Stick to Sep-Oct target to hit Rs 600cr in revenue: Kellton Tech

Kellton Tech is well on its way to achieve the Rs 600-crore revenue target by September, says Founder & Chairman Niranjan Chintam, in an interview to CNBC-TV18 after reporting fourth quarter earnings,

The company posted consolidated total income of Rs 132 crore in the fourth quarter compared to Rs 116 crore in the same quarter last year. EBITDA improved by 4.4 percent quarter-on-quarter (QoQ) to Rs 17 crore. Net profit increase to Rs 11 crore compared to Rs 10 crore last quarter.

Chintam points out that Kellton has marquee customers in the digital transformation space in which competitors are yet to catch up and that will help in achieving the guidance.

On the sequential 100 basis points margin drop in the fourth quarter to 13 percent, he says, it was due to base effect of removal of hardware revenue from UP project and increase in employee expenses from addition of senior-level personnel to help achieve targeted growth.Below is the verbatim transcript of Niranjan Chintam's interview with Reema Tendulkar and Nigel D'Souza on CNBC-TV18.Reema: Q4 has been good but in the first nine months of this financial year, you have done revenues of Rs 360 crore. I remember in one of your early interactions you told us the FY16 revenue guidance will be Rs 600 crore. That looks little difficult to achieve given the current revenue runrate. What are your thoughts on the FY16 guidance?A: I gave the guidance of September-October timeframe that we will be at Rs 600 crore and if you look at it, we still have few more quarters to achieve that. Looking EBITDA and runrate of Rs 132 crore per quarter, we should be easily achieving that number, beating that without doing anything.Reema: That would account for five quarters? Because you have already done three and you are saying two more?A: The guidance that I gave was for September-October and we will achieve that number of Rs 600 crore very easily but talking about the current quarter, the profits have gone up by about 11.5 percent, revenues gone up by 13.8 percent. If we continue this strength, Rs 600 crore is easily achievable.Nigel: Rs 360 crore or thereabouts is what you have done till now. Are you going to surpass Rs 600 crore by a good margin because there are Rs 240 crore to do and you are going to do around Rs 120 crore if I go by simple math and you are already doing Rs 130 crore, so is it a possibility that you can do maybe around Rs 630-640 crore?A: We should be able to achieve the numbers. I don’t want to speculate now. I gave a guidance of Rs 600 crore, we will easily beat that. Let us leave it there.Coming back to the current quarter, we are seeing a number of customers also going up -- one-three million revenue customers going up. 500-1 million customers going up, average customer numbers are also going as we have seen the big boys have been saying that the average per customer revenue is coming down for them whereas for us it is going up. So I see a lot of good things happening.Also you must be seeing the latest buzz of digital transformation. We have been doing this for a while. Everybody has gone on a bandwagon with this digital transformation. We have very marquee customers so that is going to easily achieve any numbers that we have projected out.Reema: Your margins have declined from 14 percent in the prior quarter to 13 percent this quarter, any reason for that?A: There are two reasons. One is that the last time we talked about this where I said there is some hardware revenue that came from the UP project, that is not there anymore so the profits have come down a little bit because of that.In addition to that, we are now gearing towards building up the team for 300 million target that we gave for FY19 or December 2019. For that, we started hiring very senior level members that are going to take us to that number. For that reason, our personal cost has gone up so there is a slight shrinkage of that. However, this team that we have built the senior management team, we should be able to achieve 300 million and the numbers going forward, the margins will be a little bit better than what we have shown this quarter.