Allied Digital Services Limited (ADSL) AI Stock Analysis

• Market Cap: ₹7.55B
• Dividend Yield: 0.96%
• Average Volume (3M): 103.11K
• Price to Earnings (P/E): 21.8
• Beta (1Y): 1.72
• 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): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: ₹144.00 ▼(-7.31% Downside)

The overall stock score is driven primarily by strong financial performance, with significant revenue growth and cash flow management. However, technical analysis indicates bearish momentum, which weighs down the score. Valuation is moderate, with a fair P/E ratio but low dividend yield.

Positive Factors

Revenue Growth

Sustained top-line growth (17.48% latest year, 20.23% in Fundamentals) reflects expanding client adoption of IT services and recurring managed services. Durable revenue expansion improves scale economics, supports long-term investment in platforms and sales, and lowers per-unit delivery costs over months.

Free Cash Flow Generation

A 27.89% increase in free cash flow and an operating cash flow to net income ratio of 2.64 indicate strong cash conversion. Reliable cash generation supports capex, working capital needs, and organic growth funding without material new leverage, reinforcing financial flexibility over the medium term.

Low Leverage and Strong Equity Base

Low debt-to-equity (0.16) and a 65% equity ratio provide a robust capitalization profile. This structural balance-sheet strength enables the company to absorb shocks, pursue strategic investments or acquisitions, and finance larger managed-service contracts without compromising liquidity or credit flexibility.

Negative Factors

Thin Net Profit Margins

A sub-4% net margin and falling EBIT margins signal persistent cost or pricing pressure in services delivery. Durable margin compression limits the conversion of revenue growth into shareholder returns, constrains reinvestment capacity, and requires structural improvements in pricing, automation, or higher-margin offerings.

Low Return on Equity

ROE of ~5.34% indicates returns are modest relative to the capital base. Over the medium term this signals capital inefficiency: revenue growth has not yet translated into commensurate profitability for shareholders, requiring margin expansion or better capital allocation to boost long-term returns.

Declining EPS

Negative EPS growth (~-17.8%) points to earnings pressure despite revenue gains. Persistently falling EPS can erode retained earnings and internal funding for strategic initiatives, and may reflect structural cost issues or one-off items that, if unresolved, weaken long-term earnings power and investment capacity.

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

Allied Digital Services Limited shows strong revenue growth and effective cash flow management. The balance sheet is stable with low leverage and a strong equity base. However, there is room to improve net profit margins and return on equity.

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	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 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: Negative
• 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 127.49, above the 50-day MA of 144.95, and below the 200-day MA of 170.98, indicating a neutral trend. The MACD of -4.89 indicates Negative momentum. The RSI at 43.41 is Neutral, neither overbought nor oversold. The STOCH value of 58.33 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	₹21.02B	27.82	―	0.13%	14.57%	80.44%
INNOVANA	68 Neutral	₹7.57B	14.86	―	―	25.98%	18.29%
SILVERTUC	66 Neutral	₹17.85B	56.27	―	0.06%	16.93%	36.77%
ADSL	66 Neutral	₹7.55B	21.81	―	0.96%	20.23%	-17.78%
ONWARDTEC	62 Neutral	₹7.28B	16.04	―	1.84%	10.49%	69.49%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SUBEXLTD	46 Neutral	₹5.59B	-103.64	―	―	-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.

Allied Digital Releases Q2 FY26 Earnings Presentation

Allied Digital Services Limited has released its earnings presentation for the quarter and half year ended September 30, 2025. The presentation, which includes consolidated and standalone unaudited financial results, is available on the company’s website. This release is part of the company’s compliance with SEBI regulations and aims to inform stakeholders about its financial performance.

Allied Digital Expands Equity Through Employee Stock Options

Allied Digital Services Limited has announced the allotment of 86,325 equity shares under its Employee Stock Option Plan 2020, as approved by the Nomination and Remuneration Committee. This move increases the company’s paid-up equity share capital, reflecting its commitment to rewarding and retaining talent, which could positively impact its operational capabilities and market position.