Allied Digital Services Limited (ADSL) AI Stock Analysis

• Market Cap: ₹6.38B
• Dividend Yield: 0.96%
• Average Volume (3M): 103.11K
• Price to Earnings (P/E): 17.4
• Beta (1Y): 1.76
• Revenue Growth: 20.23%
• EPS Growth: -17.78%
• Country: IN
• Employees: 3,000
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 2.18
• Shares Outstanding: 56,514,130
• 10 Day Avg. Volume: 43,847
• 30 Day Avg. Volume: 103,113
• PEG Ratio: -1.08
• Price to Book (P/B): 1.92
• Price to Sales (P/S): 1.43
• P/FCF Ratio: 14.07
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 9.6
• Revenue Forecast (FY): ₹9.58B

• Rating: 67 Neutral
• Price Target: ₹118.00 ▼(-24.04% Downside)
• Action: Reiterated Date: 03/05/26
• Date: Action: Reiterated 03/05/26

Score is supported by strong financial performance (revenue and free-cash-flow growth, low leverage), but is held back by weak technical momentum (below all key DMAs with negative MACD and low RSI/Stoch). Valuation is reasonable and slightly supportive, though not strongly compelling.

Positive Factors

Revenue Growth

Consistent revenue growth of 17.48% indicates expanding client engagements and sustained demand for IT services. Durable top-line expansion supports scaling of recurring managed services and project pipelines, improving revenue visibility and contract leverage over the medium term.

Free Cash Flow & Cash Conversion

Free cash flow growth of 27.89% and an operating-cash-flow to net-income ratio of 2.64 show efficient cash conversion from operations. Durable cash generation strengthens funding for capex, working capital and selective investment while reducing reliance on external financing.

Low Leverage & Strong Equity Base

A low debt-to-equity ratio (0.16) and a 65% equity ratio reflect a conservative capital structure and sizeable equity backing. This balance-sheet strength provides flexibility to absorb shocks, finance technology investments, and support medium-term strategic initiatives without excessive leverage.

Negative Factors

Declining Profitability / Low Net Margin

A net margin of 3.98% and reported declines in EBIT margin point to sustained margin pressure despite revenue growth. Persistently thin margins constrain retained earnings, reduce the capacity to reinvest in service capabilities, and limit resilience to cost inflation or pricing competition.

Low Return on Equity

ROE of 5.34% signals modest returns on shareholder capital relative to peers. Over time this can hinder the company's ability to attract capital and suggests either operational inefficiencies or limited pricing power, reducing long-term shareholder value creation if not improved.

Earnings Per Share Contraction

A 36.6% decline in EPS reflects earnings volatility or one-off impacts that materially reduced per-share profitability. If such EPS contraction persists it weakens retained earnings, pressures dividend sustainability and limits organic funding for growth or strategic investments.

Allied Digital Services Limited Business Overview & Revenue Model

Company Description

Allied Digital Services Limited designs, develops, deploys, and delivers end-to-end IT infrastructure services and digital solutions in India and internationally. The company provides information technology and consultancy services, such as infrastructure, end user IT Support, IT asset life cycle, and enterprise applications. It also offers digital workspace solutions, including service desk, unified endpoint management, and workspace services; and digital infrastructure services, such as cloud management, enterprise infrastructure services, and work from anywhere solutions. In addition, the company provides FinoAllied, a conversational AI Platform for banking and finance industries; ADiTaaS, a comprehensive service management platform; DevOps; enterprise digitalization, including mobile app development, full stack solution and product development, and legacy app modernization and migration services; and SAP solutions, such SAP audit, implementations, and roll-outs, SAP technology, SAP application management, move to Cloud-GetCloud transforming on-premise infrastructure, and SAP support to cloud services. Further, it offers digital security solutions, including AIM360 Degrees cybersecurity; services, such as endpoint security management, threat management, anti fraud and identity management, enterprise infrastructure and cloud security management, and risk management; and integrated solutions, including smart and safe cities, and industrial internet of things. Additionally, the company also offers robotic process automation, internet of things, cloud enablement solutions, and other cognitive technology solutions. Allied Digital Services Limited was incorporated in 1995 and is based in Mumbai, India.

How the Company Makes Money

ADSL generates revenue through a diverse range of services, primarily from managed IT services, which involve ongoing support and maintenance for clients' IT infrastructure. The company also earns income from cloud computing solutions, where clients pay for data storage, processing power, and application hosting on a subscription basis. Cybersecurity services contribute significantly to revenue, as businesses increasingly invest in protecting their digital assets. Additionally, ADSL engages in project-based work, offering enterprise application development and implementation services, which provide one-time payments and ongoing support contracts. Strategic partnerships with major technology providers also bolster ADSL's offerings, allowing for enhanced service delivery and expanded market reach, further contributing to its revenue streams.

Allied Digital Services Limited Financial Statement Overview

Summary

Strong fundamentals overall: revenue grew 17.48% and free cash flow rose 27.89% with efficient cash conversion (operating cash flow to net income 2.64). Balance sheet leverage is low (debt-to-equity 0.16) and equity backing is solid (equity ratio 65%). Main offset is weaker profitability/returns, with net margin down to 3.98% and ROE at 5.34%.

Income Statement

Allied Digital Services Limited has demonstrated strong revenue growth with a notable increase of 17.48% in the latest year. The gross profit margin is consistent at approximately 18.5%, indicating stable profitability from its core operations. However, the net profit margin has decreased to 3.98%, which may be a concern despite the revenue growth. The EBIT margin has seen a decline, suggesting higher operating costs relative to revenue.

