📌 At a Glance
Alldigi Tech Ltd (formerly Allsec Technologies) is your classic outsourcing dinosaur that somehow became a dividend-paying, high-ROE beast. Backed by Quess Corp and Fairfax, it quietly runs BPO/KPO operations across India, the US, and the Philippines – while sporting a 27.9% ROE, 31.9% ROCE, and a 4.88% dividend yield. Who knew payroll processing could be so sexy?
1️⃣ Introduction: BPO, But Make It Buffett-Style
Alldigi doesn’t make EVs, drones, or AI chips. It makes calls, payroll slips, and quiet money.
- Once known as Allsec Technologies, it now hides behind a cooler name: Alldigi Tech.
- Offers back-office services, HR/payroll outsourcing, contact center management, and customer lifecycle management.
- No hyped narrative. Just 13% 5Y sales CAGR and 10% 5Y PAT CAGR.
And here’s the kicker – it’s backed by Quess Corp, a ₹17,000 Cr HR tech powerhouse, which is in turn backed by Fairfax India (Prem Watsa’s group).
Basically, it’s the smallcap that your fund manager ignored because it doesn’t say “SaaS”.
2️⃣ WTF Do They Even Do? (Business Model)
Alldigi = Your Outsourcing Wingman™ 🧑💻
📦 Services Offered:
- Voice + Non-Voice BPO – Telecalling, CRM, customer service.
- KPO – HR services, analytics support.
- HRO (Human Resource Outsourcing) – Payroll processing for over 1 million employees/month.
- ITeS – Backend tech for US, EU and Asia-based corporates.
🌎 Delivery Centers:
India (Chennai, Bangalore, NCR) + Philippines + US
💼 Clients:
- Mostly large enterprises (many from Fortune 100)
- 4,000+ employees servicing across time zones
📊 Revenue Mix:
- 60% India
- 30% International
- 10% Others (HRMS tools etc.)
3️⃣ Financials: Compounding Like Clockwork ⏱️
🧾 Profit & Loss Snapshot (₹ Cr)
| FY | Revenue | EBITDA | Net Profit | EPS (₹) | OPM % | ROE % |
|---|---|---|---|---|---|---|
| FY21 | ₹277 | ₹66 | ₹35 | 23.05 | 24% | 17% |
| FY22 | ₹317 | ₹80 | ₹36 | 23.39 | 25% | 22% |
| FY23 | ₹390 | ₹89 | ₹49 | 32.06 | 23% | 25% |
| FY24 | ₹469 | ₹116 | ₹64 | 42.00 | 25% | 28% |
| FY25 | ₹546 | ₹130 | ₹83 | 54.66 | 24% | 28% |
🧠 EduTakeaways:
- 3Y Profit CAGR = 28%
- 5Y ROE = 21% – That’s HDFC Bank-level capital efficiency
- OPM steady at 23–25%, no surprises, no drama.
4️⃣ Valuation: Is It Cheap, Meh, or Crack?
CMP ₹923
EPS FY25 = ₹54.66
P/E = 16.9x (forward) – dirt cheap for 28% ROE and growing dividend payout
Let’s benchmark 👇
| Company | P/E | ROE % | OPM % | Div Yield |
|---|---|---|---|---|
| eClerx Services | 31.9x | 23.8% | 24% | 0.03% |
| Firstsource | 46.1x | 15% | 15% | 1.04% |
| One Point One | 40.4x | 12% | 24% | 0.00% |
| Alldigi Tech | 20x | 27.9% | 24% | 4.88% ✅ |
📊 Fair Value Calculation:
1. P/E Method
- FY25 EPS = ₹54.66
- Reasonable P/E range = 20–25
- FV Range = ₹1,093 – ₹1,366
2. EV/EBITDA Method
- FY25 EBITDA ~ ₹130 Cr
- EV/EBITDA fair range = 10–12x
- Implied EV = ₹1,300 – ₹1,560 Cr
- Add cash, subtract debt → Equity Value ≈ ₹1,400 – ₹1,700 Cr
- Per Share = ₹918 – ₹1,114
🎯 Final EduInvesting FV Range: ₹950 – ₹1,150
CMP ₹923 → Stock is fairly priced to mildly undervalued, and you’re getting paid 5% dividend to wait.
5️⃣ What’s Cooking – News, Triggers, and Drama
- 📣 Rebranding to “Alldigi”:
New name, same game. Aims to reposition as a digital-first outsourcing play. - 📈 May 2025 Earnings Call:
- ~18% YoY growth in BFSI and Telecom segments
- Growth visibility in HRO from GCC expansion
- Confident about margin retention despite wage hikes
- 💸 Dividend Magnet:
- ₹40/share paid in FY25 = 4.88% yield
- Payout ratio = 82% → basically giving profits back to shareholders
- 👥 Shareholder Base:
- Promoters (Quess) = 73.4%
- DIIs slowly entering (~1.3%)
- Public = 24% but slowly declining = tighter float = 💥 potential
6️⃣ Balance Sheet: Clean, Calm & Canadian Backed
📊 Snapshot:
| Metric | FY25 Value |
|---|---|
| Debt | ₹63 Cr |
| Cash & Inv. | ₹83 Cr |
| Net Cash | ₹20 Cr |
| Reserves | ₹244 Cr |
| Total Assets | ₹419 Cr |
| Equity Cap. | ₹15 Cr |
🧾 Leverage? Minimal.
🧠 Capex? Self-funded.
7️⃣ Cash Flow: Making It, Keeping It
| Year | CFO (₹ Cr) | FCF (Est.) | CFI | CFF | Net Cash Flow |
|---|---|---|---|---|---|
| FY24 | ₹91 | ~₹63 | -₹28 | -₹71 | -₹8 |
| FY25 | ₹118 | ~₹80 | -₹22 | -₹97 | -₹0.3 |
💡 Dividend-heavy = cash drain, but operational engine is spinning beautifully.
8️⃣ Ratios – Sexy or Stressy?
| Ratio | FY25 Value |
|---|---|
| ROCE | 32% ✅ |
| ROE | 28% ✅ |
| Dividend Yield | 4.88% ✅ |
| P/E (fwd) | ~17x ✅ |
| Working Capital Days | 81 ⛔️ |
| Cash Conv. Cycle | 48 Days |
| Promoter Holding | 73.4% ✅ |
🚩 Only Watchlist Red: Working capital stretch (52 → 81 days).
Could be due to overseas collections or client mix.
9️⃣ EduInvesting Verdict™
✅ 5-star capital efficiency
✅ 5% dividend yield
✅ Fairfax-Quess parentage
✅ Global client base, real margins
✅ No debt nonsense
🚫 No hyper-growth narrative
🚫 Not institutionally discovered yet
🚫 Working capital trend = watch closely
🎯 FV Range: ₹950 – ₹1,150
CMP ₹923 → Attractive yield + clean balance sheet = hidden BPO gem.
If this listed on Nasdaq with the word “AI” in its filings, it’d be 40x P/E by now.
✍️ Written by Prashant | 📅 27 June 2025
Tags: Alldigi Tech, Allsec Technologies, Quess Corp, Fairfax India, Dividend Stocks India, BPO Stocks, High ROE, EduInvesting, Outsourcing Industry, Smallcap Compounder
