Does anyone know the reason for today’s upper circuit?
Any institutional investor getting in?
Look, I’m a finance guy, not an IT expert. I can’t speak to the specifics or quality of their operational work, but purely from a numbers perspective, this was significantly undervalued and a fundamental gem. There were no surprises here with the upper circuit—whether or not big players were involved.
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Ksolve has created history !!!. Dividend declared Rs 7.5 per share after split. So, Rs 100 price IPO share now cost Rs 6.25 per share (1 share become 8 shares due to past two bonus issues till Feb 2025 and now 16 share due to split in face value of Rs 5 per share).
Even without considering any sale value, the IPO investor who held the share, would have got more than 100%+ XIRR only from Dividend. This is amazing record I have seen in any company in India since IPO in my knowledge based on my working for 200+ large and prominent corporate listed in India since IPO.
Enclosing my excel working for record. Total cumulative distribution of Rs 42.38 per share since Feb 2021 (Listing in June 2020) at IPO ajdusted price of Rs 6.25 per share, giving XIRR of 100%+ for investor who held the share since the listing, without considering equity sales value of Rs 410 (19Mar2025 close after 20% increase). Amazing company and look forward to maitain such performance in future.
I was also suspecting prospect of the company when Invested, and frankly still do not have understanding of business. However, I understand cashflow and dividend and can talk to them. There are mutiple loose end in the company, but for me track record of consistent dividend payment over last 4 years is the biggest reason for me to be invested in the company. Rs 7.5 dividend after split is Rs 15 per as 3Interim Div for FY25 compared with Rs 5 per share as 3Interim div for FY24. This is amazing growth and I consider it positive sign from management about growth propsect. I have been wrong mutiple times when I tried to forecast the future. So not suggesting any investor to invest without doing proper due diligence in the company.
Ksolve Dividend Payment updated till March 2025.xlsx (14.5 KB)
Disclosure: Invested for last 27 months, last purchase in July 2024. My view may be biased due to my investment. I have been wrong mutilple time when attempted to forecast. Reader shall take note of that. I may exit my holding without informing forum. I am not SEBI registerd advisor and not recommending any investment action.
17 Likes
On multiple occasions the Management has said that they don’t have a hedging policy. This doesn’t inspire confidence in their risk management policies.
When almost all of your revenues are in foreign currency, it’s prudent to have a smart hedging policy.
Company has benefited from a rapidly depreciating Rupee in the last two years but in all likelihood next couple of years would see reversing of this trend.
I hope someone brings this up in the next concall as well and pressurises the management to adopt a prudent risk management strategy against currency fluctuations.
Disc: Hold tracking quantity
Regards,
Pratik
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Hi
One of the strength or emerging Moat for Ksolves is their ability to identify small niche for product development, making the product by taking risk or by identifying primary client, then selling it on platform at low cost and getting clients leads for development work.
As per mgmt they receive approx 10 Cr revenue from development work each quarter related to their product dashboard Ninja which is no. 1 product on odoo app. As management is very optimistic about their new Nifi product DFM, which is targeted for big corporates, product revenue (subsription and related development work) will increase a lot. Might be one of the reason why their cost is low and margin is high.
As far as doubts of other members regarding its financials and its sustainability, I think their huge dividend distribution policy is a proof that profit shown is real and they are quite confident of generating enough cash in future as well.
D:I have been wrong many times before.
Invested & Biased
5 Likes
just checked there annual report to check the revenue share of product , its aprox value is 2.7 cr
“During the FY 2023-24 , 97.5% of our revenue was from the services division and 2.5% was from our products
division.”
links related to products ::
Highest priced product is 722 USD (approx 4048 sold at this price to get 2.5cr)
2 Likes
Is tarrif will also applicable on IT products because main of the revenue comes from US. .
Please find below excerpt from last concall.
"
Okay. And what is the company’s vision with regards to product?
What is the current revenue split between services and products? And
where do you see that going maybe in the near to medium term?
Ratan Srivastava: Good question. Thank you. However, we have not explained too much
about the products. But we have achieved, I can say that good success
in product. Let’s go one by one. We have four products, Mind AI
Ninja, and LMN, and DFM and another one is the Dashboard Ninja.
Dashboard Ninja has generated by selling approximately $1 million in
last four years, $1 million.
Somil Jain: In last four years?
Ratan Srivastava: Last four years. And it is running #1 on the Odoo App Store. If you
want to see that so you can write down Odoo App Store, Dashboard
Ninja on Google, you can easily see our app is there on #1. First thing.
Second thing that, what is the benefit of this product? First benefit is
that we are able to generate recurring revenue by selling the products.
Second thing is that whenever anyone is buying this product, most of
the time they are using the ERP, and they need people miss engineers
to develop or maintain their ERPs. So, you can say that it is a way to
step into their home to get all the work into their home.
So, by selling this product direct, we generate only $500 to $600. But
most of the time, we get work monthly sometime $5,000, $10,000,
$20,000, $30,000 monthly. We have some products where customer is
giving $25,000 continuously every month since last three years. So,
this is the benefit of the Dashboard Ninja. Direct generated revenue, I
told you $1 million. Indirect is something that this quarter, I think we
have generated approximately ₹10 Cr by Odoo. And this product is
the Odoo application."
So maybe revenue from products as such might be low but it generates leads for development work. Products are feeding services division interested clients willing to buy their services without any marketing cost.
3 Likes
Has anyone gone through the cocall?
