Kellton Tech - Growing IT company


(kanvgarg123) #21

Mr bajaj it was always a risky bet. They are into so many things and doing a lot of acquisitions. I think you should stick to your investment philosophy. I invested merely 3% of my portfolio initially and now after the fall it has reduced to 1.5 %. I will look into it only after 3 yrs or so. Being an IT guy all I know is that Analytics is a big area and it is growing at 100% YOY. If Kellton’s management can pull it through then we can have a 10-15 baggar but again risk is too high.

Kanv


(vaibhav) #22

I hope this guy has a bit of a humble pie since he has been less than polite with other members -

I hope it turns out well ultimately for Kellton’s shareholders including Mr. @subashnayak_19_ if he is still holding.

Disc,: Not invested but in watchlist.


#23

Seems you guys miss the vital signs and indicators. There are quite a few.

They are big in providing digital services to e-commerce companies. All top 3 in India and prominent ones in US are their clients. You might have noticed that e-Com madness is all but over in India.

They were looking for anchor investors for QIP and could not find it for the full book. This doesn’t give good taste in the mouth.

The last nail in the coffin was tweet by ‘BM about stocks losing 30% from your thesis’. I assume he was talking about Kellton. Thank god, I was ahead of him in exiting this one at least. I sold mostly due to their confused strategy.

This doesn’t mean that it can not come back but it might be long road to recovery.


(Rajeev M. Parashar) #24

As @kanvgarg123 rightly mentioned, Data Analytics is quite big in IT right now. It will be interesting to find out how much of Kellton’s revenues is from Analytics, or for that matter, how many of their employees are doing analytics. The skill set required for Data Analytics (Python, R, Probability & Statistics) is different from software development (Java, Dot Net, etc).

As of now, ERP and digital services to e-commerce ‘seem’ (I’m not sure of the revenue breakup) to have a larger chunk in the revenue pie. If I’m not wrong, even their recent acquisitions have been in these two areas.

Whether they will find some kind of strategic fit to their numerous acquisitions is another question.

Disclosure: Invested. Kellton & Inox Wind are the two ugly red gashes in my portfolio. :grimacing:

@sumi00 The madness of VC funding for e-commerce may be over, but with Alibaba set to enter India & the inevitable consolidation in the e-commerce space will make it more interesting.


#25

Kellton is trying to offer everything under the sun. From SAP implementation, APP development, analytics to digital transformation. Consolidation will make them survive for another day but it will hurt IT service providers.


(rvetri) #26

Hi sumi00 http://forum.valuepickr.com/users/sumi00 Sumit Very good post
about Kellton… At the first one or two signs of uncomfortable moves, i
generally run to the exit. Did the same with Kellton… The MD saying, he
has no visibility for the nos they had projected, no specific acquisition
candidate and yet will meet the revenue target coming in the next 6 months
was the last nail in the coffin… why continue in doubt when there are
several tens of honest companies out there…The only limitation is our
money… we do not have enough to buy all cos with honest management.
Disc: Bought at Rs 200 exited at Rs 150… converted all to 8K Miles


(rvetri) #27

Hi @VIFL http://forum.valuepickr.com/users/vifl Rajeev M. Parashar
http://forum.valuepickr.com/users/vifl
Good you pointed out about Inox wind… They hide all their liabilities
under their subsidiaries/ associate companies…Their balance sheet is very
confusing and on thinking through, one shall get a feeling of something big
amiss… The same strategy followed by Enron before finally filing for
chapter 11…
Disc: Was very close to investing in Inox wind, but escaped on deeper
analysis


(mp bajaj) #28

Thx to all the members of quick response. My q was on technicals. Today it is up almost 9%. with good volume. What is the technicals suggesting? Book losses & move on or Hold for some recovery?


(Rajeev M. Parashar) #29

Look at posts from the Math86 guy on Kellton’s Moneycontrol board for techincal comments. I don’t understand technicals, so, I’ve no way to tell how knowledgeable he is about TA.


(Gaurav Agarwal) #30

Can you please quote the source of this information?


Can you eloborate on it a little? I could not get what is BM (I am assuming, you are referring to Basant Maheshwar) trying to say here?

Thanks @sumi00 in advance.


#31

Source? which part of this is not public?

Yes, it is Basant


(Gaurav Agarwal) #32

Sorry @ if I missed it and troubled you. I could not find news that - Kellton tech is looking for an anchor investor for qip but could not find it for full book.

