Allied Digital Services Q2 FY27 results: net profit down 18.3% to ₹12.59 crore, revenue up 13.5%

How did Allied Digital Services perform in Q2 FY27?

Allied Digital Services reported consolidated revenue of ₹265.32 crore in Q2 FY27, up ₹31.62 crore or 13.5% from ₹233.70 crore in Q2 FY26. EBITDA rose ₹3.07 crore or 14.4% to ₹24.39 crore, and EBITDA margin was 9.2%, compared with 9.1%. Net profit fell ₹2.82 crore or 18.3% to ₹12.59 crore, while basic EPS fell ₹0.36 or 14.0% to ₹2.22.

Against Q1 FY27, revenue increased ₹4.83 crore or 1.9% to ₹265.32 crore and EBITDA rose ₹1.65 crore or 7.3% to ₹24.39 crore. EBITDA margin increased 0.5 percentage points to 9.2%. Net profit rose ₹0.20 crore or 1.6% to ₹12.59 crore, while basic EPS increased ₹0.03 to ₹2.22. Profit attributable to owners fell ₹0.45 crore or 3.9% to ₹10.98 crore.

On a standalone basis, revenue was ₹81.64 crore, down 18.8%, and net profit was ₹4.34 crore against profit before tax of ₹6.21 crore. The company filed the results for the quarter and half year ended 30 September 2026 on both standalone and consolidated bases.

What changed in Allied Digital Services' costs and profit?

Other income fell ₹4.85 crore or 69.7% to ₹2.11 crore from ₹6.96 crore in Q2 FY26. Total expenses rose ₹30.24 crore or 13.7% to ₹250.34 crore, including employee cost of ₹58.90 crore, up ₹9.43 crore or 19.1%, finance costs of ₹4.24 crore, up ₹1.33 crore or 45.7%, depreciation of ₹5.17 crore, up ₹0.36 crore or 7.5%, and other expenses of ₹21.47 crore, up ₹4.69 crore or 27.9%.

Profit before tax fell ₹3.47 crore or 16.9% to ₹17.09 crore from ₹20.56 crore. Tax expense declined ₹0.65 crore or 12.6% to ₹4.50 crore from ₹5.15 crore. There was no exceptional item in Q2 FY27. Compared with Q1 FY27, total expenses rose ₹4.11 crore or 1.7%, other income fell ₹0.50 crore or 19.2%, and finance costs rose ₹0.78 crore or 22.5%.

How did the first half of FY27 go?

For the first half of FY27, consolidated revenue was ₹525.81 crore, up ₹73.09 crore or 16.1% from ₹452.72 crore in H1 FY26. Total income was ₹530.53 crore, up ₹68.16 crore or 14.7% from ₹462.37 crore, while profit before tax fell ₹0.76 crore or 2.2% to ₹33.96 crore.

H1 FY27 net profit was ₹24.98 crore, down ₹4.87 crore or 16.3% from ₹29.85 crore, and basic EPS was ₹4.42 against ₹4.92. The half-year result therefore combined higher revenue with lower profit.

What do the balance sheet and cash flow show?

At 30 September 2026, total assets were ₹1,121.26 crore against ₹1,058.2 crore at 31 March 2026, and total equity was ₹697.08 crore against ₹671.23 crore. Borrowings rose to ₹167.18 crore from ₹116.76 crore, while cash increased to ₹185.16 crore from ₹134.07 crore. Trade receivables fell to ₹264.12 crore from ₹320.36 crore and trade payables to ₹131.75 crore from ₹153.95 crore.

For H1 FY27, operating cash flow was ₹16.36 crore against negative ₹32.42 crore in H1 FY26. Investing cash flow was negative ₹3.76 crore against negative ₹2.96 crore, and financing cash flow was ₹29.36 crore against ₹9.44 crore. Capital expenditure was ₹0.18 crore compared with ₹9.6 crore a year earlier.

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

Revenue rose year on year in each of the last eight quarters. Across the reported period, revenue increased from ₹220.57 crore in Q3 FY25 to a peak of ₹267.77 crore in Q4 FY26 before easing to ₹260.49 crore in Q1 FY27 and rising to ₹265.32 crore in Q2 FY27.

