The market has an odd sense of humour. International traders can not purchase sufficient of something with AI in its identify. Again house, two corporations that spent the final 12 months launching AI platforms, successful AI contracts and placing AI into shopper work have been offered down with out mercy. One is buying and selling about 51% beneath its 52-week excessive whereas the opposite trades roughly 42% beneath its excessive.
Now right here is the twist. Neither identify has a well-known investor on the register to lend consolation. However the public holding has been rising in small numbers within the final 12 months.
However on condition that AI is without doubt one of the hottest themes within the Indian markets, these shares are drawing consideration from good traders. They’ve the information, the tales, two very completely different steadiness sheets, and one brutal correction that has put each on the identical display.
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#1 Kellton Tech: The Microcap AI Plumber Buying and selling Beneath E-book Worth
Kellton Tech is a Hyderabad-based digital transformation firm with shoppers throughout the US, Europe, India and Asia-Pacific. The US alone brings in 81.5% of income, and digital transformation work makes up 84% of the enterprise as per the June 2026 quarter presentation.
The corporate has partnerships with a few of the greatest names of the tech house like Microsoft, Amazon Net Providers and SAP.
The AI story right here isn’t a slide in an investor deck. It’s a product record. In the course of the June 2026 quarter, the corporate launched Phoenix.ai, a platform that makes use of AI brokers to interrupt previous monolithic enterprise software program into fashionable cloud-native items. It additionally rolled out Structi.ai, an engine that turns unstructured knowledge into inputs AI techniques can use.
It attained Choose Tier associate standing on the Snowflake AI Knowledge Cloud. And it deployed its Optima digital oilfield platform for Oil India, placing 77 manufacturing wells below real-time monitoring inside six months of beginning work.
That’s actual AI plumbing for actual shoppers in vitality, banking, agriculture and industrial providers. So why has the inventory halved?
Regular Prime-Line, Stagnant Margins
Allow us to take a look at the 5-year financials to get a view of how the corporate has been doing within the final 5 years
| Monetary Yr | FY21 | FY22 | FY23 | FY24 | FY25 | FY26 | 5Y CAGR |
| Gross sales (Rs cr) | 776 | 843 | 917 | 983 | 1,098 | 1,217 | 9% |
| EBITDA (Rs cr) | 108 | 105 | 93 | 104 | 128 | 135 | 5% |
| Internet Revenue (Rs cr) | 71 | 70 | -127 | 64 | 80 | 92 | 5% |
EBITDA refers to working revenue earlier than different earnings. One-off disclosure: the FY23 lack of Rs 127 cr got here from a unfavourable different earnings entry of Rs 182 cr, a non-cash write-down. Working revenue stayed constructive at Rs 93 cr that 12 months. Internet revenue CAGR is computed on reported figures and consists of the restoration from that base.
A 9% gross sales CAGR is modest for a corporation that talks AI. The trailing twelve months present gross sales of Rs 1,237 cr and web revenue of Rs 91 cr, a skinny 7.4% margin. The June 2026 quarter introduced gross sales of Rs 316 cr, up 6.8% on the 12 months, with web revenue of Rs 22 cr. Regular, not spectacular.
The 8x PE A number of: A Hidden Gem or a Worth Lure?
The share price of Kellton Tech Options was round Rs 11 in August 2021 and as of closing on sixth August 2026 it was Rs 14.2.
As for the valuations, the corporate’ share is buying and selling at a PE of 8x and the business median presently is 26x. The ten-Yr median PE for the corporate is 9x whereas the business median for a similar interval is 28x.
Right here is the place it will get attention-grabbing. At Rs 14.2, Kellton trades at 0.93 instances its ebook worth of Rs 15.2 per share. The inventory value CAGR over ten years is unfavourable 1%, and the final one 12 months alone worn out 46%. The market cap now stands at Rs 752 cr towards annual gross sales of Rs 1,217 cr.
Promoter Exits and Money Burn
Three flags sit on this register, and they don’t seem to be small.
First, promoter holding has dropped from 52.14% in June 2023 to 37.67% in March 2026, a fall of 14.5 proportion factors in below three years. The general public now holds 61.3%, unfold throughout greater than 2 lakh shareholders, with home establishments holding nothing in any respect.
Second, money. FY26 money from operations was unfavourable Rs 10 cr towards an working revenue of Rs 135 cr. Free money move was unfavourable Rs 208 cr as capital work in progress jumped from Rs 32 cr to Rs 165 cr. The corporate raised Rs 188 cr by financing in FY26 to fund this. Revenue on paper isn’t turning into money within the financial institution.
Third, debtor days have stretched from 96 in FY20 to 118 in FY26. Administration itself flagged sluggish collections from massive shoppers and authorities contracts on the July 2026 earnings name. When an organization books income sooner than it collects it, the P&L flatters the reality.
#2 Zensar Applied sciences: The 0-Debt Money-Wealthy RPG Group AI Adopter
Headquartered in Pune, Zensar Technologies is a midcap from the RPG group, with Harsh Goenka as chairman, a market cap of Rs 11,389 cr, a dividend yield of three% and nearly no debt.
Its AI push runs deeper than most mid-tier IT companies. As per the July 2026 earnings commentary, 85% of the workforce is now AI-certified. The corporate has constructed a collection it calls ZenseAI, which incorporates AgentMesh, a platform launched in June 2026 to assist enterprises run fleets of AI brokers, and ZenseAI.GW, a set of accelerators for insurance shoppers shifting to the Guidewire cloud.
