Shares of recently-listed ESDS Software Solution, an Indian provider of AI-enabled IT infrastructure, cloud computing and data centre services, have advanced 300% to Rs 1,716 on September 11 compared with the issue price of Rs 429. With more than 100% gains, ESDS Software Solution made a strong debut on Dalal Street on September 4. The market capitalisation of the company stood at more than Rs 2,200 crore on September 9. The company offers an integrated portfolio of laaS, managed services and SaaS to BFSI, government and enterprise customers.
According to Beacon Caps, the company is well positioned to benefit from the growing Al, cloud and GPU infrastructure opportunity. Its proprietary SWARAJ Cloud platform and Al-enabled solutions provide
technological differentiation, while its diversified presence across BFSI, government and enterprise
segments support customer diversification. The $1.25 billion, five-year agreement with Sharon AI
for deployment of around 8,000 Nvidia B300 GPUs in Australia provides strong revenue visibility
and strengthens ESDS’s international presence in Al cloud and high-performance computing.
ESDS is also investing aggressively in capacity expansion, with Rs 576 crore of IPO proceeds
earmarked for cloud computing, GPU, storage, networking and supporting infrastructure. The
company plans to expand its data-centre footprint with new facilities in Kolkata and Sahibabad,
alongside upgrading existing infrastructure. These investments are expected to enhance capacity,
improve operational efficiency and enable ESDS to capture rising demand for cloud, AI/ML and
data-centre services.
Revenue of the company grew 30.68% YoY in FY26, driven by a 157.22% surge in Managed Services revenue to Rs 194.59 crore, supported by strong growth from existing customers and new international customers enterprise clients. laaS and SaaS revenues were impacted by lower contributions from new customers and the Russian BFSI customer. Despite the softness in these segments, EBITDA margin expanded to 49.60%, supported by a favourable revenue mix and operating leverage.
The company has also significantly reduced its borrowings, bringing the D/E ratio down to 0.08x, resulting in lower finance costs and a stronger balance sheet, providing greater flexibility for future expansion.
Choice Institutional Equities believes that the country’s underpenetrated cloud market offers a durable growth runway, with AI adding a higher-growth layer. India’s cloud market is expected to grow at a 23.6% CAGR through FY25 from Rs 65,100 crore to Rs 1.9 lakh crore in FY30, supported by enterprise digitisation, BFSI adoption and rising government workloads. Increasing data-residency and compliance requirements further favour domestic infrastructure providers, where ESDS has established credentials and a diversified exposure across Enterprise (55.1%), Government (27.4%) and BFSI (17.5%). Beyond the core opportunity, India’s cloud GPU market is projected to grow at around 50% CAGR through FY30, expanding ESDS’s addressable market into GPUaaS, GPU colocation and AI-led managed infrastructure.
