Alldigi Tech Reports Strong FY26 Results with Soaring Margins

Alldigi Tech Ltd announced its FY26 revenue reached INR 598.7 Cr, representing a 9.6% year-on-year growth. The company also achieved a significant expansion in EBITDA margins, climbing to 27.1% from 23.7% in FY25. This margin surge was driven by strategic exits from low-margin domestic contracts and operating leverage, though revenue concentration presents a potential risk.

FY26 Financial Highlights

Alldigi Tech Ltd has released its financial results for the fourth quarter and the full fiscal year 2026. The company posted consolidated revenue of INR 598.7 Cr for FY26, reflecting a healthy 9.6% year-on-year growth.

This growth was broad-based, with contributions from both its Business Process Management (BPM) and Tech & Digital segments.

The company reported significant margin expansion, with EBITDA margins improving from 23.7% in FY25 to 27.1% in FY26. Management attributed this improvement to operating leverage, scale benefits, and strategic realignment.

The international business share grew to 67% of total revenue. Within the BPM segment, international markets now contribute 78% of total CXM revenue.

In its Tech & Digital segment, Alldigi Tech processed 191.5 lakh employee records in FY26 and added INR 40.1 Cr in new Annual Contract Value (ACV).

The BPM segment is strategically exiting low-margin domestic contracts, which now represent 10% of its portfolio.

Strategic Pivot Towards Profitability

Alldigi Tech's shift from volume to value is becoming clear. By intentionally exiting low-margin domestic BPM contracts, the company is trading some revenue volume for demonstrably higher profitability.

This focus on higher-margin international business and operational efficiencies positions the company for more sustainable and profitable growth, signaling a move toward a quality-focused business model.

Background: Strategic Moves

During FY26, Alldigi Tech undertook a significant strategic realignment. This involved the deliberate exit from low-margin domestic BPM contracts to focus on more lucrative international markets.

Concurrently, the company has been investing in its operational capabilities. The deployment of the SP4 platform and HRMS Version 2 within the Tech & Digital business aims to drive efficiency gains.

What Investors Can Expect

Shareholders can anticipate a greater emphasis on profitability over sheer revenue volume.

The increased share of international business (67% consolidated, 78% BPM CXM) indicates a growing global footprint.

The Tech & Digital segment's growth, driven by new customer acquisition, suggests potential for sustained expansion.

Efficiency improvements from new platforms are expected to bolster future margin performance.

Planned capital expenditure for a new Chennai office signals investment in future capacity and growth infrastructure.

Potential Challenges

The ongoing rationalization of low-margin domestic BPM contracts may lead to further headcount reductions in the BPM segment.

Global macroeconomic conditions and geopolitical conflicts could potentially delay customer decisions and impact business momentum.

The Tech & Digital segment's reliance on new customers for 90% of its FY26 growth indicates a potential risk if the existing client base plateaus.

Competitive Landscape

While peers like Hinduja Global Solutions and Quess Corp operate in similar spaces, Alldigi Tech's current EBITDA margin of 27.1% stands out, especially given its smaller revenue base (FY26 INR 598.7 Cr) compared to these diversified players.

Its strategic focus on exiting low-margin business differentiates its profitability trajectory from many competitors.

Key Performance Metrics

• FY26 Consolidated Revenue: INR 598.7 Cr
• FY26 Consolidated EBITDA Margin: 27.1%
• International Business Share (FY26): 67% of total revenue
• BPM Segment Margin Target: 13-14%
• Projected Capex (FY27): INR 20-25 Cr

Looking Ahead: What to Watch

• Alldigi Tech's ability to achieve its targeted "mid-teens" revenue growth for FY27.
• The company's success in realizing an additional 1% to 2% margin improvement in FY27.
• Progress on securing large client wins within the BPM growth pipeline.
• The realization of INR 3 Cr in annual efficiency gains from the SP4 and HRMS V2 platforms.
• The continued impact of rationalizing low-margin domestic BPM contracts on the segment's performance.
• Execution of plans for the new Chennai office to support growth.