Kellton Tech - Smallcap in SMAC, ERP-BPM and IoT space

Discussion in 'Ask A Query About Your Stock Picks And Portfolio' started by Arvind2k, Nov 3, 2016.

  1. Arvind2k

    Arvind2k Member

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    Kellton Technologies - Company offers end-to-end IT solutions, tech. consulting, product development in web, SMAC, ERP-BPM and IoT.

    CMP: 114/-

    Recently announced Q2 numbers... My Observations ....
    1) Sales up 37% YoY and 7.8% QoQ
    2) EBIDTA Margin improved to 14% from 13.8%
    3) PAT up 38.5% YoY and 8.8% QoQ
    4) Reserves and surplus has shot up from 65.5 crores in 31 Dec15 to 129.11 crores as of 30 Sep 16
    5) Debt (Long term borrowings Short term borrowings) at 77.6 Crores
    6) Current D/E at 0.5

    Overall decent performance !!!!

    Q2 Progress::

    1) Acquired 10 new clients.
    2) Achieved a major branding milestone by unifying all brands under Kellton Tech.
    3) Enabled the digital transformation of one of the largest online payment processing company in the MENA region.
    4) Designed and implemented enterprise solution to largest independently owned precast concrete company in the United States.
    5) Powered the digital business transformation and consolidation for leading provider of pallet and container pooling services.
    6) Lead the digital connected enterprise consolidation for a leader in consumer goods offering innovative products and services.

    Management Commentary:::

    Kellton Tech looking to raise USD 3-4 million;
    Qualified Institutional Placement (QIP) work in progress FY17 revenue seen at Rs 625-630 crore, says Niranjan Chintam, Founder & Chairman of Kellton Tech Solutions.
    Kellton Tech is in discussions with various companies for acquisitions, said Chintam.


    What I like ::

    Management is conservative which makes good sense. Also Management is not looking to add too much debt to grow inorganically. Strategic acquisition is what they are looking for.

    Fund raising will happen through a combination of debt raising and QIP.
    4 Million Dollars or 25 Cr of debt they could be raising this year taking the total debt to 100Cr for FY17.
    D/E then would then be in the range of 0.6-0.65 from the present 0.5 and assuming further equity dilution through QIP. D/E 1 is manageable.

    With 650 Crores Topline for FY17, we can expect PAT to be around 55 crores.If an acquisiton happens, they expect a revenue of 225Cr/Quarter going forward.

    Note:- BSE IT Index 52-week high is 11775.50 (June 02nd 2016) and today's (03rd Nov. 2016) closing 9725.66 which is 21.07% fall (2049.19 points) from the peak !!!
    Even if we assume, another 5-10% fall, I do feel IT sector will rebound in this downtrend sooner or later !!!!!

    Kellton Tech - Market Cap: 536 crores, EPS 10.25, PE: 11.1 & Industry PE: 17.55 !!

    Conservative target would be around 150-160 ... with future growth and strong management, Kellton tech should grow in leaps and bounds in the coming 2-3 years ahead !!!

    Keep an eye on this stock !!!!!

    Lets hope for the best...
     
  2. Arvind2k

    Arvind2k Member

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  3. BKJ

    BKJ New Member

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    These numbers are excellent esp. considering the current state of affairs in the IT space. I have considered this stock few times in last few months, but could never develop enough conviction. Has someone researched on promoter background and corporate governance?
     
  4. BKJ

    BKJ New Member

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    Over the last 15 years, my experience with small cap IT stocks has always been bad. Prithvi, Cranes, Aftek, Subex to name a few. They will shine for a year or two and then get in all sort of trouble and fade away. I think IT requires very different skills to start and serve a few clients as compared to scaling up into a truly growth company.
     
  5. Arvind2k

    Arvind2k Member

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    http://www.newindianexpress.com/cit...a-Bumpy-Ride-for-Chintam-Brothers-795444.html

    “The idea is to create value and move on if we get a right price. We will not hesitate to exit if the timing is right,” Niranjan said.

    Acquisitions
    2010: Acquired Tekriti Software, a software services company focusing on web/open service

    2011: Acquired MCS global, Inc. US-based IT consulting company

    2012: Acquired DbyDX software, a mobility solutions company

    2013: Acquired Supremesoft Global Inc, Inc.US based IT consulting company

    2014: Acquired Vivos Professional Services, LLC, USA focusing in the life sciences and healthcare service

    2014: Acquired eVantage Technologies Inc., US-based IT consulting company

    2015: Acquired US-based Prosoft Technology Group.

    ProSoft acquisition has strengthened Kellton's ERP, EAI & BPM space. And Vivos professional services got them expansion in verticals of Healthcare & life-sciences.
    Expanded global foothold. Opened and acquired new offices.

    Serving clients from startups to Fortune 500 companies.
    Kellton Tech powers 30% of the 21 billion dollar eCommerce market in India through its clients.

    FY17 revenue seen at Rs 625-630 crore as per Chintam and targettign towards Rs 2000 crore annual revenues in the next 3 years ...

