Kellton Tech Solutions Limited Q2 FY26 Concall Decoded: Revenue up, dilution done, AI dreams funded by FCCBs

1. Opening Hook

While most mid-tier IT firms are busy blaming macro, visas, and clients for sluggish growth, Kellton Tech walked in coughing—literally—and still dropped a decent quarter. FCCBs converted, share count bloated, EPS stayed flat, and management basically said, “Yes, dilution happened, now let’s talk AI.”

Q2 FY26 wasn’t flashy, but it was confident. Revenue crossed ₹300 crore for the year, margins ticked up, and the word AI appeared more times than billing rates. The business story is no longer about survival—it’s about buying capabilities before the tech becomes obsolete again.

This concall wasn’t about numbers alone. It was about explaining why Kellton suddenly wants cash, what it plans to buy, and why margins may dip before they rise.

Read on. The optimism is loud, the chequebook is open, and execution will decide everything.

2. At a Glance

• Revenue ₹300 cr (FY run-rate) – Steady 11% growth, no drama.
• EBITDA ₹37.8 cr – Margins quietly improved to 12.6%.
• PAT ₹24 cr – Profits healthy, EPS unimpressed.
• EPS flat at 42 paisa – FCCB conversion did its thing.
• H1 Revenue ₹597 cr – Momentum intact, not explosive.
• PAT margin ~8% – Respectable, not brag-worthy.

3. Management’s Key Commentary

“FCCB Round 1 has been fully converted into equity.”
(Translation: Dilution done, please stop panicking.) 😏

“We are investing heavily in AI IP.”
(Translation: Cash burn now, relevance later.)

“H1B impact on Kellton is nil.”
(Translation: Panic headlines, zero P&L impact.)

“We are looking at opportunistic acquisitions.”
(Translation: Capability shopping, not revenue shopping.)

“Margins of acquired companies could be single digit.”
(Translation: Don’t expect instant profitability.)

“Target EBITDA remains 20% over time.”
(Translation: Trust us, we’ll fix it.)

4. Numbers Decoded