June quarter wins included an AI agent governance platform for a big American division retailer group and an AI-powered deduction audit platform for a US ebook distributor.
Banking and monetary providers now contribute 48.8% of income, and a $210 million mega deal signed within the March 2026 quarter started producing income from mid-February, with full ramp anticipated by the December quarter.
When Revenue Development Outpaces Core Gross sales
Allow us to take a look at the 5-year financials
| Monetary Yr | FY21 | FY22 | FY23 | FY24 | FY25 | FY26 | 5Y CAGR |
| Gross sales (Rs cr) | 3,781 | 4,244 | 4,848 | 4,902 | 5,281 | 5,687 | 9% |
| EBITDA (Rs cr) | 685 | 656 | 552 | 872 | 817 | 916 | 6% |
| Internet Revenue (Rs cr) | 307 | 422 | 328 | 665 | 650 | 775 | 20% |
EBITDA refers to working revenue earlier than different earnings. Gross sales compounded at simply 9%, but revenue compounded at 20%. The hole is margin restore plus different earnings. Working margin fell to 11% in FY23, then recovered to 16% by FY26. On high of that, different earnings, largely earnings on the funding ebook, grew from a unfavourable Rs 24 cr in FY21 to Rs 209 cr in FY26. Strip that out and the core enterprise grew income at a far humbler tempo.
The June 2026 quarter delivered gross sales of Rs 1,508 cr, up 8.9% on the 12 months, and web revenue of Rs 184 cr, up simply 1%. Margins took successful from upfront transition prices on the mega deal, further hiring and a rebuilt gross sales power. Administration has guided that the September quarter ought to do higher because the order ebook converts.
₹2,600 Cr Money Pile: The Valuation Disconnect
The share price of Zensar Technologies was round Rs 415 in August 2021 and as of closing on 6th August 2026 it was Rs 501.
Relating to valuation, the inventory trades at a PE of 14x and the business median is 23x. The ten-year median PE for the corporate is 20x whereas the business median for a similar interval is 23x. The inventory has corrected by over 40% from its all-time excessive of Rs 985.
For a close to debt-free firm with a 23% ROCE, a file order ebook and a fats money cushion, that a number of sits nicely beneath the place most high quality midcap IT names have traded in recent times.
The monetary place is the quiet power right here. Borrowings have shrunk from Rs 350 cr in FY21 to Rs 79 cr in FY26. The funding ebook has grown to Rs 1,921 cr. Internet money and equivalents stood at $317.5 million on the finish of June 2026, which is over Rs 2,600 cr, or roughly 23% of the market cap. FY26 free money move was Rs 719 cr, and the corporate paid out 44% of income as dividend.
International Exits and Cannibalized Tech Budgets
Two dangers deserve a point out. International institutional holding has slid from 16.5% in March 2024 to 10.7% in June 2026. Home establishments have purchased that provide, rising from 17.5% to 22%, however the international exit is a persistent overhang on the value.
The second danger carries some irony. Zensar’s expertise vertical retains shrinking as a result of its personal tech shoppers are slicing outsourcing budgets to fund their AI capex. Administration has budgeted zero progress from its high TMT shopper for FY27. The AI wave that Zensar sells is similar wave consuming one in all its verticals. Contemporary order consumption of $149.2 million within the June quarter was additionally a multi-quarter low, one thing to look at over the following two outcomes.
Markets Worth Money Flows, Not Press Releases
The 2 AI shares inform a really completely different story. Kellton is a microcap priced beneath ebook, the place the AI platforms are actual however the money move isn’t maintaining, the promoters have offered a seventh of the corporate in three years, and no establishment stands on the register. The 8x a number of is the market demanding proof that income can develop into money.
Zensar is a midcap with the other profile. Money-rich, dividend-paying, almost debt-free, with a mega deal ramping and 85% of its individuals educated on AI. Its 14x a number of displays a slower-growth enterprise in transition, not a steadiness sheet unsure.
The shared lesson is uncomfortable for anybody chasing the AI theme by headlines. Doing real AI work has not protected both inventory from a steep correction. The market is pricing collections, money and conversion, not press releases. For the retail investor, the sincere start line is to know which of these two danger profiles they’re really shopping for, as a result of the phrase AI seems in each tales and means one thing totally completely different in every.
A good suggestion could be to add these stocks to a watchlist and observe the following few quarters for money move and order conversion.
Disclaimer:
Notice: We’ve relied on knowledge from http://www.Screener.in and http://www.trendlyne.com all through this text. Solely in circumstances the place the information was not out there, have we used an alternate, however extensively used and accepted supply of data.
The aim of this text is just to share attention-grabbing charts, knowledge factors and thought-provoking opinions. It’s NOT a advice. Should you want to contemplate an funding, you might be strongly suggested to seek the advice of your advisor. This text is strictly for educative functions solely.
Suhel Khan has been a passionate follower of the markets for over a decade. Throughout this era, he was an integral a part of a number one Fairness Analysis organisation primarily based in Mumbai because the Head of Gross sales & Advertising and marketing. Presently, he’s spending most of his time dissecting the investments and techniques of the Tremendous Traders of India.
Disclosure: The author and his dependents don’t maintain the shares mentioned on this article. The web site managers, its worker(s), and contributors/writers/authors of articles have or might have an excellent purchase or promote place or holding within the securities, choices on securities or different associated investments of issuers and/or corporations mentioned therein.
