Alldigi Tech Ltd Q3 FY26 Earnings Analysis

- Expect mid-to-high teens growth in revenue annually for FY '26 and FY '27. - Aim to improve EBITDA margins by 100-150 basis points going forward. - Anticipate doubling the employee payroll processing volume over the next 4-5 years, driven by high teens CAGR growth. - Continued focus on growing international revenue share, especially in BPM and HRO segments. - Build a mix model of direct sales and partnerships to expand market reach domestically and internationally. - Investments in upgraded facilities and technology platforms (Smart Pay 4, Buzzily) to drive operational efficiency and attract more clients. - Pipeline and sales channels are strengthened to support consistent quarter-on-quarter growth. - Aim to balance growth with profitability and operational efficiency, controlling indirect costs.

- **Revenue Growth:** Expected to continue growing in the mid-to high teens annually. - **EBITDA Margin:** Anticipated improvement of 100 to 150 basis points year-on-year through a mix of higher international revenue share, operational efficiencies, and tighter cost control. - **Operating Earnings:** Growth in EBITDA expected to outpace depreciation in the medium term, leading to meaningful Profit Before Tax (PBT) growth in the next few years. - **EPS/Net Profits:** PAT showed strong growth in Q2 (45.5% YoY) but was down 26.3% YoY for H1 FY '26 due to divestments; expected to improve as investments and margin expansion take effect. - **Long-term Outlook:** Investments in infrastructure and sales teams expected to generate returns over 3-4 years, fueling a virtuous cycle of higher sales and profits. - **Overall:** Focus on sustaining high-teens growth and margin improvements with controlled investments and cost discipline.

- Alldigi Tech has made significant recent capital investments, including consolidating Bangalore facilities at SS Plaza and infrastructure upgrades for a large client. - Future planned capex includes similar infrastructure upgrades for Chennai and Noida facilities over the next few quarters. - Capex decisions are based on business modeling to determine optimal investment in own office facilities versus service provider-managed ones. - Depreciation has increased due to these investments and routine capex like laptop/desktop replacements; it is expected to remain around the current level unless new capex arises. - The company continues to explore acquisitions that fit strategic criteria, such as enhancing onshore/nearshore presence or expanding verticals (BFSI, healthcare). - All investments are made with a disciplined approach, assessing ROI carefully to support long-term growth and operational efficiency.

- There is no mention of any current or planned fundraising through debt or equity in the provided transcript. - The company emphasizes a robust cash position and disciplined approach to investments. - They mention potential acquisitions but highlight careful evaluation to ensure value and ROI, not necessarily implying immediate fundraising. - No explicit discussion about raising new capital via debt or equity is indicated in the available content.

- For H1 FY'26, Alldigi Tech signed contracts with a 60:40 mix between international and domestic markets in the HR Outsourcing (HRO) segment. - The company recorded strong sales Annual Contract Value (ACV) of INR 18 crores in H1 FY'26 for the Tech & Digital business, double that of the corresponding period last year. - There was an addition of INR 22 crores of new ACV in the BPM segment in H1, largely from existing healthcare clients and one new logo. - No precise outstanding order book value is mentioned, but the mix indicates healthy pipeline with emphasis on international growth.