ESDS Software Solutions delivered mixed financial results for the quarter ended June 2026, with consolidated net profit rising 14% year-on-year to ₹29.3 crore compared to ₹25.69 crore in the corresponding quarter of the previous year. However, the AI-enabled end-to-end IT services provider also reported sequential decline of 57% from ₹67.7 crore in the previous quarter. The company reported operating revenue growth of 7.3% YoY to ₹133.7 crore during the quarter, but revenue declined 20.2% sequentially from ₹167.5 crore in Q4 FY26. According to The Economic Times, this represents a significant moderation in the pace of growth compared to the company's roughly 28.4% revenue CAGR between FY24 and FY26.
In an exclusive interview with NDTV Profit, Piyush Somani, MD & CEO and Founder of ESDS Software Solutions, provided insights into the company's performance outlook. Somani noted that Q1 is traditionally the weakest quarter in the fiscal year, while Q4 is always strong, emphasizing that the company's business is not quarterly-based and investors should focus on YoY comparisons rather than sequential performance. The management expects earnings to improve once AI clusters deliver and anticipates higher growth from international customers. The company's order pipeline currently remains very strong, with plans to install over 50,000 GPUs in the next one year. However, Somani acknowledged some delays in future contracts due to GPU shortages, while current orders remain unaffected.
Shares of ESDS Software Solutions were locked in a 5% lower circuit at ₹1,757.65 on Friday, September 25, snapping its four-day winning streak as investors reacted to disappointing Q1 FY27 results. The stock had closed at ₹1,850.15 on Thursday, taking the company's market capitalisation to around ₹20,634 crore. Despite the recent selloff, the stock has delivered remarkable performance since its listing, gaining over 310% returns based on today's low and issue price of ₹429. As per Business Standard, both exchanges saw only 'sell' orders with sharp selling pressure in the counter. The AI-enabled end-to-end IT services provider, which offers data centre, cloud, colocation, managed services and AI infrastructure solutions, had been under pressure after its post-listing rally began to cool.
The stock's decline was primarily attributed to margin growth concerns and subdued sequential performance, as reported by The Economic Times. While the company registered overall growth across consolidated revenues and net profits, total expenses rising 8.4% pressured down the company's margin growth in the period under review. The EBITDA margins contracted by 21 basis points to 41.89% in Q1 FY27, compared to 42.10% in the same period of the previous fiscal year. Despite the margin pressure, the company's EBITDA improved 6.7% YoY to ₹56 crore, from ₹52 crore in the same period a year earlier, indicating operational efficiency improvements.
The stock has delivered remarkable performance since its listing, as reported by The Economic Times. ESDS listed at a 76.46% premium to its issue price of ₹757 per share and ended its listing day more than 110% above the issue price. The stock then hit a 20% upper circuit for the next two sessions, followed by three sessions of 10% gains and another 5% rise. The total gains reached 325% in just seven sessions before investors began booking profits and the post-IPO frenzy started to cool. According to Business Standard, based on today's low and issue price of ₹429, ESDS IPO investors are currently enjoying a 310% return in less than a month despite today's fall. The stock was listed on September 4, 2026, and has delivered multibagger gains to IPO investors.
The company's ₹720-crore IPO, priced at ₹408-429 per share, received exceptional investor response with 135.88 times oversubscription. The qualified institutional buyer (QIB) quota was booked 261.51 times, followed by non-institutional investors at 192.94 times subscription, while the retail portion was subscribed 39.64 times. The entire issue was a fresh share sale, with funds proposed for purchase and installation of cloud computing and other equipment and infrastructure for data centres, along with general corporate purposes. This strong investor response reflects confidence in ESDS's AI-enabled cloud, managed services, data centre infrastructure and software solutions business model.