Balance Sheet

The company displays a solid financial position with a low debt-to-equity ratio of 0.16, indicating prudent leverage management. The equity ratio is robust at 65%, showcasing a strong asset base supported by equity. However, the return on equity stands at 5.34%, which could be improved to enhance shareholder value.

Cash Flow

There is a positive trend in cash flow, with free cash flow showing a substantial increase of 27.89%. The operating cash flow to net income ratio is 2.64, reflecting efficient cash generation from operations. The company's ability to generate free cash flow is strong, with a free cash flow to net income ratio of 2.56.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	8.47B	8.07B	6.87B	6.60B	4.85B	3.58B
Gross Profit	1.65B	1.49B	1.48B	1.49B	1.32B	938.70M
EBITDA	1.00B	986.90M	838.20M	939.70M	955.10M	478.30M
Net Income	361.40M	321.10M	458.50M	69.20M	610.30M	192.50M
Balance Sheet
Total Assets	0.00	9.25B	7.78B	6.95B	6.93B	6.41B
Cash, Cash Equivalents and Short-Term Investments	2.16B	2.16B	1.38B	1.35B	637.00M	581.70M
Total Debt	0.00	966.20M	748.00M	549.70M	461.80M	550.00M
Total Liabilities	-6.46B	2.79B	1.59B	1.24B	1.37B	1.56B
Stockholders Equity	6.46B	6.02B	5.79B	5.36B	5.31B	4.71B
Cash Flow
Free Cash Flow	0.00	822.50M	643.20M	335.10M	81.10M	326.00M
Operating Cash Flow	0.00	847.30M	676.10M	470.20M	146.30M	494.10M
Investing Cash Flow	0.00	-131.50M	-29.30M	-116.50M	-59.60M	-121.00M
Financing Cash Flow	0.00	-101.60M	-102.30M	-70.40M	-76.90M	-30.20M

Allied Digital Services Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 155.35
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:ADSL, the sentiment is Negative. The current price of 155.35 is above the 20-day moving average (MA) of 122.90, above the 50-day MA of 132.37, and below the 200-day MA of 165.38, indicating a bearish trend. The MACD of -4.95 indicates Positive momentum. The RSI at 31.73 is Neutral, neither overbought nor oversold. The STOCH value of 27.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:ADSL.

Allied Digital Services Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INFOBEAN	77 Outperform	₹17.26B	25.81	―	0.13%	14.57%	80.44%
INNOVANA	68 Neutral	₹8.11B	22.14	―	―	25.98%	18.29%
ADSL	67 Neutral	₹6.38B	17.41	―	0.96%	20.23%	-17.78%
SILVERTUC	66 Neutral	₹16.65B	31.56	―	0.06%	16.93%	36.77%
ONWARDTEC	62 Neutral	₹6.07B	15.89	―	1.84%	10.49%	69.49%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SUBEXLTD	46 Neutral	₹4.79B	56.55	―	―	-9.53%	96.99%

Allied Digital Services Limited Corporate Events

Allied Digital Clears Q3 FY26 Results, Explores Restructuring of Overseas Subsidiaries

Allied Digital Services Limited’s board has approved the unaudited standalone and consolidated financial results for the quarter and nine months ended December 31, 2025, together with the accompanying limited review reports, and has issued a press release detailing the performance. In the same meeting, the board authorized management to explore potential restructuring options for its wholly owned overseas subsidiary Allied Digital Inc., which may include converting an intercompany loan into equity and considering a merger with another overseas subsidiary, Allied Digital Services LLC, signaling a possible rationalisation of its international corporate structure that could affect capital allocation and operational synergies across its global operations.

Allied Digital Clears Q3 FY26 Results, Explores Overseas Subsidiary Restructuring

Allied Digital Services Limited’s board has approved the unaudited standalone and consolidated financial results for the quarter and nine months ended December 31, 2025, alongside the statutory auditors’ limited review reports, reinforcing its ongoing financial reporting and compliance with Indian listing regulations. In the same meeting, the board authorised management to explore restructuring options for its wholly owned overseas subsidiary Allied Digital Inc., potentially including a debt-to-equity swap and a merger with fellow subsidiary Allied Digital Services LLC, a move that could streamline the company’s international operations, optimise its capital structure and have implications for how its global business is organised and reported in future periods.

Exchange Seeks Clarification From Allied Digital on Surge in Trading Volumes

Trading in shares of Allied Digital Services Limited has seen a significant spike in volume on the stock exchange, drawing regulatory attention to the unusual activity. In response, the exchange has formally sought updated, relevant information from the company to ensure transparent disclosure and protect investor interests, with the market now awaiting the company’s clarification on the reasons behind the heightened trading volumes.

Allied Digital Shuts Trading Window Ahead of Q3 and Nine-Month Results

Allied Digital Services Limited has announced the closure of its trading window for designated persons and their immediate relatives from January 1, 2026 until 48 hours after the declaration of its unaudited standalone and consolidated financial results for the quarter and nine months ended December 31, 2025. The company said the move, taken under its internal code of conduct aligned with SEBI’s Prohibition of Insider Trading Regulations, is a compliance measure intended to prevent insider trading ahead of the forthcoming financial disclosures, with the board meeting date for approving these results to be communicated separately.