Kellton Tech Solutions Limited

Technology — Software - Application · NSE

₹12.47+₹0.34 (+2.80%)

DalalBaazaar Score

69 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

Driven by micro-cap size, which brings thin liquidity, falling profits.

In simple words: Reasonable but unspectacular business quality, though profits are falling even as sales grow. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of Kellton Tech Solutions Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Kellton Tech Solutions Limited engages in the provision of digital transformation, ERP, and other IT services in APAC, Europe, the United States, and internationally.

IndustrySoftware - Application

SectorTechnology

Employees1,184

Annual revenue₹1,217 Cr

How does it make money?

Turns over ₹1,217 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 1,184 employees supports ₹1.03 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin11.6%

Net margin7.5%

Revenue / employee₹1.03 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

TATA CONSULTANCY SERV LTP/E 17.3x · ROE 45.6%

INFOSYS LIMITEDP/E 15.8x · ROE 32.0%

HCL TECHNOLOGIES LTDP/E 20.4x · ROE 24.6%

WIPRO LTDP/E 14.5x · ROE 15.9%

What is its competitive advantage?Little sign of one

Returns on capital of 14.5% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE14.5%

ROE11.4%

Peer median ROE32.0%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +33% while net margin moved -154% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+33%

Margin effect-154%

DalalBaazaar Score

69/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.52 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

68/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

88/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

7.5x

2Y Median

14.6x

28 monthly readings · mean 14.5x · range 6.9x–23.4x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 49% below its 2y median of 14.6x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 55% below the peer median of 16.5x.

vs. its own history

Cheap

14.6x median over 28 months · -49%

vs. sector peers

Cheap

16.5x median of 4 peers · -55%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

7.5x

P/B

0.89x

EV/EBITDA

6.0x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Cash generation is improving
Free cash flow is up 298% over 3 years.
Return on equity is rising
ROE has improved from -34.0% to 11.4%.
Return on capital is rising
ROCE has improved from -24.4% to 14.5%.
Valuation below its historical average
At 7.5x the stock trades 49% below its own median of 14.6x.
Very low debt
Debt/Equity of 0.29x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention2

Debt is rising
Total debt is up 35% over 3 years — worth checking what it funded.
Receivables growing faster than sales
Receivables are up 53% against revenue growth of 33% — customers are taking longer to pay.

Red Flags

2 items require attention · 2 watch

🟡Debt is increasingFinancial
Total debt is up 35% over 3 years.
🟡Receivables growing faster than salesFinancial
Receivables up 53% against revenue up 33% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 49% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 55% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹14 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 53% against revenue up 33%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 10%✓ 11.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 7% a year✓ 9.9% CAGR
Latest reported year was 6.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹14 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 11%✓ 14.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 5 neutral · 1 weak

Market Cap

₹663 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

7.5x

Cheap

Cheap against the generic band

P/B Ratio

0.89x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹1.66

Profitable

Profitable on a per-share basis

ROE

11.4%

Moderate

Moderate capital efficiency

ROCE

14.5%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.29x

Low

Conservative leverage

Revenue Growth (YoY)

6.8%

Modest

Modest growth

Profit Growth (YoY)

-9.5%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

₹14 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹12.47

Operating Margin

9.7%

Average

Average margins

Net Margin

7.4%

Average

Average bottom-line conversion

Current Ratio

3.24

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.52

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

12.7 / 13.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

33.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹917 Cr	₹983 Cr	₹1,098 Cr	₹1,217 Cr	+9.9%
EBITDA	₹94 Cr	₹105 Cr	₹128 Cr	₹142 Cr	+14.5%
EBITDA Margin	10.3%	10.7%	11.7%	11.6%	—
PAT (Net Profit)	-₹127 Cr	₹64 Cr	₹80 Cr	₹92 Cr	—
EPS	₹-2.63	₹1.31	₹1.63	₹1.79	—
ROE	-34.0%	14.4%	14.9%	11.4%	—
ROCE	-24.4%	17.8%	18.2%	14.5%	—
Total Debt	₹162 Cr	₹156 Cr	₹183 Cr	₹219 Cr	+10.6%
Free Cash Flow	₹3 Cr	₹16 Cr	-₹15 Cr	₹14 Cr	+58.4%

🟢 Revenue has grown at 9.9% a year over 3 years.

🟢 EBITDA has grown at 14.5% a year over 3 years.

🟢 EBITDA Margin has risen from 10.3% to 11.6% over 3 years (+1.4 pts).

🟢 PAT (Net Profit) has turned positive, from -₹127 Cr to ₹92 Cr.

🟢 EPS has turned positive, from ₹-2.63 to ₹1.79.

🟢 ROE has risen from -34.0% to 11.4% over 3 years (+45.4 pts).

🟢 ROCE has risen from -24.4% to 14.5% over 3 years (+38.8 pts).

🔴 Total Debt has grown at 10.6% a year over 3 years.

🟢 Free Cash Flow has grown at 58.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,129 Cr

Total Liabilities

₹322 Cr

Total Debt

₹219 Cr

Cash & Equivalents

₹29 Cr

Operating Cash Flow

₹19 Cr

Capex

-₹5 Cr

Shareholding (proxy)

Institutional Holding

0.7%

Insider Holding

35.8%

Corporate Actions

Ex-Dividend Date

16 Sept 2021

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

2 mixed4 general

Kellton Tech Solutions rights issue 2026: Record date, price, size, subscription date, entitlement ratio, other details

Livemint, 18 Oct

There May Be Underlying Issues With The Quality Of Kellton Tech Solutions' (NSE:KELLTONTEC) Earnings

Simply Wall Street, 07 JunResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Kellton Tech board to approve rights issue terms on Oct 17

scanx.trade, 14 Oct

Kellton Tech Solutions Limited (KELLTONTEC.NS) stock price, news, quote and history

Yahoo Finance UK, 25 Sept

Kellton Tech Solutions Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

Kellton Tech Solutions Share Price Jumps After AI Travel Platform Update | Stock Market Today

Samco, 11 MarPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate10.2/20

🟢Financial HealthStrong17.8/20

🟢GrowthStrong13.6/20

🟡ProfitabilityModerate9.6/15

🟢ValuationAttractive13.2/15

🔴RiskHigh4.4/10

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last.

This thesis breaks if

✓EBITDA margin holds above 10%11.6%
✓Revenue growth stays above 7% a year9.9% CAGR
✓Free cash flow remains positive₹14 Cr
✓Debt / EBITDA stays below 2x1.5x
✓ROCE stays above 11%14.5%