Allied Digital Services Q2 FY26 results: net profit up 32.8% to ₹15.41 crore, revenue up 15.1%

How did Allied Digital Services perform in Q2 FY26?

Allied Digital Services reported consolidated revenue of ₹233.70 crore for Q2 FY26, against ₹203.02 crore in Q2 FY25 and ₹219.02 crore in Q1 FY26. Total income was ₹240.66 crore, including other income of ₹6.96 crore, compared with ₹206.79 crore a year earlier and ₹221.71 crore in the previous quarter. EBITDA rose to ₹21.32 crore from ₹19.21 crore year on year and ₹18.83 crore sequentially; EBITDA margin was 9.1%, compared with 9.5% and 8.6%.

PBT was ₹20.56 crore, up from ₹15.60 crore in Q2 FY25 and ₹14.16 crore in Q1 FY26. The company reported a net profit of ₹15.41 crore, compared with ₹11.60 crore a year earlier and ₹14.44 crore in the previous quarter. Profit attributable to owners was ₹14.52 crore, and basic EPS was ₹2.58, compared with ₹10.18 crore and ₹1.83 in the year-ago quarter. On a standalone basis, revenue was ₹100.58 crore and PAT was ₹6.21 crore.

What changed in Allied Digital Services' costs and profit?

Total expenses rose ₹28.91 crore year on year, from ₹191.19 crore to ₹220.10 crore. Employee cost was the largest listed increase, up ₹14.45 crore or 41.3% to ₹49.47 crore, while finance costs rose ₹0.37 crore or 14.6% to ₹2.91 crore. Depreciation fell ₹0.03 crore or 0.6% to ₹4.81 crore, and other expenses fell ₹0.73 crore or 4.2% to ₹16.78 crore. Cost of materials remained unchanged at ₹0 crore.

Other income increased ₹3.19 crore or 84.6% to ₹6.96 crore from ₹3.77 crore in Q2 FY25, while total expenses rose ₹28.91 crore or 15.1%. Tax expense was ₹5.15 crore, up ₹1.15 crore or 28.8% from ₹4 crore, and there was no exceptional item in either quarter. Management said margin pressure was expected to continue over the next 3 to 4 quarters because of upfront contract costs, the Europe ramp and the smart city implementation phase.

How did the first half of FY26 go?

In the first half of FY26, consolidated revenue was ₹452.72 crore, up ₹70.57 crore or 18.5% from ₹382.15 crore in H1 FY25. Total income rose 19.5% to ₹462.37 crore from ₹386.93 crore, while PBT increased 16.8% to ₹34.72 crore from ₹29.72 crore.

H1 FY26 net profit was ₹29.85 crore, up ₹7.84 crore or 35.6% from ₹22.01 crore in H1 FY25. Basic EPS increased from ₹3.49 to ₹4.92, a rise of ₹1.43 or 41.0%. The Board approved the unaudited consolidated and standalone results for the quarter and half year ended 30 September 2025 on 7 November 2025.

What do the balance sheet and cash flow show?

As of 30 September 2025, total assets were ₹988.07 crore, compared with ₹925.34 crore at 31 March 2025. Total equity was ₹659.50 crore against ₹646.38 crore, while borrowings rose to ₹98.30 crore from ₹72.13 crore. Cash declined to ₹162.19 crore from ₹188.13 crore; inventories were ₹50.46 crore, trade receivables ₹228.47 crore and trade payables ₹98.10 crore.

H1 FY26 operating cash flow was negative ₹32.42 crore, compared with positive ₹54.91 crore in H1 FY25. Investing cash flow was negative ₹2.96 crore against negative ₹3.42 crore, while financing cash flow was positive ₹9.44 crore against negative ₹14.75 crore. Capital expenditure was ₹9.60 crore, compared with ₹2.33 crore a year earlier.

How has Allied Digital Services done over the last 8 quarters?

Revenue has risen year on year for seven consecutive quarters, reaching ₹233.70 crore in Q2 FY26 from ₹171.07 crore in Q3 FY24. Profit has increased year on year for two consecutive quarters, reaching ₹15.41 crore after a loss of ₹7.61 crore in Q4 FY25. EBITDA margin improved to 9.1% from 8.6% in Q1 FY26 but remained below the 13.8% recorded in Q4 FY24.

The latest quarter followed revenue of ₹219.02 crore and profit of ₹14.44 crore in Q1 FY26, with both measures higher in Q2 FY26. Margin moved above the Q4 FY25 low of negative 4.6%, while remaining below the 9.5% recorded in Q2 FY25. The available quarterly series therefore shows revenue at its highest reported point, profit recovering from the prior loss and margin moving higher sequentially.

Which businesses drove the quarter?

The Services segment reported revenue of ₹176.69 crore, up 17.5% from ₹150.41 crore in Q2 FY25, and EBIT of ₹58.28 crore against ₹34.02 crore. Its reported EBIT margin was 33.0%. Management said Services revenue grew 17% year on year.

Solutions reported revenue of ₹57.01 crore, up 8.4% from ₹52.61 crore in the year-ago quarter, and EBIT of ₹8.53 crore compared with ₹6.48 crore. Its reported EBIT margin was 15.0%. Unallocated revenue was ₹6.96 crore, up 84.6% from ₹3.77 crore, with no EBIT reported.

What did Allied Digital Services' management say?

Management said the company was targeting an annualised revenue run rate of ₹1,000 crore by Q4 FY26 or Q1 FY27, equivalent to about ₹250 crore per quarter. It maintained a long-term EBITDA margin target of 12–13% as contracts move beyond the initial setup phase. Management also said margin pressure could continue for 3–4 quarters, while US pricing pressure was expected to persist for another couple of quarters.

Management said the Europe healthcare deal would go live in phases from December 2025 to February 2026, with the full quarterly revenue run rate from Q1 FY27. It planned to hire 120–130 people in Germany and Switzerland during FY26. The company said order intake was ₹698 crore during the quarter, including 85–90% net new business, and that the Pune Drishti command centre with over 2,800 cameras was inaugurated in August 2025.

Management identified upfront costs on large contracts, US pricing pressure and government budget cycles for smart city projects as risks. It said the approximately ₹2,100 crore Mumbai smart city renewal required a partnership and that a standalone bid was not planned. The company was pursuing the renewal through partnership and also said it was evaluating opportunities with tighter pricing where the potential for higher margins and long-term value could improve.

How did Allied Digital Services shares react?

After the filing appeared after market hours, the stock moved down 0.4% after five minutes, 1.6% after 15 minutes and 2.0% after 30 minutes. On the reaction day it fell 3.2% from the previous close of ₹173.00. By the next day's close, the stock was down 2.3% from its pre-results close; by the fifth session, it was down 1.4%.

Earlier results-day moves were mixed: the stock rose 0.7% on 5 August 2025 and 16.6% on 31 January 2025, while it fell 9.3% on 31 May 2025, 4.6% on 28 October 2024, 6.8% on 30 July 2024 and 0.1% on 23 May 2024. These figures describe the historical reaction to previous results and do not indicate a future share-price movement.

How did other IT Enabled Services companies do?

Among 64 other IT Enabled Services companies that had filed for the quarter, the median revenue growth was 21.7%. Allied Digital's revenue growth of 15.1% was below that median. Twenty-eight peers grew slower than Allied Digital, while 36 grew faster.

Of the 62 peers for which profit was compared, 45 reported higher profit. The peer data was available as of 5 November 2026, while Allied Digital's Q2 FY26 results were announced on 7 November 2025. The comparison covers revenue growth and profit direction rather than an assessment of company-specific reasons for the differences.