Kellton Tech Solutions Ltd
NSE:KELLTONTEC
Kellton Tech Solutions Ltd
NSE:KELLTONTEC
Price:
15.85
INR
-1.06%
Market Closed
Market Cap:
₹8.4B
Add Note
Add Target
Capture your thoughts and set a target
Decide at what price you'd be comfortable buying and we'll help you stay ready.
Based on
Margin of Safety
0%
10%
20%
30%
40%
50%
Your Price Target
Linked to
current price
· In Buy Zone
Loading
Note attached
Choose the stock you wish to monitor with a price target
Popular Picks
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
Bank of America Corp
NYSE:BAC
|
US |
|
Mastercard Inc
NYSE:MA
|
US |
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
Pfizer Inc
NYSE:PFE
|
US |
|
Nike Inc
NYSE:NKE
|
US |
|
Visa Inc
NYSE:V
|
US |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
Coca-Cola Co
NYSE:KO
|
US |
|
Verizon Communications Inc
NYSE:VZ
|
US |
|
Chevron Corp
NYSE:CVX
|
US |
|
Walt Disney Co
NYSE:DIS
|
US |
|
PayPal Holdings Inc
NASDAQ:PYPL
|
US |
Ladies and gentlemen, good day, and welcome to the Kellton Tech Solutions Limited Q4 FY '25 Earnings Conference Call. [Operator Instructions] I would like to thank all for participating in the company's earnings call for the fourth quarter of the financial year 2025.
Before we begin, I would like to mention a short cautionary statement. Some 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 management's beliefs as well as assumptions made from information currently available to the management.
Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decision.
The purpose for today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review.
I would now 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; Mr. Srinivas Potluri, Chief Executive Officer, U.S.
Thank you, and over to you, Mr. Niranjan Chintam, sir.
Thank you. Good evening, good afternoon, good morning, wherever you are. Thank you for joining our Q4 FY '25 earnings call, also the financial year closing.
So we'll first start off with the financial highlights, then we'll give client wins and then operational highlights.
So we'll start off with the financial highlights. For the financial year '25, we had a total revenue of INR 1,099 or close to INR 1,100 crores -- or INR 1,100 crores is what we should say, which is about 11.7% growth year-on-year.
The EBITDA is around INR 129 crores. And the net profit is close to INR 80 crores. The EBITDA margin was 11.8%. And the PAT margin is 7.3%. The earnings per share is INR 8.18.
Now coming to the quarter, INR 287 crores is the revenue. EBITDA is around INR 30 crores, and net profit of INR 19 crores. So the revenue is about 15.7% growth on a year-on-year quarter basis growth. EBITDA is around 10.5% and a PAT margin of 6.7%.
We also had 9 customer wins this quarter. Now I'll ask Karanjit to give information on the clients and then the operational highlights, too. Karanjit, can you talk about the client wins and the operational highlights, please?
Yes, sure. Thank you, Niranjan, and hello, everyone. So as Niranjan said, I'll first start off with the client wins. As we said, we have had 9 client wins.
I'll give you a little bit of color on what kind of wins these have been. So one of them is basically a marketing agency. They are trying to build a complete product. It's a very huge product that they're trying to build, which covers intelligent survey management platform. That's what they are trying to build, which covers the entire research life cycle. So all the way from creation, configuration, distribution, insights. And this has a fair amount of AI-driven question generation and logic. So we're building that. So that's one of the customers.
Then we have basically a customer where we have launched a strategic professional services engagement is what we have launched by deploying some of our SAP consultants, who are basically helping them with their AI capabilities. So that's kind of another engagement that we have signed off.
We are helping with the AI-driven modernization of a HR tech company, a European company. We're working with them to basically help with the modernization. And this is the whole end to end, right, all the way from HR to payroll to accounting systems.
Similarly, we have actually also won a deal with a global GCC, where we are helping them. We started off with a team that is going to help them harness AI-powered technologies to kind of manage their global community center operations in India.
We also have certain other solutions that we sold. One is in the -- we have sold advanced warehousing management solution to one of the leading companies.
And we are also helping one of the big IT services company and has a global intellectual property data platform by basically doing -- digitalizing it and also enriching the patent repository. So this is all sorts of things all the way from OCR to data cleansing to dataset labeling. So all of these are now kind of -- and all supported by AI-driven initiatives.
So that should give you a sense of the kind of deals that we have closed this quarter. Should I continue on with the operational highlights?
