All E Technologies, making businesses ready for AI

[Piyush_Vats]

The revenue lag can be explained. Microsoft is deeply entrenched in the enterprise ecosystem and this is where growth is coming from. In Alletec’s case, most of their customers are smaller businesses who simply can’t spend much in the current economic circumstances. After all IT is still a descritionary expense.

Management has said again and again that our projects are IP driven and there’s not a direct relation between revenue growth and headcount growth. This is true because over the last 3 years, headcount growth is minimal as compared to revenue growth. Things haven’t went according to plan in these last 2-3 quarters.

There is an obvious way to grow the topline here which is hire a little more sales and functional domain people. Might decrease margins in the short term but clearly the addressable market is big enough.

Disc. Not invested, tracking

[newrb]

I don’t have deep visibility into AllETec operations, below are my views based on experience working in IT and reading their concalls.

‘Revenue lag’ is probably wrong way to characterize it. Listening to their concalls, I get a sense that most of their revenue comes from implementation of microsoft products which have been existing for a while - CRM, data solutions and azure cloud. Their clients not spending as much is probably the reason; on top of it, I don’t get a sense AllEtec has invested significantly in sales.

I will take their claim that revenue growth is decoupled from headcount with a pinch of salt. Over the last 3-4 years, the share of US services revenue has significantly increased along with rupee depreciation and India revenue share has decreased. I suspect that is the main reason for decoupling and as US revenue share growth flattened, they are struggling to increase topline.

What they do may be different for companies of their size (no staff aug etc.), but there is nothing unique when you include larger players. They are riding on microsoft product suite popularity in the market. Given they are microsoft only shop, Microsoft would also try and push smaller clients to them (I have seen Salesforce do this during my professional career).

What worries me is that Ajay Miyan is not able to articulate the reasons for flattening of growth and actions they are taking to get the growth back.

The market reaction has to be looked in the context of multiple things happening - SME de-rating, lack of liquidity in the counter, concerns about AI impacting IT services, lack of clear communication from the management on how they will get the growth back. Since Ajay Miyan refuses to share order book, market has no way to figuring out if growth trajectory is likely to reverse any time soon. P/E de-rating has been brutal.

I hold a small position and will continue to monitor. Management’s intentions seem good - quarterly results and concalls even as SME, no further dilution after IPO, focus on cash generation and retention - all these are good. Net of cash, it is at P/E of ~5, P/S of ~1.2. At this valuation, any action from management to push growth will get rewarded by the markets, though it may remain a value trap if the management continues to lack aggression.

[Pratik_Shetty]

I agree with your views. ‘Revenue lag’ is a narrative that the management promoted when pushed for the reason for decoupling of All E tech’s revenue from Microsoft’s. Microsoft Dynamics 365’s growth has been 20%+ since many quarters, so even if there is a lag it should have shown up on All E tech’s revenue. Ajay Miyan has to do a better job of explaining the reason for flattening of growth.

While many (including me) were happy that the management is conservative and taking its time to make the right acquisition at right price, 3 years is enough time for it. There’s something wrong in the way they are approaching inorganic growth, there doesn’t seem to be any urgency.

[Pratik_Shetty]

Management responded to my questions over mail. If anyone has follow ups to these, please let me know

---

1. Revenue mix from IP-led products
Could you please share what percentage of revenue in Q3 and year-to-date was generated from proprietary IP / products versus pure services or implementation work? What kind of traction are we seeing on the product side

Alletec>> The overall revenue from Products (IP + Microsoft) has consistently ranged between 42 to 45%. The balance is Services. Services include Implementations, Consulting, Managed Services and Support.

2. Customer additions vs flat revenue trend
The company has mentioned adding ~7–10 new customers every quarter, yet the topline has remained relatively flat in recent quarters.
Could you help explain this dynamic? Specifically:

• Are we seeing revenue attrition or lower spend from existing customers that offsets new client additions?

• Is the initial implementation revenue from new deals relatively small, with a larger portion of revenue coming later through recurring support or managed services?

• Are the new customer engagements currently smaller in size compared to historical averages?

Understanding this would help investors reconcile healthy client additions with the muted revenue growth.

Alletec>> Alletec’s cloud revenue has experienced a healthy growth. The numbers you see are overall numbers (Cloud + On-prem). One of the main reasons for the impact has been – the business of a large customer from Africa going down dramatically, which inturn resulted in expansion projects being stalled. This customer had given us a revenue of about $2 mil in the past 2 years. This revenue evaporated in the current year. The overall business momentum however continued and the new business has been able to cover some of the gap.

The average revenue per deal (new implementation) is not declining. What has been happening however is – some sizable projects have taken way too long to get decided, or have continued to drift. The overall macro-economic situation caused by tariffs and wars has certainly had its impact.

3. Revenue recognition and project cycle
In the Q3 concall there was discussion about revenue recognition occurring with a lag in comparison to when Microsoft would book its revenue.

Alletec>> Not sure if the point is correctly understood, but specific points being responded below.

Could you please explain the typical lifecycle of a project, including:

• When do we consider a new customer to be onboarded

Alletec>> The customer is considered onboarded when he signs up a project.

• How long would it take for the implementation to begin post onboarding. During this period would there be any milestone based payments

Alletec>> Typical projects get started within 2 to 3 weeks of purchase order being received. During this time there might be a product purchase done.

• How does the revenue recognition for the partner (All E Technologies) differ from when Microsoft recognizes license revenue on the same customer engagement?

