Allied Digital continued its growth trajectory in Q2 FY 2011 though its equity dilution spoilt the show for the shareholders.
Allied Digital‘s income from operations rose 26.94% to Rs 139.86 crores in the quarter ended September 2010 as against Rs 110.18 crores during the previous quarter ended September 2009. However, this was lower that the income of Rs. 204 crores reported in the June 2010 Quarter. Allied Digital‘s Net profit rose 20.36% to Rs 29.08 crores in the quarter ended September 2010 as against Rs 24.16 crores during the previous quarter ended September 2009. In the June 2010 Quarter, the Net Profit was Rs. 33.11 crores.
However, despite the Q2 FY 2011 results of Allied Digital being superior to Q2 FY 2010 results, the EPS of Allied Digital for Q2 FY 2011 was lower at Rs. 6.25 as compared to Rs. 6.66 YOY. The H1 2011 EPS of Allied Digital was marginally higher at Rs. 13.17 as compared to Rs. 12.97 in H1 2010. The result for this is the increase in paid up capital of Allied Digital from Rs. 18.16 crores to Rs. 23.25 crores resulting in severe dilution of EPS. Allied Digital raised Rs 231.42 crores equivalent to USD 50 Million through Qualified Institutional Placements (“QIP”) by allotting 49,00,000 Equity Shares of Rs 10/- at a premium of Rs 462.29 per shares (pre split) to 33 allotees.
| Particulars | Quarter Ended | ||
| Sep. 2010 | Sep. 2009 | % Var. | |
| Sales | 139.86 | 110.18 | 27 |
| OPM % | 28.12 | 28.37 | -1 |
| PBDT | 39.30 | 30.43 | 29 |
| PBT | 36.32 | 29.01 | 25 |
| NP | 29.08 | 24.16 | 20 |
The effect of the EPS dilution is that the share price of Allied Digital has slumped from the range of Rs. 240-250 to Rs. 215 -220.
However, all may not be lost for patient investors because Allied Digital is very much on the growth path. In Q2 FY 2011, Allied Digital has acquired strategic clients against global competition in the United States such as a large hotel chain, a transportation rental company and a global law firm. Allied Digital manages the complete infrastructure outsourcing needs in the US of these clients. It also indicates that Allied Digital has increased visibility in the US market as well as customers
recognition of its service capabilities.
Allied Digital ought to be able to translate the momentum built through client acquisitions into growth in the coming quarters (see also Allied Digital Services: IMS To Drive Growth).
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