Yes, please, go ahead, Karanjit.
Yes. So on the operational highlights, I will talk about a couple of large projects that we have successfully delivered. One of them we would like to mention is a very successful SAP S/4HANA go live with a multinational client. And the challenge was the 24 -- 21 global entities. So these were all -- that went live. And in fact, we were highlighted in the -- by the client's CIO at the SAPInsider Las Vegas event in March, and also similarly, in their ASUG chapter in Dallas.
We basically also, for another very large client, we have deployed an AI-powered centralized fuel tracker management system. In fact, it has really to do with coal procurement in this case. But really, what we have done is something around bulk handling. So if you do bulk handling, it's a very specialized kind of thing that gets used in coal, chemicals, cement. So this is something, which was a big -- was a lot of challenge given the nature, so we successfully have kind of brought that onto an AI-powered system.
We also are executing -- we are presently executing almost $2.5 million project for one of the oil workers in India, where we're deploying a real-time monitoring system across about 75-odd wellheads. And this is a combination of IoT, analytics and cloud technologies. So this will be used in the 75-odd wellheads around, I think, 15 sites that we have.
The other one that I really speak about is about a global platform, OTT content management platform, that we successfully had to move from a legacy thing to a completely cloud-native architecture and we seamlessly moved them flawlessly. The transition was flawless. This such -- they address almost 33 million users at any time. Obviously, there has to be -- there is 0 downtime when we did this. And it almost handles like 52,000 hours of content, about 11,000 queries a second. So this was a very flawless kind of delivery that happened and we transitioned them with 0 downtime.
Similarly, if I were to speak about, we're also working with a global game development company and so basically helping them with an AI-driven digital resource management platform that will help them streamline all their staffing for their internal projects. So this will lead to like almost 65-odd percent of manual effort reduction.
So these are all some of the kind of operational highlights on the kind of projects that we won in the previous quarters that we have successfully delivered in the past quarter.
Thank you. Niranjan, over to you back.
Thank you, Karanjit. With that, then I want to open up for questions. So operator, can you please?
[Operator Instructions] We have our first question from the line of [ Ajay Agarwal ], an individual investor.
I just wanted to know what is the long-term vision of this company, 5 years?
So we want to be known for our, I guess, now that AI capability, right, is taking over, as you are aware, [ Ajay ], everywhere and everything is AI. Earlier, it used to be digital transformation, now it's a combination of data and AI including digital transformation.
What that people will coin in future, I don't know. We want to be known as a global service provider for the AI-enabled digital transformation of all solutions that are possible in scaling, starting from scratch. It could be greenfield or brownfield, retrofitting it.
We already started it. Today, what we're seeing is that pretty much any project that we are doing, everybody is talking about AI and saying, how do I get my process reengineered using AI? Or how do I -- I mean, I think one of the things that I'll let Karanjit talk about, one customer has told us -- Karanjit, can you talk about the customer where he said, he looks for 3 different things when it comes to the AI, what AI can do for him. Can you just talk about that? Karanjit?
Yes, yes, sure. So basically, yes, so I'll just step back a little bit, Niranjan, with your permission.
So basically, Kellton has always prided itself in basically doing the digital transformation company because always our vision -- that's been our stated vision statement, where we said that we help our companies to kind of be very successful with their business by being their digital transformation partner.
It pretty much continues just that everything has changed to AI. So we have basically, in fact, had -- so we had kind of reimagined ourselves in the context of AI because it is another -- almost like another -- it's almost like another transformational moment that's happening.
So with that spirit, we're sort of obviously engaging with a lot of customers. And basically, we've engaged with a customer where -- the insurance customer where we engaged a lot of the times, the engagements are around, hey, what can you do for us? So we basically kind of had those discussions and we kind of basically told them that here are the areas, right, so we can basically -- if you have basically -- so we have an offering on -- and this is very similar to what we used to do in the digital transformation world. If you already -- if you do not have a vision, then we can really help you in creating a road map for you, how should you lead into your digital transformation.
So similarly, we have an offering. The first offering, if somebody says that, hey, what should I do in AI? Then we have things like master classes and assessment and a workshop or visioning exercise that we can do that will help you to basically come up with your AI vision in your context.
The second is very few customers, right, they basically have come up with their own AI vision. So obviously, they know what is to be done. They have possibly work streams and projects defined. So in which case, we can help them implement those visions, right, like the digital platforms that we built. We will build an AI platform for you kind of a thing, right?
