Alldigi Tech Q4 FY26: Margins Lead the Story as International Mix Rises

Alldigi Tech Limited, formerly Allsec Technologies, closed FY26 with a familiar outsourcing narrative but a sharper financial outcome. Revenue from operations for FY26 rose to INR 598.7 crores, up 9.6% year on year. The more important move was in profitability. EBITDA grew 25.0% to INR 162.0 crores and the EBITDA margin expanded to 27.1%, up 333 basis points.

In Q4 FY26, revenue was INR 154.7 crores, up 5.9% year on year and 1.3% quarter on quarter. EBITDA was INR 43.7 crores, up 24.2% year on year, with a margin of 28.2%. PAT for the quarter came in at INR 28.9 crores, up 49.7% year on year, with management linking the jump largely to a tax reversal.

A second theme ran alongside the numbers: international business is taking a larger share. The investor presentation notes international revenue mix of 67.3% in Q4 FY26 versus 63.6% in Q4 FY25, and 65.5% in FY26 versus 62.9% in FY25. Management reiterated that this is aligned with strategy, as international business tends to carry slightly higher margins.

FY26 performance: EBITDA expansion with steady growth

The company ended FY26 with a clear improvement in operating efficiency. Revenue growth was broad-based across both operating verticals, BPM and Tech and Digital, but the margin expansion suggests a stronger contribution from operating leverage and the business mix.

Operating cash flow remained healthy at INR 144.1 crores in FY26. The OCF to EBITDA conversion stood at 88.9% for the full year and 103.8% in Q4. Collections for FY26 were INR 626.1 crores, up 9.0% year on year. DSO, including billed and unbilled, improved to 73 days, an 8 day improvement year on year.

Management also clarified what drove the year on year revenue increase when currency effects were considered. The CFO stated that 3.3% of the FY26 growth was attributable to currency depreciation and 6.3% was attributable to company efforts.

Segment lens: Tech and Digital pulls ahead on growth and margins

Alldigi reports two core verticals: Tech and Digital, which includes payroll and HR outsourcing platforms, and BPM, which includes customer experience management and other business process services.

Tech and Digital was the faster growth engine in Q4 and retained its position as the higher margin business. FY26 Tech and Digital revenue was INR 156.2 crores versus INR 134.1 crores in FY25, a 16.5% year on year increase. Segment margin for FY26 was INR 66.6 crores, with a segment margin percentage of 42.7%.

In Q4, Tech and Digital revenue was INR 44.3 crores, up 22.3% year on year and 14.5% quarter on quarter, with a margin of 44.0%. Operationally, volumes continued to expand. The company processed 49.9 lakh employee records in Q4, taking FY26 to 191.5 lakh employee records. A key operating leverage indicator was stable headcount against rising volumes. Tech and Digital FTE was 689 in Q4, nearly flat year on year, while records processed grew 12.7%.

BPM remained a larger revenue contributor but growth was slower. FY26 BPM revenue was INR 442.4 crores, up 7.3% year on year. In Q4, BPM revenue was INR 110.4 crores, broadly flat year on year. However, international BPM revenue grew 8.7% year on year in Q4, offset by a decline in domestic.

Management described the BPM headcount decline as strategic. The CEO stated that the company is moving away from low margin business and intends to increase international business compared to domestic. They also indicated this pruning could continue through FY27.

Platforms and execution: AI and integration as margin levers

The investor presentation and the concall both focused on platforms and AI interventions as a route to higher efficiency rather than a marketing talking point.

Three initiatives were repeatedly referenced. First is PulseHR.ai, described as an AI led input consolidation mechanism across email and SFTP sources, covering multiple templates through to payroll push. The company indicated Ops UAT completion by 12 June 2026. Management called it predominantly internally focused, aimed at reducing manual interventions, improving turnaround time, and raising accuracy.

Second is HRMS V2. The company described HRMS V2 as an integrated console that brings HRMS and payroll together, reducing data reconciliation effort for clients and improving internal execution. The rollout plan was sequenced by geography, with Phase 1 India release in the first week of May 2026, followed by the Philippines in July and UAE in August.

Third is SP4 migration. The CEO stated that India customer migration has been completed. The presentation lists a Philippines product launch target of August 2026. Management explicitly linked platform deployments to efficiency, stating an expected INR 3 crores per annum efficiency gain in the Tech and Digital business.

These projects matter because the company is already showing operating leverage in Tech and Digital. If automation reduces manual work on input processing and improves integration between HRMS and payroll, the business can support higher volumes without proportional staffing increases.

What management said about FY27: growth intent with limited numeric precision

Management commentary leaned confident but did not provide a precise numeric forecast for FY27. The CEO stated the company should see mid teen revenue growth in FY27. He also stated Tech and Digital is expected to grow slightly faster than BPM.

On margins, the CFO reiterated the company typically targets 1% to 1.5% margin growth year on year. When asked if margins around the Q4 level could sustain, the CFO stated they expect margins to remain robust and did not foresee significant negative impact from currency fluctuations.

The company also discussed BPM growth dynamics. The CEO described BPM growth as step-like, depending on onboarding larger clients. While he said the pipeline includes large brands, he declined to provide a timeline due to macro uncertainty and delayed customer decisions.

On capex and depreciation, the CFO noted that office upgrades in Chennai and Noida are in progress and agreed that depreciation in FY27 should be within a sub 10% to 15% increase over FY26, subject to final approvals and implementation.

Takeaways

FY26 for Alldigi Tech was a year where profitability improved faster than revenue. EBITDA growth of 25% and margin expansion to 27.1% indicate stronger execution and a better business mix, especially with the steady increase in international contribution.

Tech and Digital continues to look like the margin anchor, supported by rising employee records processed and stable staffing. BPM is being repositioned, with management openly stating it is exiting low margin work and prioritizing international and verticalized opportunities.

The FY27 watchpoints are straightforward: whether the company can translate its AI and platform projects into measurable efficiency, whether Tech and Digital can sustain its growth rate, and whether BPM can land the next step-up client win without losing too much revenue during pruning.