1. At a Glance
Allied Digital Services Ltd (ADSL) is that classic Indian IT stock that looks boring until you open the filings—and then suddenly there’s drama, overseas contracts, smart city projects, auditor comments, and a stock price that has politely walked down a staircase instead of using the lift.
As of Q3 FY26, the company sits at a market cap of ~₹733 crore, with the stock hovering around ₹130, down ~26% in the last three months and a brutal ~53% over one year. Sales for the latest quarter came in at ₹247 crore, up 12.2% YoY, while PAT slipped 18.2% YoY to ₹14.5 crore.
Valuations look deceptively calm: P/E ~20, EV/EBITDA ~6.2, Price-to-Sales ~0.8, and Dividend Yield ~1.16%. But dig deeper and you’ll find low ROE (~5.3%), chunky other income in some years, and auditors raising eyebrows over ₹136.98 crore of assets.
So what is this company really? A steady global IT services player temporarily misunderstood by the market—or a serial underperformer with great PowerPoint skills? Let’s find out.
2. Introduction
Allied Digital has been around since 1984, which in IT terms makes it a dinosaur that somehow survived multiple extinctions—dotcom crash, outsourcing waves, cloud migrations, and now AI hype.
The company positions itself as a global IT consulting and systems integration player, operating across 70+ countries, with ~68% revenue from overseas markets. Its bread and butter is not flashy consumer apps but the less glamorous, recurring-revenue world of managed services, infrastructure support, cybersecurity, cloud migration, and smart city solutions.
In theory, this is a beautiful business: sticky clients, long contracts, annuity-style cash flows. In practice, margins hover around 6–11% at the operating level, ROE refuses to cross double digits, and profits occasionally depend on “other income”—the corporate equivalent of saying “salary kam hai, par bonus aa jayega.”
Q3 FY26 added fresh masala:
- ₹250+ crore orders booked
- Exploration of Allied Inc restructuring / merger
- Auditor qualification on PPE worth ~₹136.98 crore
Investor curiosity is back. Investor confidence? Still loading.
3. Business Model
– WTF Do They Even Do?
Imagine you’re a global enterprise with 20,000 employees across 17 countries. Laptops break, networks crash, security threats pop up, and someone has to answer the helpdesk call at 3 a.m. That someone is Allied Digital.
What They Sell
- Infrastructure Management Services: End-user support, IT asset lifecycle, remote workplace services.
- Cloud Services: Cloud enablement, migration, management (AWS partnerships included).
- Cybersecurity: Threat intelligence, CERT-IN compliance, endpoint security, fraud & identity management.
- Integrated Solutions: Smart cities, safe cities, IoT, command & control centres.
- Software & Digital Services: ERP support, analytics, automation, AI-lite offerings.
Who Pays Them
- Enterprises (~82%)
- Government & PSU projects (~18%)
Revenue Mix FY24
- Services: ~83%
- Solutions/Projects: ~17%
Services give stability. Solutions give headlines—and occasionally cash flow headaches.
Lazy investor question: Is Allied Digital an IT services company or a government contractor in disguise?
4. Financials Overview
Quarterly Performance (Q3 FY26 – Consolidated, ₹ crore)
| Metric | Latest Qtr (Dec FY26) | YoY Qtr (Dec FY25) | Prev Qtr (Sep FY26) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 247 | 221 | 234 | 12.0% | 5.6% |
| EBITDA | 26 | 25 | 21 | 4.0% | 23.8% |
| PAT | 14 | 18 | 15 | -18.2% | -6.7% |
| EPS (₹) | 2.46 | 3.15 | 2.73 | -21.9% | -9.9% |
Margins improved sequentially, but profit slipped YoY thanks to tax and cost dynamics.
EPS Annualisation
Q1 FY26 EPS: 2.56
Q2 FY26 EPS: 2.73
Q3 FY26 EPS: 2.46
Average EPS = 2.58
Annualised EPS = 2.58 × 4 = ~₹10.33
At ₹130, that implies an effective P/E ~12.6x on annualised run-rate, which looks cheap—if profits behave.
Investor
