🟢 At a Glance:
Allied Digital just dropped a FY25 report with ₹404 crore income and ₹43 crore profit. Sounds solid, right? But scratch the surface — and welcome to Accounting Narnia.
From interest-free loans to ghost-like forex gains, the company’s books look less like audited financials and more like a magician’s ledger.
🔧 About the Company
Allied Digital Services claims to be a “Global IT Transformation Architect.” But it turns out they’ve been transforming more than just IT — they’ve given new meaning to financial creativity.
What they didn’t transform:
- Their habit of giving out interest-free loans
- Their ₹20 crore forex losses (Oops! Forgot those!)
- Or their unexplained ₹45 crore rise in “other expenses”
🤹♂️ The Financial Illusion: FY25 (Standalone)
| 📊 Metric | FY25 | FY24 |
|---|---|---|
| Revenue from Operations | ₹366.15 Cr | ₹286.65 Cr |
| Other Income (👀) | ₹38.43 Cr | ₹1.23 Cr |
| Total Income | ₹404.58 Cr | ₹287.88 Cr |
| Total Expenses | ₹374.86 Cr | ₹257.12 Cr |
| Profit After Tax (PAT) | ₹43.37 Cr | ₹22.20 Cr |
| Earnings Per Share (EPS) | ₹7.77 | ₹4.01 |
➡️ Looks like a turnaround.
➡️ Smells like a cover-up.
🚨 RED FLAGS: THE HALL OF ACCOUNTING HORRORS
🔴 1. “Qualified” Love Letter from the Auditors
The auditor’s report isn’t a clean chit. It’s a giant 🚩 wrapped in polite legalese.
- Ind AS 8 Violation: They didn’t apply accounting standards for error corrections. Translation? “Oops, we forgot to fix the mess.”
- GST Credit Not Reconciled – ₹6 Cr: Either someone’s Excel stopped working, or there’s a tax officer sharpening their penalty pen.
- Interest-Free Loan to Subsidiary: If your business plan involves giving out free money, are you a company or Santa Claus?
🟥 2. Suspicious “Other Income” — The ₹38 Crore Mystery Box
This jumped from ₹1.2 Cr to ₹38.4 Cr. Why?
- Possibly forex writebacks
- Possibly nothing recurring
- Possibly someone found an old piggy bank under the server room floorboards
In a year when regular revenue rose ₹80 crore, this sudden windfall sticks out like a Bollywood actor in a Chartered Accountant exam.
🔻 3. ₹110 Crore Loan Posed as “Investment”
Let’s call it what it is — an unsecured love letter to the subsidiary.
- No clarity on returns.
- No interest charged.
- No timeline mentioned.
This “investment” is basically a giant invisible hole in the balance sheet. Want to know where your capital went? Maybe ask the auditors — they didn’t get an answer either.
🔥 4. The Vanishing ₹20 Cr Forex Loss
- Company: “We had a great year!”
- Auditor: “Bro… you didn’t record ₹20 crore of forex loss.”
- Company: “Shhh… no one reads those notes anyway.”
Classic “we’ll just not mention it and hope nobody sees it” strategy.
📉 5. Depreciation Errors of ₹6 Cr
How do you mess up depreciation in 2025 when even ChatGPT can calculate it?
This isn’t a slip. This is like driving your car in reverse through a toll booth and asking for cashback.
🧾 6. Deferred Revenue of ₹7 Cr – Not Recorded
That’s revenue received in advance which wasn’t deferred.
In English: they booked revenue they didn’t earn yet.
Welcome to Fantasy Accounting League: where revenue’s real even if the work isn’t done.
🕵️ 7. Other Expenses: From ₹22 Cr to ₹69 Cr (👻)
This is the biggest red flag.
- FY24: ₹22.84 Cr
- FY25: ₹69.26 Cr 😳
That’s a ₹46 crore spike with zero disclosure.
If you tripled your grocery bill overnight, you’d at least explain the wine tasting class. Allied? No comment.
🔍 Balance Sheet = Swiss Cheese
With this many holes:
- Forex losses not recorded
- Loans passed off as “investments”
- Deferred revenue ignored
- Other income inflated
- Massive undisclosed expenses
You might as well call it Allied Magical Services Ltd.
🎯 Fair Value Range: ₹38–₹54
EPS is ₹7.77 — but that’s assuming you believe it.
With this many red flags, P/E should be 5x–7x max, leading to a fair value range of:
🎯 ₹38 to ₹54 per share
That’s your discount for surviving a potential SEBI notice and a tax raid.
🧠 EduInvesting Take
“Allied Digital’s books look like they were audited by a magician and blessed by a fog machine.”
Sure, on the surface, it’s all profit, EPS, and growth. But inside? It’s accounting sorcery. Anyone holding this should carry a fire extinguisher… and a lawyer.
You exited at ₹300. Smart move. The new buyers? Best of luck explaining that “other income” to SEBI.
🧨 Final Roast:
- ✅ Revenue? Up.
- ✅ Profit? Up.
- ❌ Transparency? Down.
- ❌ Compliance? Non-existent.
- ❌ Trust? Broken.
