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    Alldigi Tech Limited

    ALLDIGI
    Services·8 May 2026
    Management Summary

    Alldigi Tech reported strong financial performance for FY26, driven by robust growth in its Tech & Digital business and significant margin expansion. The company is strategically shifting its BPM segment towards higher-margin international business, leading to some headcount rationalization. Management highlighted ongoing AI integration across operations and new platform releases to enhance efficiency and customer value, while also planning investments in infrastructure.

    Highlights

    5

    • Full year FY26 revenue from operations stood at ₹598.7 crores, up 9.6% year-on-year.

    • Full year FY26 EBITDA was at ₹162 crores, up 25% year-on-year, with margins improving to 27.1% from 23.7% in FY25.

    • Q4 FY26 PAT increased significantly by 49.7% year-on-year to ₹28.9 crores.

    • Tech & Digital business reported strong growth with Q4 revenue up 22.3% YoY and full year revenue up 16.5% YoY to ₹156.2 crores.

    • Operating cash flow for FY26 was ₹144.1 crores, with a healthy conversion rate of 88.9%.

    Concerns

    3

    • BPM segment revenue for Q4 FY26 was broadly flat year-on-year at ₹110.4 crores.

    • Headcount decline in BPO business due to strategic shift away from low-margin business, which management expects to continue in FY27.

    • Large client onboarding in BPM was put on hold due to global macroeconomic conditions and war, impacting step growth.

    Key financials

    Metrics

    8

    Periods

    2

    Q4 FY26

    3
    • Revenue
      ₹154.7 Cr
      YoY+5.9%QoQ+1.3%
    • EBITDA
      ₹43.7 Cr
      YoY+24.2%
    • PAT
      ₹28.9 Cr
      YoY+49.7%QoQ+38.6%

    FY26

    5
    • Revenue
      ₹598.7 Cr
      YoY+9.6%
    • EBITDA
      ₹162 Cr
      YoY+25%
    • EBITDA Margin
      27.1%
    • PAT
      ₹82.2 Cr
    • Operating Cash Flow
      ₹144.1 Cr

    Segment breakdown

    • BPM₹442.4 Cr73.9%
    • Tech & Digital₹156.2 Cr26.1%
    Donut· Share of Revenue (FY26)

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Liquidity

    Cash ₹147.7 crores

    Guidance & targets

    8
    CategoryTargetPriority
    Profitability
    EBITDA Margin Growth
    1% to 1.5%
    		Medium
    Profitability
    EBITDA Margin Improvement
    1% to 2%
    		Medium
    Profitability
    BPM Segment Margin
    13% to 14%
    		High
    Revenue
    Revenue Growth
    mid-teen
    		Medium
    Diversity
    Diversity and Inclusion Percentage
    50%
    		High
    Technology
    HRMS Version 2 Release
    Released
    		High
    Efficiency
    Efficiency Gains from SP4 platform
    ₹3 crores
    		High
    Capex
    Depreciation Increase
    sub-10%
    		High

    What to watch in Q1 FY27

    5

    BPM Low-Margin Business Rationalization

    FY27
    Current~10% of portfolio
    TargetFurther reduction

    Why it matters

    Continued rationalization of low-margin business is key to improving overall segment profitability and achieving strategic goals.

    We should anticipate this probably not on a quarter time line, but for the FY '27, we would continue to exercise this intent of moving away from low-margin business. Even as of today, from our portfolio, we still carry about 10% of our business into this segment. So we'll continue to move away from this business based on the macro conditions of the business.

    Risks & concerns

    2
    RiskSeverity

    Global Macroeconomic Conditions and Geopolitical Events

    Global macroeconomic conditions and war caused customers to put large client onboarding decisions on hold in the BPM segment. — Management acknowledged

    medium

    AI Disruption and Downsizing

    AI is seen as both a challenge and an opportunity; management is evaluating the threat of AI leading to downsizing and actively implementing AI solutions. — Management acknowledged

    medium

    Q&A highlights

    8

    “So, the revenue, if you have to look at it, not exactly directly proportional to the growth of the number of employees because there are revenue streams on the payroll side, which comes from our onetime change requests as well and also the year-end. So, there are configuration changes, there are tax proof vouching. There's a new wage code implementation. So, there are revenue streams that come from those onetime activities as well. And also, our increase in international business also gives us the benefit from the currency fluctuation. So it's a combination of all these factors.”

    Clarifies that HRO revenue growth is driven by multiple factors beyond just employee count, including one-time activities and international business mix.

    asked by Harsh Kundnani

    3 min read6 chapters

    Detailed Narrative

    01

    Strong Financial Performance in FY26

    Alldigi Tech delivered robust financial results for the full year FY26, with revenue from operations growing 9.6% year-on-year to ₹598.7 crores. EBITDA saw a significant increase of 25% year-on-year, reaching ₹162 crores, which led to an improved EBITDA margin of 27.1% compared to 23.7% in FY25. For Q4 FY26, revenue stood at ₹154.7 crores (up 5.9% YoY), and PAT surged by 49.7% YoY to ₹28.9 crores. Cash collections remained strong at ₹626.1 crores for the full year, with an operating cash flow of ₹144.1 crores.

    02

    Strategic Shift in BPM Segment

    The company is undergoing a strategic rationalization in its BPM segment, moving away from low-margin business to focus on higher-margin international clients. This shift resulted in a broadly flat Q4 FY26 BPM revenue of ₹110.4 crores and a headcount decline, which management expects to continue into FY27. International business now contributes 78% of the total CXM revenue, up from 73% last year, indicating the success of this strategic pivot. The segment margin for BPM for FY26 was ₹62.3 crores, growing 16.8% YoY.

    03

    Robust Growth in Tech & Digital (T&D) Business

    The Tech & Digital business demonstrated strong performance, with full year FY26 revenue growing 16.5% year-on-year to ₹156.2 crores. Q4 FY26 revenue for this segment increased by 22.3% YoY and 14.5% QoQ to ₹44.3 crores. The segment margin for T&D for FY26 was ₹66.6 crores, reflecting a robust growth of 28.9% YoY, with Q4 margins remaining strong at 44%. The company added ₹40.1 crores of new ACV in this segment and processed 191.5 lakh employee records for the full year.

    04

    Technology & AI Initiatives

    Alldigi Tech is actively infusing technology and AI across its operations to drive efficiency and enhance offerings. A new AI-enabled HRMS Version 2 platform is slated for release this year, alongside an AI-based payroll analytical module. These initiatives are expected to yield an efficiency of ₹3 crores per annum in the Tech & Digital business. The company is also integrating AI into existing BPM operations to improve accuracy, reduce turnaround times, and provide more value-added services to customers.

    05

    Capital Allocation for Infrastructure and Efficiency

    The company is investing in upgrading its infrastructure, including a new office in Chennai, which will involve an investment of approximately ₹20 crores. This is part of the typical annual admin and facility capex, which ranges from ₹20-25 crores. Management anticipates that the depreciation for the next year will increase by less than 10-15% (or even sub-10%) from the current ₹58.6 crores, primarily due to these new investments. The focus is on enhancing operational efficiency and providing a better working environment.

    06

    Outlook and Growth Drivers

    For FY27, Alldigi Tech aims for mid-teen revenue growth and a 1% to 2% improvement in EBITDA margins. The company expects BPM segment margins to remain in the 13-14% range. Growth will be driven by deepening client relationships, expanding global reach, and leveraging technology and AI. Management is confident in sustaining growth momentum through platform scale, expanded sales channels, and execution discipline, despite some large client onboarding being delayed in the BPM segment due to macroeconomic conditions.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.