Kellton Tech Solutions Ltd Management Discussions

Global GDP growth is estimated at approximately 3.0% for 2026 (International Monetary Fund), a modest moderation from prior years, with growth increasingly uneven across geographies and shaped by geopolitical tension and elevated energy costs. Within this environment, enterprise technology spending has continued to expand at a pace well ahead of broader GDP growth, as businesses increasingly treat AI and automation as a lever for cost resilience and competitive positioning rather than discretionary investment. For a technology services provider such as Kellton, this divergence - modest macro growth alongside accelerating technology adoption - is the central operating context for the year under review.

US

The U.S. economy is projected to grow 2.3% in 2026. Enterprise technology budgets have held up despite tighter credit conditions, with spending increasingly directed toward internal productivity and core-system optimization rather than exploratory initiatives.

For Kellton, this shift reinforces demand across two of its core service lines - platform engineering and AI-led workflow automation and supports the Companys continued investment in its North American delivery footprint, which remains its largest revenue geography.

India

India remains the fastest-growing major economy, with GDP growth projected at 7.4% for FY 2025-26, supported by strong domestic demand, sustained infrastructure investment, and government policy encouraging digital adoption.

For Kellton, India serves a dual role: as an engineering and delivery base and, increasingly, as a market for AI-led enterprise solutions in its own right, as domestic enterprises accelerate technology adoption alongside the Companys global client base.

Europe

European growth remains subdued, at approximately 0.9% for 2026, weighed down by energy costs and cautious enterprise spending. However, regulatory developments, particularly the EU AI Act, are compelling European enterprises to modernize legacy infrastructure and adopt compliant, auditable AI systems.

This regulatory-driven demand is opening a specific opportunity for Kellton in secure cloud migration and compliance-oriented AI deployment, an area the Company is positioned to grow through FY 2026-27.

Industry Outlook: From Pilots to Production

2026 marks an in ection point in enterprise AI adoption, with the primary buyer conversation shifting from experimentation to production deployment and measurable return on investment. Gartner projects global IT spending will grow 10.8% to 13.5% in 2026, to between USD 6.15 trillion and USD 6.31 trillion, with generative AI spending up more than 80% year-over-year. IT services remains the largest single category within this, at an estimated USD 1.87 trillion.

A de ning feature of this cycle is buyer scrutiny: enterprises that experienced costly, inconclusive AI pilots in 2024-25 are now selecting partners based on integration depth, data security and demonstrated financial returns, rather than technology novelty. This shift structurally favours service providers with proprietary accelerators and a demonstrated delivery track record over generalist integrators, a dynamic that directly informs Kelltons positioning strategy.

Company Overview

Kellton is a global technology consulting and engineering company delivering cloud, data, AI and digital engineering services to enterprise clients, with a delivery workforce of over 1,800 professionals operating across North America, Europe and India. The Companys priority for FY 2025-26 was to convert its AI- first positioning from stated intent into demonstrated delivery capability measured in production deployments, proprietary IP and independently recognised client outcomes, detailed below.

AI-first strategy: FY 2025-26 Execution

During the year, Kellton moved AI from isolated pilot engagements into core client delivery. The following engagements are illustrative of that shift, and of the outcomes it is producing for clients:

Generative AI in production: Kelltons KAI platform was deployed for a global advertising and PR group to automate creative production work flows, drawing on the Companys experience across 100+ AI rollouts. The engagement delivered a 90% reduction in time-to-market, a 60 to 70% reduction in cost-per-creative, a four-fold increase in asset output at no additional cost, and a 30-40% lift in audience engagement.

High-availability engineering at scale: Kellton served as the digital engineering partner to SonyLIV for the Asia Cup 2025 cricket tournament, building a cloud-nativ e streaming architecture with dynamic auto-scaling and optimized CDN routing to sustain near-zero latency through peak concurrent viewership demonstrating the Companys capability in mission-critical, high-concurrency engineering for the media and entertainment vertical.

Agentic AI in regulated environments: For a global telecommunications client, Kellton deployed an agentic identity-veri cation system on the KAI platform to address SIM-swap fraud and account takeover risk combining automated checks with human-in-the-loop escalation for complex cases reducing manual veri cation cost while preserving full regulatory auditability.

New IP-led platform: In partnership with FutureAge AI Labs, Kellton built and launched fir Zourney, an AI- st B2B travel distribution platform that compresses multi-day agent booking work flows to under ve minutes. Zourney reflect s Kelltons shift toward co-developed, IP-led platforms as a growth vector, in addition to services delivered on a time-and-materials basis.