The third is that you could be doing something very, very core like ISV, right, I'm trying to build this project for a SaaS product. So obviously, we can help you translate all of that and help you with the core, right? We can help you everywhere from agents, LLMs and all the other cool stuff that are happening.
So these are the kind of 3 broad offerings and engagements that we do with customers based on where they are with their journey in AI.
And to your question on how do you see yourself in 5 years, just like we said, we are a digital transformation company. We would like to be the AI-first digital transformation company.
Thank you, Karanjit. To add to that, right, what are the customers looking for when it comes to the new AI or what -- some people are calling it industrial 5.0 is, hey, how do we increase our revenue and how do we increase our profit? And how do you engage or keep the customers engaged with us, right? Those are the 3 different things that we are working with our customers.
And that is what is going to be the future when it comes to this. So increase revenue, increase profits and keep the customer engaged. Those are the areas that we're working. Thank you, Karanjit, and thank you, [ Ajay ]. Anything else, [ Ajay ]?
Yes. See, basically, my question was more from the perspective of vision in 5 years. AI is the in thing now. It's essentially from how do you kind of transform yourself into the next Infosys or TCS in the next 5, 10 years.
So you have these big companies. How do you really compete with them to take a bigger share of that AI digital transformation journey?
Okay. So I don't want to be -- I don't want to name names, but I don't want to be those big companies, I'm going to be very honest there, right? But it's not what we're aiming to -- for when it comes to providing service to our customers.
Okay, we are talking about, today, we can stand when it comes to our capability with any of the big boys without naming them, right, including the large consulting companies. We have went head-to-head with the large consulting companies, and we have won.
Where we lose out is our balance sheet size, right, because they have access to the Board members, we don't have access to the Board members, okay? From that point of view, right, from a technical capability point of view, hey, we have known much -- our capability is much better than any of these big boys that you named, okay?
So you probably are looking for revenue numbers, but revenue numbers, I have projected out and said, right, we don't -- we want to be around the INR 200 million in the next 2 to 3 years, that is a core that we want to reach out and then expand upon it. okay? I don't want to project out what it's going to be the 5 years, but I want to talk about near term. But our growth is going to be aggressive and our profitability is going to increase.
As you have seen in the numbers, right, compared to what it was last year to now, yes, incrementally, it has increased slightly, but we are on the path towards that growth or the inflection point, you call it. We have just passed an inflection point, and you can see the efficiencies coming into the system, which will lead to increased profitability and increased growth in our revenue.
[Operator Instructions] We have our next question from the line of [ Prashant Pani ], an individual investor.
So just want to add the latest here. What is the reason like that our EBITDA margin is falling? And I'm not understanding with this revenue that other expenses is gradually increasing. So where do we stand on these things, I want to know.
And second thing -- yes. Yes, yes. Yes, yes, go ahead. Go ahead answer to me.
Okay. So EBITDA has not fallen. You probably are comparing quarter-to-quarter. See, quarter-to-quarter, there's always going to be slight differences. Look at the whole year where we were. We increased our EBITDA by 1%. Even the bottom line also went up. That's why I said we are the inflection point of growth, okay?
Just talk about this quarter, right? There was a lot of investments made in AI, retooling ourselves, which is what Karanjit talked about. While we were doing some specialization solutions to AI, now we are talking to industry-specific AI capability that we have built now in-house that we are going after, and that is yielding a lot of good results when it comes to that, right?
The second thing is we have an appraisal cycle in January. And typically, this quarter is always going to be slightly lower compared to other quarters. The reason being is that this appraisal kick in and a lot of people got raises. And our cost has increased, but our bill rate has not.
Over the next few quarters, you'll start seeing that this will start improving and you start seeing better EBITDA numbers compared to what we have for this quarter -- or the last quarter that we talked about, okay?
Now please go ahead with the second question.
Yes. So yes, you are telling like you are going to -- we are going to reach first INR 200 million revenue in next to 1 to 2 years. So you mean to say like by '27, ' 28, like we will be achieving that number?
We should be able to reach that, yes.
[Operator Instructions] We have our next question from the line of [ Pratik Daria ], an individual investor.
Yes, am I audible?
Yes, you are. Go ahead, [ Pratik ].
Yes. So you mentioned about the inflection point and the company is on a path of transformation with growing revenue and profitability. Can you shed light on what kind of levers will lead to that will be higher -- more clients, higher billings, newer products?
