The stock was locked at ₹1,760.50, down 5% from the previous close.
ESDS Software, which made its stock-market debut on September 4, has nevertheless gained around 330% from its IPO price of ₹429. The stock had closed at ₹1,853.15 on Thursday, taking the company’s market capitalisation to around ₹21,700 crore.
Q1 FY27 results
ESDS Software reported a 7.3% year-on-year increase in operating revenue to ₹133.7 crore in Q1 FY27. However, revenue declined 20.2% sequentially from ₹167.5 crore in the previous quarter.
Profit after tax rose 14% year-on-year to ₹29.3 crore, but declined around 57% sequentially from ₹67.7 crore.
The company’s Q1 revenue growth also compares with a roughly 28.4% revenue CAGR between FY24 and FY26, indicating a significant moderation in the pace of growth.
Q1 numbers vs expectations
The quarter comes against a backdrop of elevated growth expectations following ESDS Software’s strong stock-market debut.
Choice Broking, which initiated coverage on the stock with a ‘Buy’ rating and a target price of ₹1,550, had estimated revenue of ₹472 crore for FY26, rising sharply to ₹2,263 crore in FY27, ₹4,581 crore in FY28 and ₹5,092 crore in FY29.
The brokerage had estimated profit after tax at ₹120.8 crore in FY26, ₹251.6 crore in FY27, ₹577 crore in FY28 and ₹719 crore in FY29.
The FY26 revenue and profit estimates are broadly in line with the company’s reported full-year numbers, with ESDS having reported ₹472.2 crore in revenue and ₹120.8 crore in net profit for FY26.
At ₹29.3 crore, Q1 FY27 profit represents only around 12% of Choice Broking’s FY27 full-year PAT estimate of ₹251.6 crore.
The market is also watching for the revenue contribution from ESDS Software’s GPU infrastructure business, including its Australia opportunity. The expected ramp-up of this business will be important for the company to deliver the sharp revenue growth projected by the brokerage.
Valuation and market cap
At a market capitalisation of around ₹21,700 crore, ESDS Software is now valued above several established technology companies, including Tata Elxsi, which has a market capitalisation of around ₹20,000 crore based on recent market levels.
Choice Broking had based its ₹1,550 target price on a valuation of 31 times FY28 estimated forward price-to-earnings.
The brokerage had identified the growth of India’s cloud-services and cloud-GPU markets as key potential triggers for ESDS Software.