Allied Digital Q1 FY27 Results (NSE: ADSL)
Signal: Growth decelerated
The read
The growth engine is shifting toward higher-growth ROW, Services and non-government work—ROW revenue rose 36%, Services 30% and non-government revenue 45%—but the thesis remains margin-constrained: EBITDA grew 18% while the 9.7% margin was only 10 bps below Q1FY26, and PAT fell 14% to ₹11.43 Cr.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹260.49 Cr | 19% | -3% |
| EBIT | ₹20.33 Cr | N/A | |
| Net profit | ₹11.43 Cr | -14% | |
| EPS | ₹2.19 | -14.4% | |
| EBIT margin | 9.7% |
P&L walk
Revenue increased to ₹260.49 Cr, +19% YoY but -3% QoQ, led by ROW and Services; EBITDA reached ₹25.35 Cr, +18% YoY, while the 9.7% margin was broadly flat YoY and below Q4FY26's 12%, leaving PAT at ₹11.43 Cr, -14% YoY.
Segments
Services drove the consolidated momentum with revenue of ₹215 Cr, +30% YoY, while Solutions revenue declined 17% to ₹45 Cr; ROW revenue grew 36% to ₹189 Cr and non-government revenue grew 45% to ₹214 Cr, offsetting India and government declines.
Key positives
- ₹120+ Cr of new wins and renewals were booked in the quarter, including enterprise applications, workplace services, managed services, IT asset management and infrastructure support engagements.
- ROW revenue reached ₹189 Cr, +36% YoY, materially outpacing consolidated revenue growth of 19%.
- Services revenue rose 30% YoY to ₹215 Cr and non-government revenue rose 45% to ₹214 Cr, indicating stronger commercial-sector momentum.
- Consolidated EBITDA increased 18% YoY to ₹25.35 Cr despite the selective spending environment, and the PAT-to-EPS check was clean.
Key concerns
- EBITDA margin was 9.7%, only broadly stable versus 10% in Q1FY26 and down from 12% in Q4FY26, so revenue growth has not yet translated into margin expansion.
- PAT declined 14% YoY to ₹11.43 Cr despite 19% revenue growth and 18% EBITDA growth, requiring improved conversion from operating profit to net profit.
- India revenue declined 11% YoY to ₹71 Cr, government revenue declined 35% to ₹46 Cr, and Solutions revenue declined 17% to ₹45 Cr.
- The consolidated margin of 9.7% was materially below standalone margin of 16.8%, indicating that subsidiaries or overseas operations dilute group profitability.
Research and educational content only. Not investment advice.