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Check Before You Invest : Kellton Tech Solutions Ltd

BSE: 519602 NSE: KELLTONTEC ISIN: INE164B01030
  |   Sector:  IT & ITES   |   Industry:  IT - Software

Snapshot

Q.1 Which industry/sub-sector does Kellton Tech Solutions Ltd belong to?
Kellton Tech Solutions Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.
Q.2 Is Kellton Tech Solutions Ltd a good quality company?
Kellton Tech Solutions Ltd is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Kellton Tech Solutions Ltd undervalued or overvalued?
Kellton Tech Solutions Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 63.06 75.83
Price to Book 2.95 5.28
Price to Sales 4.29 5.25
EV to EBITDA 25.81 31.96
Q.4 Is Kellton Tech Solutions Ltd a good buy now?
Kellton Tech Solutions Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Kellton Tech Solutions Ltd?
Kellton Tech Solutions Ltd revenue growth is 2.3% for FY-2025, which is below its 5-year CAGR of 8.3%, indicating slower growth.

Q.2 Gross Profit margin of Kellton Tech Solutions Ltd?
Kellton Tech Solutions Ltd Gross profit margin which is the profit after deduction of direct costs, is 13.7% for FY-2025, which is in line with its 5-year median of 13.7%, indicating stable margins.

Q.3 Operating Profit Margin of Kellton Tech Solutions Ltd?
Kellton Tech Solutions Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 17.68% for FY-2025, which is in line with its 5-year median of 17.68% indicating stable margins.

Q.4 Net Profit Margin of Kellton Tech Solutions Ltd?
Kellton Tech Solutions Ltd Net Profit Margin is 7.16% for FY-2025, is in line with its 5-year median of 7.16%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 13.7 13.7
Operating Profit Margin (%) 17.68 17.68
Net Profit Margin (%) 7.16 7.16

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Kellton Tech Solutions Ltd?
Kellton Tech Solutions Ltd Return on Asset is 4.82%, which is in line with its 5-year historical median of 4.82%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Kellton Tech Solutions Ltd?
Kellton Tech Solutions Ltd Return on capital employed is 11.08% for FY-2025, which is in line with its 5-year historical median of 10.82%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Kellton Tech Solutions Ltd?
Kellton Tech Solutions Ltd Return on equity is 8.06% for FY-2025, which is in line with its 5-year historical median of 8.06%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Kellton Tech Solutions Ltd?
Kellton Tech Solutions Ltd Cash conversion cycle is 121 days, in line with its 5-year historical median of 120 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.67 0.67
ROE (%) 8.06 8.06
ROCE (%) 11.08 10.82
Cash Conversion Cycle 121 days 120 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Kellton Tech Solutions Ltd?
Kellton Tech Solutions Ltd Debt-to-Equity ratio is 0.50, which is above the industry average of 0.01, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Kellton Tech Solutions Ltd?
Kellton Tech Solutions Ltd Debt to cash flow from operations is -145.34, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Kellton Tech Solutions Ltd?

Q.1 Promoter shareholding and pledge status of Kellton Tech Solutions Ltd?
Promoters hold 37.67% of the Kellton Tech Solutions Ltd, with 15.18% of their stake pledged, indicating high pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Kellton Tech Solutions Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Kellton Tech Solutions Ltd vs industry peers?
Kellton Tech Solutions Ltd revenue CAGR is 8.30%, compared to the industry median CAGR of 3.17%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 2.3 3.2
Gross Profit Growth (%) 23.8 18.4
Operating Profit Growth (%) 22.2 18.8
Net Profit Growth (%) 40 21.9
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.67 0.46
ROE (%) 8.06 4.22
ROCE (%) 11.08 6.49
Cash Conversion Cycle (days) 120.63 36

Valuation & price assessment

Q.1 Stock return of Kellton Tech Solutions Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of -2.2% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
-2.2% 4.5% 9.7% -20.7%
Q.2 Valuation ratios of Kellton Tech Solutions Ltd vs historical?
The current P/E ratio of 63.06 is lower than its historical median of 75.83, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 63.06 75.83 47.38
Price to Book 2.95 5.28 2.64
Price to Sales 4.29 5.25 4.79
EV to EBITDA 25.81 31.96 16.75

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