While consulting and sta -augmentation remain core to its model, Kellton has over the past year built out a portfolio of proprietary platforms that reduce delivery time, protect margins, and differ entiate the Company from competitors:

KAI (Kellton Agentic AI): Kelltons agship agentic AI platform enables enterprises to deploy autonomous, multi-step AI agents integrated directly with existing ERPs, CRMs and legacy systems, without requiring system replacement. Client deployments across financial services, healthcare and supply chain have delivered processing-time reductions in excess of 60%. KAI received the AGBA Innovation Star Rating Certification 2026 (High-Potential: Outstanding Performance category) at the AEGIS Graham Bell Awards, backed by Indias Ministry of Electronics and Information Technology (MeitY) - independent, third-party validation of the platforms technical depth.

Optima: An operational and asset-optimisation platform providing real-time performance tracking and predictive bottleneck detection, used to improve resource utilisation for infrastructure- and asset-intensive clients.

Phoenix.ai: A legacy modernisation engine that automates migration of legacy codebases (including Java and Progress 4GL) to modern, cloud-native architectures up to four times faster than manual rewrites, with materially fewer logic errors.

Stratified: A data-engineering accelerator that ingests and structures unstructured enterprise data (documents, forms and audio) into AI-ready pipelines at scale, addressing the data-readiness gap that precedes most enterprise AI failures.

These four platforms underpin Kelltons shift from a purely time-and-materials delivery model toward IP-led, repeatable engineering directly addressing how investors in IT services businesses increasingly value platform economics and IP ownership alongside headcount-linked revenue growth.

Business Model: Where We Compete

Kelltons revenue is built on a diversified set of capabilities. The table below sets out each vertical and its principal focus during FY 2025-26:

VERTICAL	FY 2025-26 FOCUS
AI & Machine Learning	Building autonomous AI work flows, ne-tuning language models, and automating routine enterprise processes, primarily through the KAI platform.
Data & Analytics	Building governed, AI-ready data pipelines for clients - the prerequisite layer for reliable enterprise AI deployment
Product Engineering	Building and shipping cloud-ready software products on compressed timelines for clients across BFSI, media, and travel.
Cloud Engineering	End-to-end cloud migration, hybrid architecture design, and cloud cost optimization, underpinned by the Companys Microsoft Solutions Partner status.
SAP Services	SAP cloud migration and enterprise software customization for large enterprise clients.
Digital Experience Next-Gen Services	User-experience design and interface engineering for client- facing digital platforms. IoT and blockchain-based supply chain transparency solutions.

From Vendor to Strategic Partner

Through FY 2025-26, Kellton continued to shift its existing client relationships from transactional, project-based engagements toward longer-term platform and outcome-based partnerships. This is reflect ed in three areas of client work: modernizing legacy systems onto cloud-native architectures for long-standing clients; embedding real-time data tracking into client operations to shorten product launch cycles; and automating repetitive back-o ce processes to improve client-side margins. The Company views the proportion of revenue derived from multi-year, platform-anchored engagements rather than single-project mandates as a key indicator of the durability of this shift, and intends to disclose this metric explicitly from FY 2026-27 onward.

Operational Excellence

Delivery

Kellton embedded AI-powered coding and testing assistants into its global delivery work flow during the year, contributing to faster code turnaround, lower defect rates, and more consistent output across its round-the-clock delivery centres.

Practice

The Company expanded its Centres of Excellence (CoEs) in Agentic AI, Explainable AI and Cloud Cost Optimisation. These CoEs function as internal capability-building units, ensuring technical teams remain current with rapidly evolving AI tooling and enterprise requirements.

Sales & Marketing

Kelltons go-to-market approach shifted further toward proof-of-value pilots - small-scale, measurable engagements designed to de-risk enterprise buying decisions before scale-up - consistent with the buyer behaviour described in the Industry Outlook section.

Human Resources

Facing a competitive talent market, Kellton prioritised internal upskilling over external hiring for critical AI capability. Structured training tracks, run in partnership with major cloud providers, built certified in-house expertise in AI safety, prompt engineering and ethical data handling.

Particulars	Metrics	31 Mar, 2026	31 Mar, 2025	YoY
		(FY26)	(FY25)
Revenue (INR Mn)	Total Revenue	12,254	10,998	11.4%
Pro t (INR Mn)	EBITDA	1,439	1,297	10.9%
	PBT	1,073	925
	PAT	917	797	15.1%
Margin (%)	EBITDA	11.8%	11.8%
	PBT	8.8%	8.4%
	PAT	7.5%	7.3%
EPS (Rs.)	Basic	1.79	1.64
	Diluted	1.79	1.63

For the year ended 31 March 2026, Kellton reported consolidated revenue of 1,225.4 crore ( 12,254 million), up 11.4% year-on-year. Growth was supported by continued expansion across AIled transformation, cloud modernisation, digital engineering, enterprise platforms and data-driven engagements, together with deeper customer relationships and a growing base of platform-led programmes. The Companys investments in AI capabilities and its born-digital foundation enabled it to respond to increasing enterprise demand for intelligent transformation and automation.

