Allied Digital Q2 PAT falls 18% despite 14% revenue growth

Allied Digital Services Limited reported Q2 FY27 consolidated revenue of Rs 265.32 crore, up 14% year on year, while profit after tax (PAT) fell 18% to Rs 12.59 crore. Allied Digital’s lower other income, which fell by Rs 4.85 crore, and higher finance costs outweighed growth in operating earnings.

Why did Allied Digital’s Q2 FY27 PAT fall despite revenue growth?

Allied Digital’s PAT fell because the rise in operating earnings was offset by lower other income and higher costs below EBITDA. PAT was Rs 12.59 crore in Q2 FY27, compared with Rs 15.42 crore in Q2 FY26, while profit before tax (PBT) declined 17% to Rs 17.09 crore from Rs 20.56 crore.

Net revenue from operations increased by Rs 31.62 crore to Rs 265.32 crore in Q2 FY27 from Rs 233.70 crore a year earlier. Earnings before interest, tax, depreciation and amortisation (EBITDA), excluding other income, rose 14% to Rs 24.40 crore from Rs 21.32 crore, showing that operating earnings increased alongside revenue.

Other income fell 70% to Rs 2.11 crore in Q2 FY27 from Rs 6.96 crore in Q2 FY26. As a result, EBITDA including other income declined 6% to Rs 26.50 crore from Rs 28.29 crore, despite the Rs 3.08 crore increase in EBITDA excluding other income.

How did Allied Digital’s operating profitability change in Q2 FY27?

Allied Digital maintained its EBITDA margin excluding other income at 9% in Q2 FY27, unchanged from Q2 FY26. Total operating expenditure rose to Rs 240.93 crore from Rs 212.38 crore as quarterly revenue increased to Rs 265.32 crore from Rs 233.70 crore.

The EBITDA margin including other income declined to 10% in Q2 FY27 from 12% in Q2 FY26. This margin movement followed the reduction in other income to Rs 2.11 crore, while the company’s financial snapshot presents Q2 FY27 EBITDA rounded to Rs 27 crore and a 10% margin.

Depreciation and amortisation increased to Rs 5.17 crore from Rs 4.81 crore, and finance costs rose to Rs 4.24 crore from Rs 2.91 crore. Finance costs were Rs 1.33 crore higher year on year, while tax expense declined to Rs 4.50 crore from Rs 5.14 crore in Q2 FY26.

How did Allied Digital’s Q2 FY27 revenue mix change?

Allied Digital’s Q2 FY27 revenue growth was concentrated in Rest of World, Services and Enterprise categories. Rest of World revenue rose to Rs 203 crore, or 77% of revenue, from Rs 150 crore, or 64%, in Q2 FY26; India revenue declined to Rs 62 crore from Rs 84 crore.

Services revenue increased to Rs 232 crore in Q2 FY27 from Rs 177 crore a year earlier, raising its share to 88% from 76%. Solutions revenue fell to Rs 33 crore from Rs 57 crore, reducing its share to 12% from 24%, so the reported revenue increase was not spread across both disclosed segments.

Enterprise revenue rose to Rs 231 crore, or 87% of Q2 FY27 revenue, from Rs 180 crore, or 77%, in Q2 FY26. Government customer revenue declined to Rs 34 crore from Rs 54 crore, with its share falling to 13% from 23%.

Management said Q2 FY27 customer decision cycles for new technology investments had become more extended. It identified demand for infrastructure modernisation, productivity, cybersecurity and measurable business outcomes, while citing government spending on smarter connected infrastructure and data-driven public services.

What do Allied Digital’s H1 FY27 results show?

Allied Digital’s H1 FY27 revenue grew 16%, but PAT fell 16%, extending the difference between sales and reported earnings. Revenue reached Rs 525.81 crore in H1 FY27 from Rs 452.72 crore in H1 FY26, while PAT declined to Rs 24.97 crore from Rs 29.87 crore.

EBITDA excluding other income increased 17% to Rs 47.13 crore from Rs 40.15 crore, with the margin unchanged at 9%. Other income fell 51% to Rs 4.72 crore from Rs 9.65 crore, limiting growth in EBITDA including other income to 4%, or Rs 51.84 crore.

Finance costs in H1 FY27 rose 48% to Rs 7.70 crore from Rs 5.21 crore, while tax expense increased to Rs 8.98 crore from Rs 4.86 crore. PAT margin fell to 5% from 6%, and basic earnings per share declined to Rs 4.41 from Rs 4.92.

What balance-sheet movements are relevant to Allied Digital’s finance costs?

Allied Digital’s borrowings were higher on 30 September 2026 than at 31 March 2026, alongside the increase in finance costs. Long-term borrowings rose to Rs 72.49 crore from Rs 51.00 crore, and short-term borrowings increased to Rs 94.69 crore from Rs 65.75 crore.

Total assets increased to Rs 1,121.25 crore on 30 September 2026 from Rs 1,058.19 crore on 31 March 2026. Receivables declined to Rs 264.09 crore from Rs 320.36 crore, while other current assets increased to Rs 525.78 crore from Rs 415.06 crore.

The cash-flow statement reported net cash from operating activities of Rs 16.37 crore as at 30 September 2026, after a Rs 31.17 crore working-capital change. Cash and cash equivalents closed at Rs 185.16 crore, compared with Rs 134.07 crore at the start of the financial year.

Conclusion

Allied Digital delivered Q2 FY27 revenue growth led by Rest of World, Services and Enterprise business, but the increase did not translate into higher reported profit. Revenue rose 14% to Rs 265.32 crore and EBITDA excluding other income rose 14%, while lower other income and higher finance costs contributed to an 18% decline in PAT to Rs 12.59 crore.

The next results will indicate whether Allied Digital can improve reported profitability from its H1 FY27 revenue base of Rs 525.81 crore while managing finance costs of Rs 7.70 crore. Management said it plans to pursue larger, more complex and multi-year engagements, strengthen direct customer relationships and accelerate artificial intelligence adoption across service delivery amid extended technology-investment decision cycles.