- They have reduced their guidance to 20% growth for FY26, and even the expected margin going forward is around 30%
- Margins have contracted while management is saying some of the expense is one like travel and new hires, I think this is more of a recurring revenue, given the business they are in
- On the brighter side, they are moving towards a project-based delivery model, which should help bring more sustainable revenue.
- Management is very bullish on the DFM; this is the team’s primary focus right now. Based on the conference call, management sounds confident, and he sounds authentic.
Disc: Invested in small quantity
4 Likes
I was on con call. Find enclosed my findings on con call.
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Reality check: Management realised that from small enterprise with team of less than 100 people to moving into organisation more than 400+ people need to have different set up. In previous avtar, they could maximise profit by lower establishment cost (people working from home, con call with clients, quick approval time as business was of small ticket), and hence higher EBITDA margin of 35-40%, same can not be sustain in case company want to grow as mid size IT company. While that realisation and efforts to prepare company to move into next growth orbit would mean volatile margin and sales growth, acknowledgement of same and recognisation by promoter is key positive step in my view. I would cautiously watch this journey.
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While the slowdown in profit growth and sales growth is a concern, it address another aspect. If investor read threads, there are mutiple question on high margin and high growth of company business and whether it is sustainable/ business being genuine. While adversity does impact business performance and stock market return, it would establish genuineness of business for the market. That is big positive for me as an investor in the company as I was also unable to understand IT business with such high margin and growth. As an investor, I align my expectation to new normal and would see how company deliver on promise.
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Management contine to be conservative while allocating capital. They evaluated some small company acquisition, but did not find prudent to spent money and hence distributed as dividend. They did not promise on any specific payout ratio of dividend, but assure that they shall act in best business of all stakeholders.
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New Recruitment from prestigeous peer company. The company could attact good experience members from Top 4 IT firm in company. That also establish genuineness of business. Also, I consider it as critical step to prepare for professional base to take company to next level. While, it is going to difficult path consider Mr. Ratan Srivastav is very active and in control of all decisions, in order to make company professional, he need to set decision making process and delegation to be implemented in organisation.
Overall, in my personal view, I see company would see moderate margin and double digit topline growth, assuming no further deterioration in US IT industry. However, despite higher sales growth, margin of company would be continue to be affected as it prepare for moving from small to mid size IT company. I shall continue to watch cautiously this journey. If company manage to provide stable dividend payout during this phase, I would continue to remain invested in company. However, in case I see further couple of quarters of adverse financials, I shall revisit my investment thesis. As of now, continue to hold my investment.
Disclosure: Ksolve is among top 4 equity holding and hence my view may be positively biased. I have not traded in the company in last 6 months. I am not SEBI registerd investment advisor. Readers shall do their own due diligence before making any investment decision. I many increase/exit my holding wihout informing the forum. I am poor forecaster and being wrong mutilple times in past. My past track record of wrong forecast may also continue in future as well.
10 Likes
I agree—the hunger to grow is clearly there, and it’s far too early to judge their performance based on just one quarter.
As management pointed out, the margin decline is primarily due to operating deleverage. If you look at the numbers QoQ, revenue dropped from ₹37.7 Cr (Dec '24) to ₹33.4 Cr (Mar '25), while expenses slightly increased from ₹23.6 Cr to ₹24.7 Cr. That’s a 12% decline in revenue with only a ₹1 Cr increase in costs, resulting in margins falling from ~37% to ~25%. Even if they simply return to the ₹37 Cr revenue run-rate with expenses at ₹26 Cr, margins could bounce back to around 30%.
I don’t have any short-term view or expectations, but I wanted to highlight how, at such a small scale, even small changes in absolute revenue or expenses can create the illusion of dramatic percentage swings—as if something major has gone wrong, when that may not be the case.
Also, I’d love to hear from fellow investors: how are you valuing this stock within your framework? Personally, I see this as one of the rare companies in my portfolio that should be valued based on dividend yield (2.5% at the top, 4% at the bottom). Traditional valuation metrics like PE, PB, EV/EBITDA, or PEG don’t seem to fit well here, especially given the volatility in earnings.
Disc: Biased, among my top 3 holdings.
3 Likes
While I agree that these metrics can be very volatile for such a small company, I am mainly looking at the revenue growth. If they can grow at 20% per year, it is still a good buy. I think PE still makes sense, maybe not in absolute terms, but a PE of 30 seems very reasonable at this growth and Margin in relative valuation. It’s difficult to put a future value on the company at this point, but one can be confident that the company will grow.
Their dividend and management aspiration also give me a huge confidence that the company will grow.
Disc: Invested
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Is any particular reason mentioned in the concal for fall in revenue q-o-q? It’s first time in 3 years their q-o-q sales decline.
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The way I am looking (and not valuing) at this business is - they have already proved themselves and built a good business with somewhat QRR of 30-40cr from previous 10-15 cr. Big money was made when they were transitioning from 10-15 cr to now 30-40 cr. Now, I am not concerned whether they grow by 20%, 25% or margins swing by ±5% as these are all part of the business which is small, is experimenting, opening new offices, reinvesting in talent etc. I am just waiting for them to crack a big client, a big deal, a higher wallet share - which seems highly probable given the fact that all big IT companies ( smallcap or midcap such as Newgen, Persistent etc. ) started this way. This - cracking of big order - is usually done when you get your inroads into the system - like you do some small service for a Big MNC client or Forturne 500 company. Once they like you and gradually build trust with you, then with time either you will grow into a more VAP kind of services- big contracts, big wallet or you will stay stuck there. Probability wise - former looks likely going by past track record. I will watch right now - but will wait for them to give meaningful evidence of the same.
Disclosure - invested, bottom 5% holding, actively tracking this one.
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