ESDS Software Hits ₹1,188 as $1.25B AI Factory and Robust Q2 Spark Turnaround
Shares of newly listed cloud and data infrastructure provider ESDS Software Solutions snapped a prolonged post-listing downturn on Tuesday, November 3, 2026, hitting the 5% upper circuit limit at ₹1,187.60 within opening minutes of trade on Dalal Street. The aggressive buying interest marks a sudden reversal for the stock, which had suffered relentless selling pressure since its September 2026 market debut, settling in the red across 11 of the preceding 12 sessions and declining nearly 40% from its post-listing peak of ₹1,859 alongside a 17% contraction over the past month. Investor confidence rebounded sharply after the enterprise reported its second-quarter earnings for fiscal 2027 following market hours on Monday, unveiling double-digit increases in revenue and net income alongside major milestones on an expansive international artificial intelligence computing venture.
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The firm’s operational turnaround was anchored by a strong financial showing in the September quarter, during which consolidated revenue jumped 47.5% year-on-year to ₹138.3 crore, compared to ₹133.7 crore in the June quarter, reflecting a sequential gain of 3.5% and taking first-half fiscal 2027 top-line growth to 24.6%. Net profit rose 40.7% year-on-year to ₹31.1 crore (₹311 million) against ₹22.1 crore in the corresponding period last year, alongside a 6.2% sequential increase from the June quarter. Operating profitability, however, absorbed upfront capacity building costs, with EBITDA margins remaining steady at 41.8% quarter-on-quarter but dipping from 52% logged in the prior-year period as other expenditures climbed 182% year-on-year to ₹50.8 crore (₹508 million). Segment performance revealed a mild rebalancing across core divisions, with Infrastructure as a Service (IaaS) generating ₹65.6 crore (down from ₹68.4 crore in June) to represent 47.4% of overall revenue, while standalone cloud services contributed ₹49.3 crore (down from ₹54.4 crore). Although the total customer base moderated to 1,709 from 2,216 in the previous quarter, the underlying quality of billing improved substantially, with average revenue per customer (ARPU) expanding from ₹2.4 million to ₹3.2 million and the revenue contribution from newly onboarded enterprise clients rising to 19.1% from 12.5%.
The $1.25B AI Transformation: Sydney's 8,200-GPU Hub and ₹1,176 Cr GPUaaS Advance
Fueling the market's long-term optimism is the company's high-performance computing expansion, centered on an upcoming artificial intelligence hub in Sydney, Australia, equipped with an 8,200-GPU capacity. Developed under a five-year contract valued at $1.25 billion for Sharon AI, the international computing installation is now slated for a commercial rollout in December 2026, slightly adjusted from its earlier November operational window. Management forecasts indicate that once operational, the facility will generate approximately ₹288 crore (₹2.88 billion) in monthly revenue, alongside an estimated monthly net profit of ₹50 crore to ₹60 crore (₹500 million to ₹600 million)—an amount that substantially exceeds the company's entire net profit for the entire September quarter. Further strengthening execution visibility, an ESDS subsidiary has already secured an advance tranche of ₹1,176.6 crore from an overseas enterprise client for a GPU-as-a-Service (GPUaaS) infrastructure project, validating Dalal Street's swift reassessment of the counter's forward valuation.
