Broker’s call: Allied Digital (Add)

Allied Digital Services Office, Mumbai

Target: ₹200

CMP: ₹192.85

Allied Digital Services’ (ADSL) revenue for Q4-FY25 came at ₹204.40 crore, up 15.6 per cent y-o-y but down 7.4 per cent q-o-q (vs CEBPL est. at ₹227.70 crore). EBIT came at ₹-24.60 crore, down 221 per cent y-o-y and 221.8 per cent q-o-q (vs CEBPL est. at ₹25.30 crore). EBIT margin was down 2354 bps y-o-y and 2120 bps q-o-q to -12 per cent (vs CEBPL est. at 11.1 per cent). PAT stood at ₹-7.6 crore, down 154 per cent y-o-y and 143.1 per cent q-o-q (vs CEBPL est. at ₹17.70 crore).

ADSL posted record-high revenue in FY25, driven by strong domestic performance and a growing international pipeline. However, profitability faced short-term pressure due to an auditor transition and related adjustments. The next few quarters will be key in validating sustained growth and successful execution of strategic plans, especially in converting the robust order pipeline into revenue and margin improvement.

Adopting an overall cautious view post the company’s Q4FY25 performance, we trim our topline estimates for FY26 and FY27 by 5 per cent and 3.8 per cent, respectively. Thus, we expect Revenue/EBITDA/PAT to grow at a CAGR of 16.6/101.8/50 per cent over FY25–FY27E and revise our rating to Add with a target price of ₹200, implying a PE multiple of 15x (earlier 16x) on FY27E EPS of ₹13.4.

Published on June 10, 2025