Allied Digital Services Q4 FY25 results: net loss of ₹7.61 crore vs ₹14.11 crore profit, revenue up 15.6%

How did Allied Digital Services perform in Q4 FY25?

Allied Digital Services reported consolidated revenue of ₹204.35 crore for Q4 FY25, up 15.6% from ₹176.76 crore in Q4 FY24 but down 7.4% from ₹220.57 crore in Q3 FY25. Other income was ₹37.53 crore, while total expenses were ₹230.90 crore. The company reported EBITDA of a loss of ₹9.30 crore and an EBITDA margin of -4.6%, against ₹24.33 crore and 13.8% a year earlier and ₹25.05 crore and 11.4% in the previous quarter.

Q4 FY25 PBT was ₹10.98 crore, down 41.6% from ₹18.80 crore in Q4 FY24 and down 45.3% from ₹20.07 crore in Q3 FY25. Tax was ₹10.31 crore, compared with ₹4.70 crore and ₹2.36 crore in the two comparison periods. The company reported a net loss of ₹7.61 crore and basic EPS of ₹1.42, against a net profit of ₹14.11 crore and EPS of ₹2.53 in Q4 FY24, and ₹17.71 crore and ₹2.97 in Q3 FY25.

The reported figures were consolidated. On a standalone basis, the company reported revenue of ₹99.94 crore and a loss after tax of ₹4.31 crore, with revenue up 20.6% and profit before tax of ₹6.81 crore.

What changed in Allied Digital Services' costs and profit?

Compared with Q4 FY24, total expenses increased by ₹72.80 crore to ₹230.90 crore. Employee cost rose by ₹16.69 crore to ₹54.51 crore, depreciation increased by ₹11.30 crore to ₹15.30 crore, other expenses increased by ₹67.43 crore to ₹75.51 crore and finance costs increased by ₹0.28 crore to ₹1.95 crore. Cost of materials was unchanged, and the quarter had no exceptional item.

Other income increased by ₹37.39 crore to ₹37.53 crore, while tax increased by ₹5.61 crore to ₹10.31 crore. The filing did not state a reason for the increase in other expenses. Management later said the Q4 consolidated PBT of ₹11 crore included ₹11-12 crore of one-time auditor-driven provisions; the reported PBT was ₹10.98 crore.

Against Q3 FY25, total expenses rose by ₹28.11 crore to ₹230.90 crore, led by a ₹57.84 crore increase in other expenses and a ₹17.06 crore increase in employee cost. Depreciation increased by ₹10.45 crore, while finance costs fell by ₹0.47 crore. Other income rose by ₹35.24 crore and tax rose by ₹7.95 crore.

How did Allied Digital Services do in FY25 as a whole?

For FY25, consolidated revenue was ₹807.07 crore, up 17.5% from ₹687.06 crore in FY24, while total income increased 23.7% to ₹851.67 crore from ₹688.22 crore. PBT fell 3.5% to ₹60.76 crore from ₹62.96 crore.

FY25 PAT declined 30.0% to ₹32.1 crore from ₹45.84 crore in FY24, and basic EPS fell 39.9% to ₹4.98 from ₹8.29. Management said FY25 included a ₹5.5 crore deferred tax charge and more than ₹20 crore of foreign-exchange loss.

What do the balance sheet and cash flow show?

At 31 March 2025, total assets were ₹925.34 crore, compared with ₹834.08 crore at 30 September 2024. Total equity was ₹646.38 crore against ₹635.45 crore, while borrowings increased to ₹72.13 crore from ₹54.87 crore. Cash rose to ₹188.13 crore from ₹158.27 crore.

Inventories were ₹49.12 crore at the end of FY25, compared with ₹50.4 crore at 30 September 2024. Trade receivables increased to ₹187.54 crore from ₹146.91 crore, and trade payables rose to ₹64.48 crore from ₹48.33 crore.

FY25 operating cash flow was ₹92.26 crore, compared with ₹67.61 crore in FY24. Investing cash flow was an outflow of ₹12.4 crore against ₹2.93 crore, financing cash flow was an outflow of ₹18.44 crore against ₹10.23 crore, and capital expenditure was ₹3.73 crore against ₹3.29 crore.

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

Revenue rose in each of the last five quarters on a year-on-year basis. Across the reported series, revenue reached its highest point at ₹220.57 crore in Q3 FY25 before falling to ₹204.35 crore in Q4 FY25, while the lowest quarterly revenue was ₹169.0 crore in Q1 FY24.

Quarterly profit after tax peaked at ₹17.71 crore in Q3 FY25 and moved to a net loss of ₹7.61 crore in Q4 FY25; the lowest result in the series was also the Q4 FY25 loss. The EBITDA margin peaked at 13.8% in Q4 FY24 and fell to -4.6% in Q4 FY25, after reaching 11.4% in Q3 FY25.

Which businesses drove the quarter?

