on that, okay? And I don't want to speculate on that at this point because that's going to the specifics that I cannot give out today, okay? So I just can't do that.
Ladies and gentlemen, that will be the last question for today. I would now like to hand over the conference to the management for closing comments. Over to you, sir.
Thank you, Jobin, and thank you, everyone, for getting on this earnings call. I appreciate all the questions. Hopefully, that I have answered and clarified all your questions and queries. Looking forward to talking to you soon again, either in the next earnings call or maybe in past call somewhere would love to have a further conversation with you. Thank you again.
Thank you. On behalf of Kellton Tech Solutions Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.