Profit and EBITDA margin followed a less consistent path. Net profit bottomed at negative ₹7.61 crore in Q4 FY25 and also reported a loss of ₹3.4 crore in Q4 FY26, before recovering to ₹12.39 crore in Q1 FY27 and ₹12.59 crore in Q2 FY27. EBITDA margin reached 11.4% in Q3 FY25 and fell to negative 4.6% in Q4 FY25; it was 9.2% in Q2 FY27.

Which businesses drove the quarter?

Services revenue was ₹232.03 crore, up 31.3% from ₹176.69 crore in Q2 FY26, with EBIT of ₹74.37 crore against ₹58.28 crore. The reported EBIT margin was 32.1%. Management said Services contracts were typically recurring or annuity-based, offered strategic stability and had greater long-term margin potential.

Solutions revenue was ₹33.29 crore, down 41.6% from ₹57.01 crore in the year-ago quarter, while EBIT fell to ₹2.98 crore from ₹8.53 crore. The reported EBIT margin was 9.0%. Management said Solutions generally carried higher margins and comprised one-time implementations. Unallocated revenue was ₹2.11 crore, down 69.7% from ₹6.96 crore, with no EBIT.

What else did the company announce?

The board approved the unaudited standalone and consolidated financial results for the quarter and half year ended 30 September 2026 on 3 November 2026, along with the statutory auditors’ limited review reports. The meeting began at 01:17 P.M. and concluded at 05:05 P.M. The same-day filings also included an investor presentation.

During the quarter and half year ended 30 September 2026, the holding company allotted 82,075 and 136,475 fresh equity shares under the ESOP Plan, respectively. The results filing stated that the conversion of an interest-free loan granted to Allied Digital Inc., USA, into equity shares remained pending processing by the relevant regulatory authorities. No dividend or fund-raising announcement was included in the cited same-day filings.

What did the auditors point out?

The auditors’ report included an emphasis of matter drawing attention to Note 7 and the pending compliance connected with conversion of the loan into equity investment with the relevant regulatory authorities. The auditors stated that their conclusion on the unaudited standalone financial results was not modified in respect of this matter. No qualified opinion or going-concern qualification was stated in the excerpt.

What did Allied Digital Services' management say?

Management said the global operating environment remained selective and decision cycles for new technology investments had become more extended. The investor presentation emphasised AI-led automation, managed services, Digital Desk, recurring contracts, larger multi-year engagements, digital engineering and global expansion through new customer and partner engagements.

Management highlighted a “70%+ target automation rate; 3 mo to production launch” for the AIMS major-insurer pilot and an “-80% MTTR vs baseline; 3 mo to production launch”. It also referenced Mission 10x growth without stating a timeframe. The presentation said the US subsidiary formed a strategic partnership with a privately held US managed-IT and cybersecurity provider, and that project engagements would be delivered through Allied Digital’s offshore delivery centre.

Management said the Q2 revenue mix shifted to Services at 88% from 76%, while Solutions fell to 12% from 24%. It also noted that working-capital changes consumed ₹31.17 crore, leaving net operating cash flow of ₹16.37 crore against PBT of ₹33.96 crore. No explicit capital-expenditure amount or timeline was disclosed.

How did Allied Digital Services shares react?

The filing was released after market. From the price when it appeared, the stock fell 2.2% after five minutes, 2.6% after 15 minutes and 3.1% after 30 minutes. It closed the reaction session down 1.2% from its previous close of ₹105.84. The IT Enabled Services sector rose 2.7%, leaving the stock’s relative move at negative 3.9 percentage points.

Earlier reaction-day moves were negative 1.5% on 6 August 2026, negative 4.4% on 21 May 2026 and negative 3.3% on 4 February 2026. Earlier results also included positive moves of 0.7% on 5 August 2025 and 16.6% on 31 January 2025. One- and five-session post-result moves were not available.

How did other IT Enabled Services companies do?

Among 28 IT Enabled Services companies that had filed for the quarter, the median revenue growth was 22.5%. Ten peers grew more slowly than Allied Digital Services, while 18 grew faster than the company, whose Q2 FY27 revenue growth was 13.5%. Of the 25 peers for which profit was compared, 20 reported higher profit.