EBITDA for the year stood at 143.9 crore, with an EBITDA margin of 11.8%, broadly in line with FY25. Margin stability reflect ed continued focus on delivery efficiency , disciplined resource management and productivity, while maintaining investments in AI capabilities, proprietary platforms and specialised talent. This balance enabled the Company to continue strategic capability building while maintaining operating pro tability.

Net profit increased 15.1% year-on-year to 91.7 crore, ahead of revenue growth of 11.4%. PAT margin improved to 7.5% from 7.3% in FY25, while diluted EPS stood at 1.79. The improvement reflect s the Companys ability to translate revenue growth into higher earnings while maintaining operating discipline and managing costs effect ively.

Annual Report 2025-26 31

During FY26, balanced growth investments with operating and financial discipline, strengthening its AI-First Delivery Engine, launching KAI, expanding AI-led solutions and continuing investment in talent and AI readiness. The acquisition of Kumori Technologies further deepened Kelltons ServiceNow capabilities across AI, work flow automation and enterprise transformation. Together, these investments strengthened the Companys delivery capabilities and positioned it for sustainable, platform-led growth.

The Company also completed a 1:5 stock split, effect ive July 2025, aimed at improving share liquidity, and received an A- rating for its long-term banking facilities, reflect ing its continued focus on financial discipline.

Strengthening the Partner Ecosystem

Microsoft

Kellton achieved Solutions Partner designation across three Azure competency pillars - Data & AI, Digital & App Innovation, and Infrastructure - placing it among a smaller group of partners with triple-pillar validation within the Microsoft AI Cloud Partner Program. This status gives access to co-selling opportunities, co-marketing funding, and early access to Azure AI tooling, including Azure OpenAI and Azure Synapse, directly supporting deal velocity in cloud and AI engagements.

ServiceNow

During the year, Kellton acquired Kumori Technologies, a specialized ServiceNow services provider, to deepen platform capability across ITSM, ITOM, HRSD, GRC, and CSM. The acquisition builds platform- specific depth in a segment growing faster than broader IT services, and extends Kelltons ability to serve large enterprise clients on uni ed work flow platforms rather than point solutions.

Data

Continued deepening of alliances with Snow ake and AWS to co-develop industry- specific data pipeline templates for BFSI, healthcare and retail clients, supporting the Companys broader data-readiness positioning ahead of client AI deployment.

As it moves into FY 26-27, priority is to convert these partner designations into a higher share of co-sourced and co-sold revenue, rather than treating them primarily as credentialing exercises.

Opportunities

1. Enterprise Modernization and Higher-Value Platform-Led Growth

Enterprises continue to modernize legacy technology environments and invest in cloud-native architectures, data platforms, intelligent automation and AI-enabled solutions. This shift creates opportunities for Kellton to move beyond traditional technology services and participate in larger, more strategic transformation programs spanning consulting, engineering, implementation and ongoing platform support.

For Kellton, this transition also supports the expansion of higher-value, longer-term client engagements and greater cross-selling opportunities across its capabilities in cloud, data, AI, digital engineering and enterprise platforms. The Companys investments in intellectual property, reusable accelerators and specialized platform capabilities are intended to strengthen differ entiation and support a gradual shift towards more value-led commercial engagements. Recent strategic initiatives and capability additions, including the Zourney and Kumori engagements, demonstrate the Companys focus on building platform- specific and IP-led growth opportunities.

However, rapid technology transformation also requires continuous investment in capabilities. The pace of change in AI, cloud and digital technologies may create risks related to technology obsolescence, evolving regulatory and responsible AI requirements, data privacy and cybersecurity, and the need to continually attract and develop specialized talent. Kelltons ability to convert this market opportunity into sustainable growth will therefore depend on maintaining relevant capabilities, strengthening governance and security frameworks, and continuing to invest selectively in emerging technologies and skills.

2. Deepening Technology Alliances and Expanding Client Relationships

Kelltons strategic relationships with cloud hyperscalers and enterprise technology providers provide opportunities to expand joint go-to-market initiatives, co-selling and cross-selling. The Companys triple-pillar Microsoft Solutions Partner status, together with its broader ecosystem of technology partnerships, strengthens its ability to support clients across interconnected cloud, data, AI and enterprise platform requirements.

