This article first appeared on GuruFocus .
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Consolidated Revenue:INR968 crores for FY26, a 20% increase year-on-year.
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Profit After Tax (PAT):INR36 crores for FY26, up 10% from INR32 crores in FY25.
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Adjusted EBITDA:INR112 crores, a 14% increase year-on-year.
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EBITDA Margin:11% for FY26.
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Profit Before Tax (PBT) Before Exceptional Items:INR81 crores, a 33% increase year-on-year.
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Domestic Revenue Growth:17% year-on-year for FY26.
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International Revenue Growth:22% year-on-year for FY26.
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Services Business Growth:21% year-on-year for FY26.
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Solutions Revenue Growth:17% year-on-year for FY26.
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Enterprise Customer Revenue Growth:31% year-on-year for FY26.
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Government Revenue Decline:6% decrease year-on-year for FY26.
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New Orders and Renewals:INR166 crores secured during the quarter.
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Release Date: May 22, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Allied Digital Services Ltd ( BOM:532875 ) reported the highest annual revenue in its history, reaching INR968 crores, a 20% year-on-year growth.
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The company achieved a significant milestone by coming close to the INR1,000 crores top-line target on an annualized basis.
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International revenues grew by 22% year-on-year, indicating strong global market traction.
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The company secured INR166 crores in new orders and renewals, reflecting continued demand for its digital transformation and AI-led solutions.
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Allied Digital Services Ltd ( BOM:532875 ) has addressed all audit observations, strengthening its financial reporting and governance framework.
Negative Points
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Profit after tax grew only by 10% year-on-year, impacted by one-time charges and provisions.
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Government revenues declined by 6% during the year, indicating a slowdown in this segment.
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The company faced margin pressures due to increased competition and cost fluctuations in government projects.
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The profitability was affected by higher purchases and direct expenses, which increased from INR467 crores to INR585 crores.
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The company had to let go of a significant Western Railway project due to increased equipment costs, leading to a rebid.
Q & A Highlights
Q: How is Allied Digital Services managing client interactions amid reports of deferred investments and strong competition? A: An unidentified company representative explained that client interactions are decent despite industry-wide margin pressures. The company is leveraging AI to reduce costs and improve margins. The India business is growing, but government projects have slowed due to geopolitical factors affecting equipment costs. However, they expect a rebound in government contracts soon.
Q: What is the expected revenue growth and margin profile for FY27? A: The company aims for a 20% to 25% revenue growth, with a long-term target of 10x growth in 10 years. They are targeting EBITDA margins of 12.5% to 13% in the short term, with a long-term goal of 13% to 15%.
Q: How is the company addressing audit qualifications related to Section 186 and FEMA compliance? A: Nehal Shah, Whole-Time Director, stated that 50% of the work is done, with loans converted to equity and interest charged on remaining loans. They expect to resolve all issues and receive a clean audit opinion within the next two quarters, pending RBI approvals.
Q: What is the company's strategy for AI implementation, and how will it impact margins? A: Paresh Shah, CEO, highlighted that Allied Digital is adopting an AI-first strategy, integrating AI into managed services and smart city solutions. This is expected to reduce labor costs and improve margins. The company is investing in AI resources, technology, and training to enhance capabilities.
Q: What is the status of the Western Railways project and other government contracts? A: The Western Railways project was let go due to increased equipment costs, but a retender is expected in July. The company is confident about winning future government contracts, with a strong pipeline in Maharashtra and other regions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
