Allied Digital Posts 20% Revenue Jump to ₹968 Cr in FY26, Resolves Audit Issues

TECHNOLOGY
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AuthorVihaan Mehta|Published at:
Allied Digital Posts 20% Revenue Jump to ₹968 Cr in FY26, Resolves Audit Issues
Overview

Allied Digital Services reported a strong 20% year-on-year revenue increase to ₹968 crore for FY2026. The company has also cleared past audit issues by converting ₹112 crore of loans into equity, aiming for a clean audit report within six months. Management is integrating 'Agentic AI' to boost efficiency, anticipating a 20-25% reduction in workforce.

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Allied Digital Services: FY2026 Results Show Strong Growth and Audit Resolution

Allied Digital Services announced its financial results for the fiscal year 2026, revealing a significant 20% year-on-year increase in consolidated revenue to ₹968 crore. Profit After Tax (PAT) also saw a positive trend, growing 10% to ₹36 crore.

Key Financial Highlights

The company reported adjusted EBITDA of ₹112 crore and Profit Before Tax (before exceptional items) of ₹81 crore for FY2026. New orders and contract renewals secured in the fourth quarter of FY2026 contributed ₹166 crore to the company's backlog.

Resolving Audit Concerns

A critical development for Allied Digital is the resolution of previous audit qualifications, which stemmed from issues related to Section 186 of the Companies Act and FEMA regulations concerning non-interest-bearing loans. The company addressed these by converting ₹112 crore of these loans into equity. This move is expected to pave the way for a clean audit opinion within the next two quarters, significantly enhancing the company's governance and investor confidence.

Strategic Shift Towards AI

Looking ahead, Allied Digital is making a strategic pivot towards 'Agentic AI' architecture. This initiative is designed to improve operational efficiency, with management projecting a 20% to 25% reduction in resource headcount over the next 6 to 12 months. This focus on AI is a key component of the company's strategy to potentially expand EBITDA margins to the targeted 13%-15% range.

Growth Prospects and Potential Risks

Allied Digital reported a robust pipeline of contracts, particularly in Maharashtra, valued at over ₹2,000 crore. A significant government contract in Mumbai, estimated at ₹150-200 crore, is also anticipated soon. However, the company faces risks, including executing its ambitious AI plans, managing the volatility of equipment procurement costs (which saw a 25-30% increase in the Western Railway project), and sustaining momentum in securing government contracts. External geopolitical factors may also influence operations.

Shareholder Returns

The board has decided to maintain the dividend payout at ₹1.50 per equity share, representing a 30% dividend for FY2026.

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