It's a combination of all of them to answer your question, [ Pratik ]. There are going to be higher billings when it comes to AI because not too many people have the ability or capability to provide, right, including all the other names that were plotted out there even though they're saying they have the capability, they have to this number of people.
But we have built so many agents now. Agentic AI is going to be the next big thing. We already have a platform on that and that we are working to launch some of these solutions around that. And we're seeing a lot of traction, which is what Karanjit has talked about earlier, too, where we had launched initiatives which are industry specific. And we are getting a lot of customer eyeballs and getting responses to our campaigns almost instantaneously, saying, hey, we want to know more about this, can you set up a meeting.
So there's a lot of traction and we deliberately took some time to build up this capability and now we have launched it out, and we are getting traction on that. And we believe that is what is going to yield to our increased profitability and also efficiencies have come in place, which is what we talked about earlier, too. So all that is going to lead to better margins and increased revenues.
Okay. Got it. And you mentioned about traction and new capabilities so will they be contractual in nature or there's a little bit more...
Your voice is a little bit coming -- it's not coming clear. Can you just repeat your last question?
Yes. Is it better now?
Still not better, [ Pratik ]. Can you use your handset?
Is it better now?
Yes.
So I wanted to check will the initiatives be project based or will it be more contractual in nature where you keep billing the clients and the financing offering that will increase the business?
I don't know what you just asked the question, but let me answer it as some pieces like that. See, what it's going to be is it's a combination, right? We are partnering our way through also when we're providing the solutions. And I think one of the things we announced, Microsoft, there are a couple of others that we're working, which we'll announce very soon.
So we'll have 3 solid partnerships that's going to enable to get us a lot of additional customers in that space that we are working. This is I'm talking about a combination of AI is what it is.
And again, like I said, right, I did not understand your question, I'm sorry. If you have a better connection, please do ask the question back or reconnect yourself and ask me the question, we'd love to answer that.
[Operator Instructions] We have a follow-up question from the line of [ Pratik Daria ], an individual investor.
Yes, [ Pratik ], sorry, I guess your connection was not that great.
Yes, is it better?
Still bad connection.
[ Pratik ], can we please request you to connect and join again?
Yes, is it better?
Still not better, [ Pratik ]. Your voice is quite muffled.
Okay. I'll join back, sorry.
In the meanwhile, we have the next question from the line of [ Brijin Mishra ], an individual investor.
Yes, I want to know the money that we have raised through preferential [indiscernible] through this commercial borrowing. So what is the purpose of raising the money?
Okay. So [ Brijin ], thank you for the question. And FCCB, I think we already announced that and we took shareholder permission, I'd be happy to answer that. The reason why we raised this FCCB is a combination of 2 things. One is to increase our working capital limits because we are making a lot of investment in the AI space. The second one is to invest in our subsidiaries overseas. It's going to be a combination of, again, working capital there as well as we are looking for some strategic acquisitions because AI is fast evolving.
What we know today is going to be different from what we know probably a few weeks down the road. So it's evolving at such a rapid pace, it's not easy to catch up, right? So we want to look at somewhere where we can make some strategic acquisition that helps us with these kinds of continuous [ refresh ], okay?
I'll give an example, right? In 2024, probably second or third quarter, they said agentic AI is going to come in. It's going to do a lot of wonderful stuff, but we are 3 years away. That was in 2024 second quarter. And now talking today, agentic AI is already here, it's already ruling the world.
Now those are the kind of stuff, the investments that we can make in those kinds of quick-evolving technologies is what we are looking at. And for that, we wanted to raise money because, hey, as a company, we can only invest to a certain extent. So we wanted to have a little bit of a war chest where we can invest in additional capabilities and by, like I said, strategic acquisition that helps us get that capability in this fast-evolving AI world.
As there are no further questions, I would like to hand the conference over to Mr. Niranjan Chintam, sir, for closing remarks. Over to you, sir.
Thank you, Manav, and thank you to shareholders for joining the earnings call and continuing to impose faith in us and have trust in our growth strategy. We are looking to grow and we are looking to, I guess, like I said earlier, we are at the inflection point. And now we are beyond the inflection point, I think you should start seeing growth from a bottom line and a top line perspective.
Thank you very much. I'm looking forward to talking to you in the next earnings call or AGM, whichever comes earlier. Thank you. Bye-bye.
Thank you so much, sir. On behalf of Kellton Tech Solutions Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.