Alldigi Tech Q2 FY27 Earnings Call — Analysis (NSE: ALLDIGI)
Alldigi Tech reported strong Q2 FY27 profitability with PAT surging 50.9% YoY to ₹26.6 Cr and EBITDA margins expanding 580 bps to 30.2%, supported by international expansion and an announced ₹48 Cr share buyback.
Result quality: stable — Results context unavailable. Management sentiment: optimistic.
The take
Q2FY27 Consolidated Revenue ₹153.3 Cr ( +4.0% YoY ) . New guidance — FY29 tech & digital segment 3-year r… early double-digit . New story: Domestic BPM Portfolio Rationalisation .
Results
Revenue grew 4.0% YoY to ₹153.3 Cr, while EBITDA rose 28.5% YoY to ₹46.3 Cr (30.2% margin) and PAT increased 50.9% YoY to ₹26.6 Cr.
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Consolidated Revenue | ₹153.3 Cr | +4.0% | yoy · Q2FY27 · vs Q2FY26 |
| Consolidated Revenue | ₹153.3 Cr | +2.0% | qoq · Q2FY27 · vs Q1FY27 |
| Consolidated Revenue | ₹303.6 Cr | +4.2% | yoy · H1FY27 · vs H1FY26 |
| EBITDA | ₹46.3 Cr | +28.5% | yoy · Q2FY27 · vs Q2FY26 |
| EBITDA Margin | 30.2% | +580bps | yoy · Q2FY27 · vs 24.4% in Q2FY26 |
| PAT | ₹26.6 Cr | +50.9% | yoy · Q2FY27 · vs Q2FY26 |
| PAT Margin | 17.3% | +530bps | yoy · Q2FY27 · vs 12.0% in Q2FY26 |
| Tech & Digital Revenue | ₹41.7 Cr | +12.9% | yoy · Q2FY27 · vs Q2FY26 |
| BPM Revenue | ₹111.6 Cr | +1.0% | yoy · Q2FY27 · vs Q2FY26 |
| Operating Cash Flow | ₹37.1 Cr | point_in_time · Q2FY27 · 80% of EBITDA | |
| Cash and Liquid Funds | ₹127.2 Cr | point_in_time · Q2FY27 · Sep-26 | |
| New Business ACV Booked | ₹37.2 Cr | +86.5% | yoy · Q2FY27 · vs Q2FY26 |
Guidance
Management targets early double-digit revenue growth in Tech & Digital over the next 3 years while continuing to rationalise low-margin domestic BPM contracts.
What management committed to
- In terms of the growth rate... for the next 3 years term, again, we should look at an early double-digit growth, specifically as a [Tech & Digital] segment. — early double-digit, FY29
- On Workday... We are currently undergoing the design batch. So the design batch is something which should be completed by mid of November [2026]. — Q3FY27
- Board of Directors of the company has approved a proposal to buy back shares of up to 4.8 lakh equity shares at INR1,000 per share, representing an INR48 crore in share consideration. — INR48 crore, H2FY27
- So we paid close to INR35 crores [in lease payments] in FY '26... whatever current lease that we have, we're going to be in the same range [for FY27]. — close to INR35 crores, FY27
- On the [Build-Operate-Transfer contract]... it's relationship over 1,000 FTEs, which is expected to grow at least by another 2 or 3x [to 3,000-4,000 FTEs]. — 3,000 to 4,000 FTEs, FY28
Key themes
International mix shift and margin expansion
How the narrative shifted
- Domestic BPM Portfolio Rationalisation: Management is deliberately shedding or restructuring low-margin domestic BPM contracts to structurally lift consolidated EBITDA margins.
- International Expansion & Revenue Mix: International operations now drive 70% of consolidated revenue and are scaling via new leadership and dedicated sales teams in the US and Southeast Asia.
- Tech & Digital SaaS Transformation: Launching Alldigi 360 HCM SaaS and standalone AI analytics to cross-sell to existing payroll clients and expand revenue per customer.
- AI Infusion and Operational Efficiency: Integrating AI into hiring, training, and service workflows to maintain cost parity with global competitors and enhance customer outcomes.
- Capital Allocation & Shareholder Returns: Returning surplus cash to shareholders via a ₹48 Cr buyback while maintaining an unleveraged balance sheet.
Operational commentary
- International business contribution rose to ~70% of consolidated revenue (vs ~63% last year), driven by 15.1% YoY international revenue growth.
- Launched Alldigi 360 (SaaS HCM suite including payroll) and Alldigi 360 Analytics (AI-driven standalone analytics layer) in October 2026, rebranding from Aeonox and Meridian.
- Strengthened GTM with a new Chief Business Officer for BPM, expanded U.S. sales leadership from the BPM industry, and deployed dedicated sales teams in Southeast Asia.
- Secured an assisted captive / Build-Operate-Transfer (BOT) engagement of ~₹16.8 Cr with over 1,000 FTEs currently, with potential expansion up to 3,000-4,000 FTEs (3-4x).
- Maintains Workday Silver certification with the design badge scheduled for completion by mid-November 2026; currently has 4 pipeline clients for Workday connector integration.
- Processed 51.1 lakh employee records in Q2 FY27 (+7.2% YoY) and 101.3 lakh in H1 FY27.
- Domestic BPM revenue dropped 33% YoY due to deliberate rationalisation and exiting of low-margin customer engagements.
Analyst Q&A
Q. Explanation for the divergence between headcount decrease and the sharper ₹5 Cr QoQ reduction in employee costs.
Attributed to lower replacement hiring costs, resource optimization in high-cost locations like Manila, true-up benefits from retiral benefit valuations, and partial-quarter impact of mid-Q2 headcount reductions.
Q. Status and outlook for rationalising domestic BPM business and international BPM margin trajectory.
Domestic exit is an ongoing exercise focusing on phasing out non-profitable contracts while retaining margin-accretive accounts; international BPM margins will continue upward as domestic share contracts.
Q. Expected conversion timeline of the ₹82.6 Cr H1 ACV into revenue.
BPM contracts ramp up within 3 to 4 months, whereas Tech & Digital takes longer due to client-side technology integration, but all booked contracts are assured revenue over the next 2-4 quarters.
Q. Reasons behind the ~46% increase in standalone trade receivables in H1.
DSO improved by 3 days overall; higher trade receivables were driven by business acceleration in the latter half of the quarter and conversion of accrued unbilled revenue into billed receivables.
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