Alletec>> Microsoft’s revenue is only product. Alletec’s revenue is Product+ Services. For customers under Enterprise Agreement with Microsoft, Alletec does not get topline on the product. Microsoft is however in the process of stopping any new EA.

A brief overview of the typical project timeline and revenue flow would help investors better understand the business model.

Alletec>> Most new implementation projects have a timeline of 6 to 9 months. After that the customers moves to a Support mode. Needs for new solutions keep coming with time (ERP, CRM, BI, Portals, Data Engineering, AI, Cloud Infra, Managed Services, …). The new implementation projects usually have milestone based payments. Products may be billed monthly, Quarterly, or Yearly – depending on the pricing model the customer opts for. Support Services, Managed Services and Infra is typically billed on monthly basis.

[riddhitejani]

One regulatory angle worth adding to this thread that has not been discussed.

All e tech implements ERP and CRM systems for enterprise clients which means they handle client data as a Data Processor under the Digital Personal Data Protection Act 2023 and DPDP Rules 2025, notified November 13, 2025.

This matters specifically for All e tech for three reasons.

First, as an ERP and CRM implementer, All e tech sits inside client data environments. The DPDP Rules require Data Fiduciaries to have contractual relationships with their Data Processors and ensure their compliance. Every enterprise client of All e tech will now need to renegotiate their implementation and maintenance contracts to include mandatory DPDP obligations. This is contractual work All e tech will need to do across 275+ active clients.

Second, this is actually a revenue opportunity hiding inside a compliance obligation. Full compliance is expected by May 13, 2027. Every enterprise client running Microsoft Dynamics on cloud infrastructure will need their data architecture reviewed, consent frameworks built, and breach notification systems implemented. All e tech is uniquely positioned to deliver exactly this work — they already have the client relationship, the Microsoft stack expertise, and the access to client data environments.

Third, the international dimension. The DPDP Act also has extra-territorial applicability, applying to foreign entities who offer goods and services to Data Principals located within India. All e tech’s international clients who have Indian operations will face DPDP obligations and All e tech is the natural advisor.

Has management discussed the DPDP opportunity in any recent concall? The Q3FY26 transcript covers AI strategy and Microsoft partnership but I did not see DPDP mentioned. Given the May 2027 compliance deadline and 275+ enterprise clients, this seems like a material near-term revenue driver worth asking about in the next concall.

[BuyRightSitTight]

I don’t really think DPDP would be applicable here since All E Tech would only be implementing the ERP/CRM systems, not handing client data. Once implemented, system administrators on the client side would be administering the system. All E Tech are not data processors as far as I understand. The data processor concept applies when the client outsources some/all of their business processes to a 3P.

[BuyRightSitTight]

Promoter buying since Feb 2026:

Inspires a bit of confidence! Btw, I am not sure they disclosed it to NSE. I neither saw the announcement on screener nor on the NSE website (this was on Trendlyne). Aren’t they required to?

PS: 47% bounce in about 3 trading sessions!

[Azhar_12]

i think this is great time to reduce exposure in this stock and capitalize the momentum

[Pratik_Shetty]

i won’t give any weight to this buying. All of the purchases together in the last quarter don’t even add up to Rs 10 Lakhs worth of stocks.

[Piyush_Vats]

There has been a lot of M&A activity in the IT space in past 2 years. This made sense as valuations were distressed. ALLETEC has not been able to acquire any company in US. If I have to take a wild guess this was due to the management expectations on valuation. To me if you’re not gonna acquire another company in a bear market, better not go for acquisition at all.

Disc. Not invested, tracking.

[AkshayBharde]

What do we think about the yesterday’s results? Why did the EBIT margins got so much hit? Employee costs have risen to March 23 levels of 37% of the total costs. Does it mean that the management is getting ready for growth now? Material costs are in line with the trend. Also, if the stock price is so low & the management sees value in the future growth, why did they distribute cash, wouldn’t buyback be a better option?

All these questions & the ever pressing acquisition question need to be asked in the next concall.

Disc: Invested.

[newrb]

We also need to understand how they are dealing with FX risk/gain. USD has appreciated significantly in the last one year. Are the results calculated at constant currency or on actuals? If based on actual, it shows de-growth of international revenue.

Management has set lower expectations in their press release - saying they are setting up for growth in the next 12-18 months. I read it as not much growth coming in the next 12 months.

They need to invest in sales and business development. Ajay Mian lacks the aggression needed for growth, at a time when Microsoft is growing their license revenue at good pace.

[Gautham_Kundapur]

Is the date for 2026 Q1 results provided? Based on previous concalls, the June ending would have earnings due to from previous quarters.

[aditya14920251]

Yes, @Gautham_Kundapur , you are right. They have not announced the date of Q1 results release yet.

https://nsearchives.nseindia.com/corporate/ALLETECH_24062026180141_Alletec_Closure_of_Trading_Window.pdf

[sandesh]

These are my question on last concall

[Gautham_Kundapur]

Thanks. I believe we have the results coming out today and concall next week.

Points to look out are similar to last one:

1. AI pipeline and revenue for AI specific services.
2. Acquisition/ expansion with surplus cash
3. Listing on main board.

[Gautham_Kundapur]

Q1-27 results

[Vignesh_Namani]

booked loss in ALL E tech,

Only reason i sold was after having approx 163 cr reserves promotoers were lazy and havent done any substantial investmnet. mgmt only word was we have partned with microsoft and we hope future is bright..

enough is enough with this script.. best suggestion is to park this money in any mf may be trust small or helios small they will give good returns not this script