ESDS Software IPO Financial Performance: What Investor’s Should Know Before Applying?
ESDS Software Solution is positioned as a cloud and data-centre infrastructure company rather than a conventional IT services business. Its growth strategy is increasingly focused on cloud computing, AI infrastructure, GPU-as-a-Service and data-centre expansion.
ESDS Software IPO Financial Performance
ESDS has shown a strong improvement in both revenue and profitability. Total income increased from ₹292.14 crore to ₹480.65 crore in two years, while PAT rose nearly ninefold to ₹120.82 crore. At the same time, EBITDA margin expanded to 49.60% and borrowings fell substantially, indicating a much stronger financial position.
ESDS Software IPO Profit Growth
PAT increased from ₹13.61 crore in FY24 to ₹120.82 crore in FY26, with FY26 profit rising approximately 117% year-on-year. The faster growth in earnings compared with revenue reflects significant margin expansion. The key consideration going forward is whether these margins can remain sustainable as ESDS invests heavily in AI, GPU and data-centre infrastructure.
Read More: ESDS Software IPO GMP Today: Listing Price, Allotment Date & Review
ESDS Software IPO Business Overview
ESDS Software Solution operates across cloud computing, data centres, managed IT services and SaaS. Its major offerings include:
- Infrastructure as a Service (IaaS)
- Managed Services
- Software as a Service (SaaS)
- GPU-as-a-Service
- Cloud and data-centre infrastructure
This combination gives ESDS exposure to both recurring cloud services and the rapidly expanding demand for AI computing infrastructure.
ESDS Software Revenue Mix
Enterprises contribute 55.1% of revenue, while government and BFSI contribute 27.4% and 17.5%, respectively. The company also reports 95.46% net revenue retention, indicating strong customer retention and recurring business potential.
ESDS Software IPO AI & GPU Opportunity
AI infrastructure is emerging as one of ESDS's major growth drivers. The company has secured a $1.95 billion five-year contract with Sharon AI and plans to deploy 8,192 NVIDIA B300 GPUs in October 2026, with discussions for another 16,000 GPUs.
ESDS generated ₹75 crore from technical design and GPUaaS revenue in FY26 and received ₹1,187 crore in upfront customer advances for the initial infrastructure buildout. This provides funding support for its GPU expansion while reducing the immediate financing burden.
ESDS Software IPO Data Centre Expansion
ESDS currently operates five Tier-3 data centres with 8.9 MW of domestic capacity. It plans to expand this to 37.8 MW by FY30, including a proposed 20 MW liquid-cooled facility in Sahibabad. The planned capacity expansion is aimed at supporting growing cloud and AI workloads. The move toward liquid-cooled infrastructure is particularly relevant as high-density GPU deployments require greater power and cooling capacity.
ESDS Software IPO Peer Comparison
E2E Networks is one of the closest listed Indian comparisons for ESDS, although their operating models differ.
ESDS's 41.61x P/E is substantially below the 819.78x broader industry peer-group average cited in its analysis. However, the lack of directly comparable listed Indian companies makes a straightforward valuation comparison difficult.
ESDS Software IPO Order Book & Customers
ESDS has a ₹980 crore domestic order book, with around 70% expected to be monetised over the next three years. It serves more than 1,000 customers, including Canara Robeco Mutual Fund, Indian Institute of Banking & Finance, Indian Oil Skytanking and Balmer Lawrie & Co.
The combination of a sizeable order book and 95.46% net revenue retention provides visibility for future revenue, although execution remains important as the company scales its infrastructure.
ESDS Software IPO Strengths
- Strong profitability: EBITDA margin increased to 49.60% and PAT reached ₹120.82 crore in FY26.
- AI & GPU opportunity: The Sharon AI contract and planned NVIDIA GPU deployment create significant growth potential.
- Lower borrowings: Debt declined from ₹149.04 crore to ₹42.92 crore between FY24 and FY26.
- Data-centre expansion: Domestic capacity is planned to rise from 8.9 MW to 37.8 MW by FY30.
- Customer retention: 95.46% NRR supports the recurring nature of the business.
ESDS Software IPO Risks
- High valuation: The ₹429 upper price band implies a post-IPO P/E of around 41.61x.
- Capital-intensive growth: GPU and data-centre expansion requires significant investment.
- Execution risk: Scaling capacity from 8.9 MW to 37.8 MW will require timely execution and utilisation.
- Contract concentration: Large contracts provide revenue visibility, but delays or changes could affect expected growth.
ESDS Software IPO: Final Review
ESDS combines cloud computing, data-centre infrastructure and AI/GPU capabilities, giving it a different growth profile from traditional software companies. Strong profit growth, declining debt, a ₹980 crore order book and the planned GPU expansion strengthen the growth case.
However, the 41.61x P/E already reflects significant expectations, while the capital-intensive expansion creates execution and utilisation risks. The company's ability to convert its AI pipeline, order book and new infrastructure into sustainable earnings will remain central to its long-term growth story.
