1. At a Glance
When Krishna lifted Govardhan, villagers stopped worrying about the storm. When Kellton Tech lifts its quarterly PDF, investors start praying it’s not another “FCCB announcement.” With amarket cap of ₹1,068 crore, this smallcap IT hustler sits at ₹20.2 per share, a cool-27% return in one yearand-20% in three months— basically a treadmill stock that burns calories but goes nowhere.
The company’sQ2FY26results looked decent:Revenue ₹300 crore,PAT ₹24 crore, andEBITDA ₹37.8 crore, clocking aYoY growth of 10.7% in sales and 22.3% in profits. Margins? A modest12% OPM— the IT equivalent of eating plain khichdi when competitors are feasting on sushi.
ItsP/E stands at 12.3, way below theindustry average of 34.5, which might sound cheap, but in smallcap land, “cheap” can either mean “undervalued gem” or “kuch toh gadbad hai, boss.”
ROE is16.3%, ROCE is17.1%, and promoter holding is down to37.7%, because apparently, everyone loves FCCBs and warrants more than equity stability these days.
So, let’s decode this Hyderabad-based digital transformation story — equal parts tech fairy tale and financial thriller.
2. Introduction
Once upon a time, Kellton Tech was the cool underdog of India’s IT story — the one that promised “digital transformation” before it became LinkedIn jargon. Now, in FY26, it’s trying to reinvent itself again — this time withGenerative AI, FCCBs, and fund raises that sound like sequels to Fast & Furious.
In the last six months, Kellton has been in the news more forcapital movesthan for client moves:
- USD 10 million FCCB conversionin November 2025
- 55 lakh warrants issued at ₹126 each, raising ₹69.3 crore
- Proposals to raise up to ₹250 crore via QIP
- Board approval for FCCBs up to USD 40 million
If dilution had a fan club, Kellton’s board would be the president.
But beneath the funding frenzy lies a steady performer. Revenue has grown from₹1,098 crore in FY24to₹1,160 crore in FY25, andPAT jumped 21%. TheEBITDA marginstabilized around12%, suggesting that Kellton, at least operationally, is holding its ground.
The question investors are asking:Can a ₹20 stock dreaming of AI stardom fight off its own dilution demons?
3. Business Model – WTF Do They Even Do?
In simple terms,Kellton Tech helps other companies look tech-savvy. They provide everything fromagile development, ERP solutions, digital commerce, AI integration, IoT products, and human capital platforms— a buffet of services for anyone with a digital dream (and a billing code).
Their business splits into:
- Digital Transformation – 82% of revenue
- Enterprise Solutions – 14%
- Consulting – 4%
The company runs projects acrossFintech, BFSI, Manufacturing, Retail, Travel, and Government sectors, with major clients in theUS (82%),India & APAC (12.7%), andEurope (5.3%).
In essence, Kellton is like a desi IT Swiss Army knife — they can build your e-commerce engine, integrate your IoT sensors, automate your HR, and still find time to throw in a blockchain buzzword if needed.
They’ve also built proprietary platforms like:
- Audit.io– automates retail compliance audits.
- Optima– energy management with IoT, Blockchain, and AI.
- Thrive– HR automation for those who love dashboards more than employees.
- Kellton4Commerce– their e-commerce solution for brands that can’t afford Shopify Plus.
So yes, theydo a bit of everything. Whether theyexcel at anythingis still the suspense.
4. Financials Overview
Quarterly Snapshot (₹ crore)
| Metric | Q2FY26 (Sep’25) | Q2FY25 (Sep’24) | Q1FY26 (Jun’25) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 300 | 271 | 295 | 10.7% | 1.7% |
| EBITDA | 37.8 | 32 | 35 | 18.1% | 8.0% |
| PAT | 24.1 | 19.7 | 23 | 22.3% | 4.8% |
| EPS (₹) | 0.46 | 0.40 | 0.46 | 15.0% | 0% |
Annualized EPS = ₹0.46 × 4 =₹1.84At ₹20.2, that’s aP/E of
~11x, while peers trade at 20–40x.
Commentary:The numbers look like a well-behaved student: consistent, improving, but not top of the class. EBITDA is creeping up, PAT is steady, and margins are decent. But the real exam will come when AI integration projects actually start billing in dollars, not just in PowerPoint slides.
5. Valuation Discussion – Fair Value Range
Let’s play valuation bingo with Kellton’s data:
Method 1: P/E Multiple Approach
- Industry average P/E (IT midcap): ~25x
- Kellton’s current EPS: ₹1.84
- Fair value range = ₹1.84 × (15–25) =₹27.6 – ₹46.0
Method 2: EV/EBITDA
- EV = ₹1,131 crore
- FY25 EBITDA = ₹135 crore
- EV/EBITDA = 8.4x
- If fair range is 10–12x → Value range = ₹1,350–₹1,620 crore EV→ Implied equity value = ₹1,200–₹1,470 crore→ Per share =₹22 – ₹27
Method 3: DCF (simplified)Assume FCF ₹60 crore, growth 8%, WACC 13%Intrinsic = ₹60 × (1.08)/(0.13–0.08) = ₹1,296 crore → ~₹24/share
Fair Value Range (Educational)→ ₹22 to ₹46 per share.
Disclaimer: This fair value range is for educational purposes only and not investment advice.
6. What’s Cooking – News, Triggers, Drama
Ah yes, theannouncement buffet. November 2025 was basically “Kellton Month” on the BSE ticker.
- Nov 12:Q2FY26 results announced – ₹300 crore revenue, ₹24 crore PAT, five new client wins.
- Nov 1:Board approvedUSD 40 million FCCB issue. Because nothing says confidence like more debt in dollar terms.
- Oct 30:Selected byUNFPA(United Nations Population Fund) to buildGenerative AI applicationsfor global programs. That’s right, Kellton’s AI is now officially working for the UN.
- Sep 8:AGM approved raisingup to ₹250 croreand increasing borrowing limit to ₹750 crore.
- Jun 14:Announced55 lakh preferential warrantsat ₹126 each and a1:5 stock split.
The result? Promoters went from52.1% to 37.7% holding, while public
