Allied Digital Services Q2 FY27 Results

Revenue grew 14% YoY to Rs 265 crore, while net profit (PAT) declined 18% to Rs 13 crore.

Reader Takeaway: Revenue growth in global markets and services is promising, but domestic weakness and margin pressure remain key hurdles.

What just happened

Allied Digital Services posted its Q2 FY27 results, revealing a clear divergence between revenue expansion and profitability. While top-line growth reached Rs 265 crore, driven by a 31% surge in services revenue, the bottom line suffered due to margin compression. The EBITDA margin tightened to 10% from 12% in the same quarter last year.

Why this matters

The company is successfully pivoting toward higher-value international and non-government business, with "Rest of the World" revenue climbing 35% to Rs 203 crore. Conversely, domestic government revenue slumped 37% to Rs 34 crore. The shift in business mix is evident in the order book, which grew by Rs 74 crore during the quarter through new wins and contract renewals.

Strategic Developments

Allied Digital has secured key partnerships in the US market to provide cybersecurity and managed IT services from its offshore centers. Additionally, the firm signed a deal to implement an AI-powered service desk for a healthcare provider and a system integration contract with the Maharashtra Industrial Development Corporation (MIDC).

Risks to watch

Investors should monitor the ongoing margin contraction. Management noted that while demand for cybersecurity and automation is robust, global decision cycles for new technology investments are extending, which could impact the pace of growth in coming quarters.

Context metrics

• H1 Revenue: Rs 526 crore (up 16% YoY).
• Services Revenue: Rs 232 crore (up 31% YoY).
• Solutions Revenue: Rs 33 crore (down 42% YoY).