These relationships can help Kellton increase its participation in client technology programs, deepen long-term client relationships and improve access to new business opportunities. Greater integration of Kelltons services into clients technology environments may also support higher client retention and recurring engagement opportunities. At the same time, realizing the full value of these partnerships requires continued investment in certi cations, specialized capabilities and joint market development.

1. Macroeconomic Conditions, Procurement Cycles and Competitive Pricing Pressure

Macroeconomic uncertainty in key international markets may continue to affect enterprise technology spending, extend decision-making and procurement cycles, and increase scrutiny on discretionary investments. For Kellton, given its exposure to international markets and enterprise technology budgets, prolonged delays in client decision-making could affect deal conversion, revenue visibility and the timing of new project ramp-ups.

At the same time, the technology services market remains highly competitive, with clients increasingly evaluating providers on speed, specialized capabilities, measurable business outcomes and pricing. This may create pressure on deal economics and margins, particularly as commercial models evolve towards xed-price, managed services and outcome-based engagements.

Management continues to address these dynamics through client and industry diversi cation, disciplined deal evaluation and project estimation, stronger account engagement and a focus on differ entiated capabilities in AI, cloud, data and enterprise platforms. Investments in reusable IP, accelerators and platform- specific expertise are also intended to strengthen Kelltons market positioning and reduce reliance on purely time-and-materials engagements. These measures are designed to support deal conversion and protect pro tability while improving the Companys ability to compete for higher-value transformation programs.

2. Talent Availability, Wage In ation and Capability Requirements

The availability and retention of skilled professionals remain important to Kelltons ability to deliver client programs and pursue growth opportunities, particularly in areas such as AI, cloud, cybersecurity, data, and specialized enterprise platforms. Intense competition for these capabilities may drive up team member costs and retention pressures, with potential implications for delivery capacity, project margins, and the pace at which the Company can scale emerging technology practices.

Kellton continues to address these challenges through structured upskilling, workforce planning, career development, and exible global delivery models. Building and retaining internal capabilities is particularly important as the Company expands its AI- rst, platform-led offer ings, in which technology skills and client expectations are evolving rapidly. Managements focus is therefore not only on talent availability, but also on continuously aligning workforce capabilities with changing market demand.

3. Cybersecurity, Data Privacy and Delivery Resilience

As Kellton expands its work across cloud, data, AI, and enterprise platforms, cybersecurity and data privacy have become increasingly important considerations. The Company may handle or support systems containing sensitive client and business information, making it potentially exposed to cybersecurity incidents, data breaches, evolving privacy requirements, and disruptions to technology infrastructure.

Such events could affect client trust, delivery continuity, and operating costs, and, depending on the nature and scale of an incident, result in contractual, regulatory, or reputational consequences. The increasing use of AI and data-driven solutions further reinforces the importance of robust data governance, security controls and responsible technology practices.

Management seeks to mitigate these exposures through cybersecurity and information security controls, data protection practices, governance frameworks and business continuity and disaster recovery measures. The Companys ability to maintain delivery continuity across its global operations is also supported by exible delivery models and operational controls. These measures are intended to strengthen resilience while supporting the secure delivery of increasingly complex technology and AI-led client engagements.

4. Client Relationships and Delivery Continuity

Kelltons operating performance depends on its ability to maintain strong client relationships, deliver projects effect ively and expand engagement with existing accounts. Changes in client technology priorities, budget constraints, vendor consolidation or dissatisfaction with project outcomes could affect revenue growth, client retention and future business opportunities.

The Company seeks to manage this exposure through deeper account engagement, diversi ed client relationships, delivery governance and continued investment in capabilities aligned with evolving client requirements. The increasing focus on end-to-end transformation and platform-led services is also intended to position Kellton as a longer-term technology partner rather than solely a project-based service provider.

Business continuity is an important part of this approach. Operational disruptions, including technology failures, cyber incidents, geopolitical developments or other external events, could affect service delivery and increase operating costs. Management continues to focus on resilient global delivery operations, business continuity planning and operational controls to minimize potential disruption and maintain service levels.

5. Geopolitical, Regulatory and Foreign Exchange Exposure

Kellton operates across multiple geographies and serves clients in international markets. This creates exposure to changes in economic conditions, geopolitical developments, regulatory requirements and foreign exchange movements. Such developments may affect client spending, cross-border operations, employee mobility, delivery costs and the translation of international revenues and expenses.

Management seeks to mitigate these exposures through geographic diversi cation, exible global delivery capabilities, compliance and governance processes, and systematic management of foreign exchange exposure. Continued diversi cation across markets, clients and industry verticals is also intended to reduce the impact of adverse developments in any single geography or customer segment.