Allied Digital Q2 Revenue Up 14% YoY to ₹265 Cr

Quarter 2 FY27 (Q2):

First Half FY27 (H1):

Revenue: ₹526 crores, representing 16% year-on-year growth (highest ever H1 revenues in company history)
Profit Before Tax (PBT): ₹34 crores
Profit After Tax (PAT): ₹25 crores

Order Wins and Renewals:

Secured over ₹74 crores in new orders and renewals during Q2 FY27
Key developments include:
Strategic partnership in the U.S. to deliver infrastructure cloud and cybersecurity services through offshore delivery center
Engagement with U.S. healthcare service provider to implement and support 24/7 AI-powered service desk
Selected by MIDC (Maharashtra Industrial Development Corporation) as system integrator for implementation, maintenance and support of Internet leased line connectivity solution across Maharashtra
Renewal of several long-standing customer engagements across pharmaceuticals, BFSI, real estate and medical devices

Business Segments Performance:

Strategic Initiatives:

Strengthening sales organization and go-to-market capabilities to build healthier balance between partner-led, consortium-led and direct business
Focus on increasing contribution from direct customer engagements
Building on leadership augmentation taken up earlier in the year
Priorities include strengthening sales execution, expanding direct customer relationships, enhancing delivery capabilities, and accelerating integration of AI across services

Trade Receivables:

Declined to ₹264 crores as of September 30, 2026 (from ₹320 crores as of March 2026)
Debtor days improved to approximately 84 days (from 96 days at end of FY26)

Liquidity Position:

Cash and cash equivalents: ₹185 crores as of September 30, 2026 (compared to ₹162 crores a year earlier)
Gross borrowings: ₹167 crores (increased from ₹98 crores year earlier)
Company maintains positive net cash position

Market Environment:

Enterprises remain committed to modernization, automation and digital transformation but are more deliberate in investment decisions
Extended evaluation cycles for larger transformation programs due to rapid AI innovation and technology superseding
Customer inquiries remain robust but large contracts taking longer to conclude
Smaller and midsized opportunities converting relatively faster

Government Business Outlook:

Seeing renewed activity in government segment after delays due to equipment and hardware cost increases
OEM prices showing signs of stabilization
Noida Safe City bid submission scheduled for November 6, 2026
Pipeline looks "very, very encouraging" with many case studies moving from initial requirement to RFP stage

Growth Strategy:

Targeting 20% CAGR growth
Three-pronged approach: partner-led business for scale, direct enterprise relationships for longevity, and government business for large ticket sizes
Focus on quality and sustainability of growth with greater revenue visibility and operating leverage

AI Implementation:

Seeing 32% L1 ticket deflection and 21% cost-to-serve reduction from AI desk
Focus on parallel runs before reducing direct people costs
Strategy includes increasing automation, using AI for preventive problem solving, and developing agentic ecosystem

Order Book Concerns:

Management acknowledged order book decline from ₹120 crores to ₹74 crores
Attribute slowdown to cautious approach on government orders due to price increases affecting project viability
Note price stabilization since mid-October 2026, encouraging renewed bidding activity

Government vs Enterprise Mix:

Government projects typically have 60-40 revenue split (60% during 6-8 month build phase, 40% during 3-5 year maintenance phase)
Payments from government clients generally coming through without major delays
Enterprise customers provide longevity and stability despite smaller ticket sizes

Partnerships and M&A:

Mr. Nitin D Shah, Founder, Chairman & Managing Director
Mr. Ramanan Ramanathan, Global Head of Strategy for Growth, Innovation and Partnerships
Mr. Nehal Shah, Joint Managing Director
Mr. Gopal Tiwari, Chief Financial Officer