Disclaimer – Analysis is NOT a BUY/SELL/HOLD Recommendation. It can be used for educational purposes. There can be lot of things which have been missed in analysis either due to lack of information or oversight etc.. Do your own diligence & contact your expert financial adviser before making any investment decision.

Allied Digital Services (ADSL)

Key Investment thesis –> Smart city contracts and infrastructure solutions

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Business

ADSL global IT Consulting and Services provider and Systems integrator offering infrastructure solutions and services to clients across 70 countries. It designs, develops, and deploys digital solutions and delivers end-to-end IT infrastructure services including, End user IT Support, IT asset life cycle, enterprise applications and integrated solutions

CMMi Level 3, SOC2 certified, ISO 9001, 27001 & 20000 – Highest standard for IT Service Management Tools

Customers, Global Presence and Revenue Mix

Increasing clients. Deals from big clients

Fundamental Ratios, Cash, EBITDA, PAT

Stable Ebitda, Pat margins. Debt to Equity under control. ROCE is on uptrend in medium term

Working capital days and cash conversion cycle have been improving

ADSL when i first published the report

ADSL NOW

Triggers

Securing new projects of Smart city

Securing of prestigious contracts, exemplified by projects like the Ayodhya Smart City and Taloja Smart City.

In February 2024, ADSL received a Letter of Intent for the Taloja Smart Industrial City Solution contract in Navi Mumbai. This groundbreaking initiative will unfold over an 18- month implementation phase, followed by a 60-month Operations and Maintenance period. The project’s scope involves establishing an Integrated Command & Control Centre (ICCC) at both the Corporation’s Head office and the Industrial Township. The ICCC software will seamlessly integrate with a Cloud-based Data Center/Disaster Recovery system. Furthermore, the project encompasses the deployment of a cutting edge CCTV-based Surveillance System to bolster security and monitoring capabilities.
In January 2024, was selected as a Master System Integrator (MSI) for the Integration of CCTV Surveillance with Existing ITMS Control Room for the Ayodhya Smart City Project. This project entails the establishment of a multi-location CCTV surveillance system. The capital expenditure (CAPEX) and implementation phase is anticipated to last three months, followed by a five-year operational and maintenance (O&M) phase.

Completed 12 smart city projects with 2 new wins.

Expecting an opportunity size of Rs. 50,000 crore in the smart city projects in the next 5 years.

Seeing traction in the smart city space with upcoming tenders.

Future Outlook,Targeting Acquisitions and exploring fields like

Eyeing opportunities in Cybersecurity and Cloud arena for potential acquisitions.

Focused on improving margins in O&M contracts and government projects.

Expecting better traction in IT business with growing interest in European and APAC markets.

Revenue Plan

Plans to reach INR1,000 crores in revenue over the next 2-3 years with a focus on improving margins

Order book outstanding at Rs. 1,600 crore, with execution period of around three years (Nov23)

Digital Desk (formerly ADiTaaS):

• Rebranded to ‘Digital Desk’ with enhanced features in AI, conversational AI, and generative AI.
• Seeing traction with 100+ customers globally.

Leadership Augmentation

• Allied Digital has added Mr. Ramanan Ramanathan as “Global Head Strategy – Growth, Innovation, Partnerships” to its Senior Leadership Team. Mr. Ramanathan, a seasoned strategist and growth consultant, has advised global entities and served as the Mission Director of the Atal Innovation Mission, where he established over 10,000 Tinkering Labs and 75 incubators.
• In his new role, he will assist the company in its expansion by identifying new market opportunities, fostering innovation, and establishing strategic partnerships. Additionally, he will identify and evaluate potential partners to enhance business capabilities and achieve strategic objectives.
• With a distinguished career at TCS and CMC Limited, he continues to shape innovation, entrepreneurship, and sustainable development across various sectors.

8th October 24

Allied Digital awarded Pune Safe City (FY 2024) Project for Total Contract Value of Rs. 430+ Crore

Key project highlights include:
 Comprehensive surveillance: Track 1 of the project shall cover O&M of the existing cameras for a period of 6 years and Track 2 shall cover Implementation of new infrastructure over 12 months followed by 5 years of O&M.

 Advanced technology: The project will feature advanced Artificial Intelligence-enabled video analytics, an Automatic Number Plate Recognition (ANPR) system, Vehicle Over speed Detection System (VDS) a Facial Recognition System (FRS), Drones, and Mobile surveillance vans to ensure robust security and monitoring.

 Upgraded infrastructure: The Command-and-Control Center at the Commissioner of Police office and supporting Data Center will be upgraded with implementation of additional capacity and installation of advanced software leading to improved efficiency and 24×7 real time monitoring. Additional viewing facilities will be established at various police stations and key government offices

Risks

Concentration of revenue from top clients

Working capital intensive nature of operations

Highly competitive nature of IT industry

Technical chart

on 17-Oct 24

on 29-Jun-24

Disclaimer – Analysis is NOT a BUY/SELL/HOLD Recommendation. It can be used for educational purposes. There can be lot of things which have been missed in analysis either due to lack of information or oversight etc.. Do your own diligence & contact your expert financial adviser before making any investment decision.

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