The Services segment reported revenue of ₹161.31 crore, up 15.7% from ₹139.45 crore in Q4 FY24, and EBIT of ₹34.47 crore against ₹27.51 crore. Its reported EBIT margin was 21.4%.

Solutions reported revenue of ₹43.04 crore, up 15.4% from ₹37.31 crore in Q4 FY24, while EBIT was ₹4.96 crore compared with ₹5.07 crore. The reported EBIT margin was 11.5%. Unallocated revenue was ₹37.53 crore, against ₹0.14 crore in the year-ago quarter, and reported EBIT was ₹0 crore.

What else did the company announce?

The board recommended a dividend of ₹1.50 per equity share of ₹5 each for FY25, subject to shareholder approval at the annual general meeting. The company also re-appointed K P M R & Co. as internal auditors for FY 2025-26 and appointed Parikh & Associates as secretarial auditors for FY 2025-26 through FY 2029-2030, subject to shareholder approval.

The board recommended second five-year terms for Milind Madhav Kamat and Swanubhuti Jain as non-executive independent directors. It also recommended five-year terms for Nitin Dhanji Shah as Managing Director and Tejal Prakash Shah as Executive Director. These appointments were subject to shareholder approval.

On 5 June 2025, the board approved the audited consolidated financial results for the quarter and financial year ended 31 March 2025, together with the consolidated cash-flow statement, balance sheet, auditors’ reports and statement on the impact of audit qualifications. The company also corrected tax-related figures in its standalone results because of human error.

What did the auditors point out?

The auditors issued a qualified opinion on the consolidated financial results for the quarter and year ended 31 March 2025. They said that, except for the impact of matters in the “Basis of Qualified Opinion,” the statement presented the results under Regulation 33 of the SEBI Listing Regulations and gave a true and fair view of net profit or loss and other financial information.

The qualifications cited non-compliance with Ind-AS 8 in relation to prior-period adjustments, delayed filing of consolidated financial results, an approximately Rs. 610 lakh difference between GST input tax credit and the GST portal, and interest-free loans to certain companies that were not in compliance with Section 186(7) of the Companies Act, 2013. The amount outstanding on those loans as on 31 March 2025 was Rs. 11,625 lakhs.

The auditors said they could not verify the correctness and recoverability of the recognised input tax credit because a reconciliation statement and supporting documentation were absent. The qualification was described as appearing for the first time. Management said the quantified impact had been adjusted in the current results, while it could not quantify the impact of the remaining paragraphs.

What did Allied Digital Services' management say?

Management reaffirmed a revenue target of ₹1,000 crore in the next four to five quarters and set a quarterly run-rate target of ₹250 crore. It maintained EBITDA margin guidance of 11-12% for FY26 and said no major capital expenditure was planned, with cash preserved for potential acquisitions.

Nehal Shah said the Pune Smart City engagement exceeded ₹500 crore after an additional ₹80 crore change request in May 2025. Management also said Q4 order intake was ₹133 crore and that a large US contract worth $45-50 million was in the pipeline. The India business was described as crossing ₹300 crore with 28% year-on-year growth.

CFO Gopal Tiwari said the quarter included ₹11-12 crore of one-time auditor-driven provisions and that underlying PBT would have been ₹20-23 crore. He said this was a one-time phenomenon and that PAT would improve in coming periods. Management identified margin pressure during product delivery, inflation, competition, foreign-exchange volatility, higher tax incidence and prior-period restatement noise as risks.

Nehal Shah said: “We are leading steadily towards our Rs. 1,000 crore top-line revenue. And we feel and we expect maybe one quarter here or there, we should be on the track to reach the milestone in the next four to five quarters.” Gopal Tiwari said: “This is a one-time phenomenon. Going forward, it's not going to be remaining same. So, our PAT will improve considerably in coming periods.”

How did Allied Digital Services shares react?

The results were released after market hours, with the stock at ₹195.00 when the filing appeared. It rose 3.1% after five minutes, 4.2% after 15 minutes and 5.2% after 30 minutes. On the reaction day, it fell 9.3% from the previous close of ₹219.99; by the next day’s close it was down 11.7%, and over five sessions it was down 12.3%.

On the reaction day, the IT Enabled Services sector median fell 0.4%, while the Nifty Microcap 250 rose 0.1%. Allied Digital’s reaction-day move was 8.9 percentage points below the sector median. By the next day, the stock’s move was 10.6 percentage points below the sector median, and over five sessions it was 13.0 percentage points below it.

Earlier reaction-day moves were 16.6% on 31 January 2025, -4.6% on 28 October 2024, -6.8% on 30 July 2024 and -0.1% on 23 May 2024.

How did other IT Enabled Services companies do?

A total of 62 IT Enabled Services companies were compared, and their median revenue growth was 13.6%. Among the other companies, 33 grew more slowly than Allied Digital and 29 grew faster than Allied Digital.

Of the 59 peers for which profit was compared, 35 reported higher profit.