    Kellton Overview:
    The Company offers information technology (IT) solutions, strategic technology consulting and product development services in Web; social, mobile, analytics, cloud (SMAC); enterprise resource planning (ERP) - business process management (BPM), and Internet of things (IoT) space.

    Its product includes KLGAME, which is a gamification, analytics and messaging engine that provides backend system. It offers services, such as offshore product development, research and development, IT consulting services, analytics and information management, resourcing, Internet marketing services and managed services.

    The Company serves clients across a range of verticals, including retail; travel; e - commerce; education; hospitality; advertising; m arket research; manufacturing; consumer goods; logistics; supply chain management (SCM); banking, financial services and insurance (BFSI); lifestyle, and non - profits.

    Kellton Tech is steadily expanding its offerings portfolio through organic growth and synergistic acquisitions. It has strengthened its foothold in technology and through its expanded workforce it is capable of offering a diverse range of IT services and solutions.

    Today, its offerings include I-SMAC (Internet of Things, Social, Mobile, Analytics, Cloud), Enterprise Resource Planning, and Enterprise Application Integration apart from the its other traditional offerings.

    INDUSTRY OVERVIEW:
    India gave a decisive mandate for a strong government last year and the new government has since been actively working to inspire global confidence in India’s growth story and IT industry has been accorded special focus in the new scheme of affairs.

    The recently launched Digital India Campaign would open up a plethora of opportunities for IT companies.

    The vision of smart cities is a challenge that Indian IT industry is well - equipped to tackle and this is a golden opportunity to demonstrate its technological prowess while contributing to the nation - building.
    Now,Indian IT companies can look forward to serve European customers too.

    India is the topmost offshoring destination for IT companies across the world. Having proven its capabilities in delivering both on - shore and off - shore services to global clients, emerging technologies now offer an entire new gamut of opportunities for top IT firms in India.

    Social, mobility, analytics and cloud ( SMAC) are collectively expected to offer a US$ 1 trillion opportunity. Cloud represents the largest opportunity under SMAC, increasing at ~30% CAGR to around US$ 650 - 700 billion by 2020. The social media is the second most lucrative segment for IT firms, offering a US$ 250 billion market by 2020. The Indian e-commerce segment is US$ 12 billion in size and is witnessing strong growth and there by offers another attractive avenue for IT companies to develop products and services to cater high growth consumer segment

    Kellton Tech’s R&D efforts (whose latest brainchild is KLGAME™) have been handsomely rewarded even as it prepares itself for the long haul.

    Yes, one has to view 2-3 years down the line to realize Kellton's potential.
     
  6. Arvind2k

    Arvind2k Member

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  7. Arvind2k

    Arvind2k Member

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    Kellton Tech ranks 19th on Deloitte Technology Fast 50 India !!!!

    Kellton Tech Solutions announced that Kellton Tech, a global leader in digital transformation and enterprise solutions, has been ranked 19th on the Deloitte Technology Fast 50 India 2016, a ranking of 50 fastest growing technology companies in India.

    The rankings were based on the percentage of growth in fiscal year revenues over three years.

    http://www.business-standard.com/ar...-technology-fast-50-india-116111500464_1.html

    upload_2016-11-16_17-49-13.png
     
  8. Arvind2k

    Arvind2k Member

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    Kellton Tech is the ONLY public listed IT Services Company to be ranked as fastest growing technology company in the Deloitte Fast 50 for the year 2016.
     
  9. Arvind2k

    Arvind2k Member

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    Kellton Tech. latest Corporate video is out. Watch It !

     
  10. Arvind2k

    Arvind2k Member

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  11. Arvind2k

    Arvind2k Member

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    [​IMG]
    [​IMG] [​IMG]

    MCS Global, Inc., an information technology (IT) consulting company, provides IT and staff augmentation solutions to various organizations in the United States. The company offers enterprise integration,
    enterprise data management, enterprise workflow, Business intelligence, ebusiness, and CRM solutions; and mobile enablement solutions in the areas of wireless portals, commerce, workflow, and entertainment.

    It also provides outsourced product development solutions in Web 2.0, consumer Internet applications, mobile applications (iPhone, iPad, Android, and BlackBerry), social network technology, and custom software development solutions. In addition, the company offers consulting, systems integration, system outsourcing, resources, support, and training services; and undertakes fixed fee projects, as well as
    provides a team of developers, QA, project managers, system administration, and designers on a monthly retainer basis. The company is based in New Brunswick, New Jersey with additional offices in offices in New York; New Jersey; Washington, D.C.; and India.

    Hope this acquisition turns out to be a profitable one for Kellton Tech. in the coming days.
     
  12. Arvind2k

    Arvind2k Member

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  13. Arvind2k

    Arvind2k Member

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    Technical chart ::
     

    Attached Files:

  14. Arvind2k

    Arvind2k Member

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    PayTM merchant app developed by kellton tech. and also Upay dealing is done by Kellton.

    MARKET CAP - Now @ (RS CR) - 616
     
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