I tried google search, please find results below, no help. Looking for you help here. Please help but pasting a link to source of you information


#33

They were looking to raise money through QIP for quite sometime and IR said it will be done as soon as they find enough anchor investors. That did not happen and this kind of failure is not taken lightly by the market. I am not saying it can’t happen going forward.


(Gaurav Agarwal) #34

Hi @sumi00 thanks for your quick reply. Got your point. I agree market will not take it lightly.

Did IR (Investor Relation) told this in one of the conference call or presentation? If you could just drop a hint at to which conference call/presentation and I will read it through and put it up for all to read.

Thanks


#35

Someone I know called them to find the status of QIP. The discussion also brought out that they have been hiring some senior folks across geographies hitting margins and this is what happened in Q2.


(mp bajaj) #36

HYDERABAD, MAY 30:
Kellton Tech is planning to hire 2,000 more employees and raise ₹120 crore as it aims to reach a turnover of ₹2,000 crore by 2019. It presently has about 1,200 employees, of which half came on board last year.

“We are currently at a run rate (projected annual results based on the present revenues) of ₹330 crore. We are going to significantly expand our facilities in Hyderabad and Gurgaon. We will have 300 people there in three years,” Niranjan Chintam, President of Kellton Tech, said.

Addressing a press conference here on Monday, he said the IT services firm would go for a qualified institutional placement to raise about ₹120 crore. “We will complete the process this financial year,” he said. The promoter group owns 64 per cent.

The company is in the process of acquiring a couple of firms in the SMAC (Social, Mobility, Analytics and Cloud) and Internet of Thing areas. “We are doing due diligence. We can’t say whether it will be one or two acquisitions,” Krishna Chintam, Managing Director, said.
http://www.thehindubusinessline.com/markets/stock-markets/kellton-tech-plans-120cr-qip/article8668621.ece

Operative Line “We will complete the process(QIP of 120 Cr) this financial year”.
Only 3 months has passed since this statement. Still 7 months are there in this FY.
If they are able to complete QIP, does it change market perception?
Secondly MD is in habit of giving forward guidance of what is he going to do, which creates anticipation? Is this needed?


(Rajeev M. Parashar) #37

The hiring of mid to senior level execs was mentioned by Niranjan Chintham after Q4F16 Results

He mentioned about raising of Rs 125-150 crore after Q1 Results
http://www.moneycontrol.com/news/resultsboardroom/targeting-20-organic-growthfy17-kellton-tech_7221381.html?utm_source=ref_article


(Whipsaw) #38

Tone of the Kellton promoter always sounds like that he wants to drive the stock price. I was confused on whether he wanted to randomly acquire for reaching 900 cr :slight_smile: . They need to state on what they are missing now and how the acquisition will fill the hole.


(Harpreet Singh) #39

Good that the discussion on Kellton has gained some traction on the forum :slight_smile:

re my understanding on the points raised above …i have also spoken to the company recently

  • They insisted that they were extremely transparent

i chided them on such transperancy and requested them to use english instead of nos …and let the high growth nos wow us as they come

their reply was that they were themselves not keen on sharing projections and only when one of the anchors reema cnbc kept asking repeatedly they gave these nos

  • the Chairman clearly said the organic growth will be 20% which will lead to a runrate of 750 -770 odd crores , wow and balance will come from acquisitions

  • they use the american concept of run rate which is not too prevalent in india and thus a bit confusing for everyone incl anchors :stuck_out_tongue:

900 - 1000 cr run rate would mean 250 Crs in last quarter …250 x 4 = 1000 which would mean almost doubling of the revenue by the last quarter and it by itself is huge !

  • the idea of acquisitions is to grow fast esp in tech sector as expertise is available in small niche companies and you acquire for clients, growth & mining the clients over a breadth of services they offer and even management depth …like prosoft owner now heads a full vertical in the co

  • re acquisition , i am sure they know what they want to do / acquire BUT why would the chairman announce it in a result concall …so all he said if i recall right is , when we will have something to announce we wil come and share with you …fair enough …that doesnt mean " he has no idea etc " :slight_smile:

  • to my mind the QIP its not a large amount at all & they can easily raise esp given their size, client base and growth …

discl - fairly large holding of the share


(Harpreet Singh) #40

Sirjee which company would / should discuss in such detail as much as telling investors and competition .what exactly are their gaps …why should they ?

will you in their shoes …i am sure no …