Alldigi Tech Navigates Growth with Strategic Investments in Q2 FY26

Alldigi Tech Limited, formerly Allsec Technologies, has once again demonstrated its resilience and strategic foresight, reporting its tenth consecutive quarter of robust financial performance for Q2 and H1 FY26. The company's revenue from operations for the half-year reached INR 291 crore, marking a significant 12% year-on-year growth. This strong top-line expansion was complemented by a healthy 17% year-on-year increase in EBITDA, which stood at INR 73 crore. The company's strategic emphasis on international markets continues to bear fruit, with the international business contributing a growing share to the overall revenue mix.

Both the Business Process Management (BPM) and Tech & Digital segments have been pivotal in driving this growth. The BPM segment recorded an 11.1% year-on-year revenue increase in Q2, fueled by deeper penetration into the healthcare sector and strong international performance, where revenue grew by 16.1% year-on-year. The Tech & Digital segment also showed impressive momentum, with Q2 revenue up 15.3% year-on-year. This segment saw a substantial addition of approximately 4.30 lakh employee records, underscoring its operational strength and market leadership. The company's consistent focus on operational efficiencies is evident, with employee records processed per FTE improving by 5% year-on-year.

Strategic Initiatives and Operational Excellence

Alldigi Tech's growth narrative is strongly supported by its ongoing strategic initiatives and commitment to operational excellence. The successful migration of India-based customers to the Smart Pay 4 platform is a key highlight, promising enhanced efficiency and faster payroll processing. Furthermore, the upgrade of HRMS to version 2 and the integration of AI in payroll operations through PulseHR.ai are set to modernize their offerings, attracting new clients and improving user experience. The company has already onboarded new clients onto this advanced platform, with several going live.

Investments in infrastructure, such as the upgrades in Bangalore and planned enhancements for Chennai and Noida facilities, are critical for supporting future growth and maintaining high service standards for international clients. These capital expenditures, while impacting short-term profitability through increased depreciation, are viewed as essential for long-term benefits, including higher sales and improved client confidence. The company's recognition by Everest Group's PEAK Matrix® Assessment 2025 as a 'Star Performer' for Multi-Country Payroll Solutions further validates its strategic direction and market position.

Navigating Challenges and Future Outlook

Despite the strong performance, Alldigi Tech is proactively addressing certain challenges. The dip in Tech & Digital segment profitability in Q2 was attributed to strategic investments in leadership and sales resources, which are expected to yield returns in subsequent quarters. The management is also mindful of the increasing depreciation expenses, which have significantly risen year-on-year, impacting the Profit Before Tax (PBT). They emphasize a disciplined approach to capital allocation, ensuring that investments translate into sustainable growth and improved bottom-line performance.

Looking ahead, Alldigi Tech is confident in its ability to sustain growth in the mid-to-high teens for revenue and improve EBITDA margins by 100-150 basis points. The company's strategy involves deepening client relationships, expanding global reach, driving efficiencies through technology and AI, and building a future-ready team. With a scaled platform, expanded sales channels, and a strong execution culture, Alldigi Tech is well-positioned to capitalize on market opportunities and continue its trajectory of superior financial and operational performance.

Key Segment Performance (INR Crore)

Alldigi Tech's Q2 FY26 performance underscores its strategic clarity and disciplined execution. The company's focus on enhancing its technological capabilities, expanding its international footprint, and optimizing operational efficiencies positions it for continued success in the dynamic outsourcing solutions market. Investors can look forward to sustained growth and improved profitability as these strategic initiatives mature.