Current/ Expected Orderbook/ Pending Orders?

Outstanding order book as of Q2 FY2024 end is Rs. 1,600+ crore. Average execution timeline for the order book is around 3 years. Orders sometimes get confirmation for 5 years but purchase orders (PO) are received yearly, making exact booking figures dynamic and not simply divisible over years. Order book figures exclude incremental "farming" revenues and ad hoc projects such as infrastructure enhancements, cloud, and transformation initiatives. The order book is dynamic, with renewals and new wins occurring quarter-on-quarter. Large spikes in order book may come from smart city projects and la

Any current/future new fundraising through debt or equity?

Allied Digital Services Limited currently maintains a strong, debt-free balance sheet on a net debt basis. The company holds cash and cash equivalents of around Rs. 99 crore, providing liquidity and financial flexibility. There has been no significant capital expenditure recently. The company is well-positioned to invest for growth using internal accruals without the need for external debt or equity funding. No mention or indication of any immediate or planned fundraising through debt or equity during the Q2 FY2024 earnings call. The focus remains on prudent financial management, maintaining s

Any current/future capex/capital investment/strategic investment?

No significant Capex spend during the recent period, reflecting prudent financial management. Company holds around Rs. 99 crore in cash and cash equivalents, providing liquidity for operational and strategic needs. Owns a 7-acre land in Hinjewadi and 2-acre land in Kalewadi (near Capgemini and Fujitsu), planned possibly for a data center in the future, kept as an option for growth. Investment properties (about Rs. 77 crore) include land and buildings such as a 56,000 sq ft building in Mahape (delivery center), 20,000 sq ft office at Seepz, corporate office at Nariman Point, and a new office in

Future growth expectations in sales/revenue/volumes?

Targeting a four-digit crore top line by FY25 or mostly by FY26, indicating ambitious growth plans (Page 16). Strong pipeline with multiple large deals close to closure, despite some delays due to macroeconomic conditions; expects significant growth if these materialize (Page 16). Even if large deals don't materialize soon, steady growth is expected from existing pipeline projects (Page 16). India business showed robust growth, with 53% YoY increase in Q2, supporting overall growth (Page 9). Anticipate resurgence in activity and increased wins and deliveries in H2 FY24 (Page 9). Progressive EB

Future growth expectations in earnings/operating earnings/profits/EPS?

The company targets achieving a four-digit top-line (Rs. 1000+ crore) by FY25 or FY26, indicating strong revenue growth expectations. EBITDA margins are expected to improve as revenue grows, with targets toward mid-teen percentages from current low double digits. Cost optimization opportunities are anticipated as fixed costs grow linearly, helping profitability scale with revenue. The company foresees increasing activity and large deal closures in the second half of FY24, leading to potentially higher top line and earnings. Multiple large contract pipelines are near closure, expected to provid

Allied DigitalQ2 FY24IT - Services

Allied Digital Q2 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹106P/E: 16.8Market Cap: ₹654 CrSector: IT - Services

Management growth scorecard

Revenue

Category 2

Margin

Category 1

Fundraise

N/A

Order

Yes

Capex

Yes

3 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

Targeting a four-digit crore top line by FY25 or mostly by FY26, indicating ambitious growth plans (Page 16).
Strong pipeline with multiple large deals close to closure, despite some delays due to macroeconomic conditions; expects significant growth if these materialize (Page 16).
Even if large deals don't materialize soon, steady growth is expected from existing pipeline projects (Page 16).
India business showed robust growth, with 53% YoY increase in Q2, supporting overall growth (Page 9).
Anticipate resurgence in activity and increased wins and deliveries in H2 FY24 (Page 9).
Progressive EBITDA margin improvement alongside revenue growth, indicating better profitability with scaling (Page 9).
Growth driven by expansion in cloud skills, Cyber Security, Smart City projects, and digital workplace services (Pages 10-11).
Additional growth expected from continued partnerships and enhanced sales channels (Page 8).

Margin guidance

Category 1

The company targets achieving a four-digit top-line (Rs. 1000+ crore) by FY25 or FY26, indicating strong revenue growth expectations.
EBITDA margins are expected to improve as revenue grows, with targets toward mid-teen percentages from current low double digits.
Cost optimization opportunities are anticipated as fixed costs grow linearly, helping profitability scale with revenue.
The company foresees increasing activity and large deal closures in the second half of FY24, leading to potentially higher top line and earnings.
Multiple large contract pipelines are near closure, expected to provide significant growth and revenue spikes.
The management is confident margins and profits will improve through margin-expansion initiatives and by eliminating partner margins in international operations.
Steady revenue growth is expected even if some large deals face delays, supported by farming and incremental projects.
Focus on higher-value, remunerative contracts is aimed at sustaining profitability improvement.

See what Allied Digital management said on margin guidance — free account, 30 seconds.

Fundraise plans

Allied Digital Services Limited currently maintains a strong, debt-free balance sheet on a net debt basis.
The company holds cash and cash equivalents of around Rs. 99 crore, providing liquidity and financial flexibility.
There has been no significant capital expenditure recently.
The company is well-positioned to invest for growth using internal accruals without the need for external debt or equity funding.
No mention or indication of any immediate or planned fundraising through debt or equity during the Q2 FY2024 earnings call.
The focus remains on prudent financial management, maintaining stability, and leveraging a strong pipeline of contracts for organic growth.

Order book

Yes

Outstanding order book as of Q2 FY2024 end is Rs. 1,600+ crore.
Average execution timeline for the order book is around 3 years.
Orders sometimes get confirmation for 5 years but purchase orders (PO) are received yearly, making exact booking figures dynamic and not simply divisible over years.
Order book figures exclude incremental "farming" revenues and ad hoc projects such as infrastructure enhancements, cloud, and transformation initiatives.
The order book is dynamic, with renewals and new wins occurring quarter-on-quarter.
Large spikes in order book may come from smart city projects and large deal wins.
Management cautions against dividing the order book value uniformly across years for revenue projection as it does not reflect actual top-line.
Positive momentum seen with large deal pipelines and ongoing strong execution expected in H2 FY2024.

See what Allied Digital management said on order book — free account, 30 seconds.

Capex plans

Yes

No significant Capex spend during the recent period, reflecting prudent financial management.
Company holds around Rs. 99 crore in cash and cash equivalents, providing liquidity for operational and strategic needs.
Owns a 7-acre land in Hinjewadi and 2-acre land in Kalewadi (near Capgemini and Fujitsu), planned possibly for a data center in the future, kept as an option for growth.
Investment properties (about Rs. 77 crore) include land and buildings such as a 56,000 sq ft building in Mahape (delivery center), 20,000 sq ft office at Seepz, corporate office at Nariman Point, and a new office in Calcutta for expansion.
No current plans disclosed for realizing investment properties soon; lands held with growth and expansion in view.

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