ESDS Software Solution share price came under pressure on Friday after the recently listed enterprise cloud and artificial intelligence company reported its financial results for the quarter ended June 2026. The stock was locked in its 5% lower circuit at ₹1,757.65 per share on the BSE as investors reacted to a sharp sequential decline in profitability and a moderation in revenue growth.
Despite Friday’s fall, ESDS Software shares have delivered a substantial gain since their market debut. The stock had touched a 52-week high of ₹1,864.35 in September 2026, while its 52-week low stood at ₹746.30 on September 4.
The stock-market debut took place on September 4, and the shares have since gained around 310% from their IPO price of ₹429. ESDS Software Solution shares made their debut on the NSE at ₹757 apiece earlier this month, representing a 76.46% premium over the issue price. The company’s ₹720-crore IPO was offered in the price band of ₹408- ₹429 per share.
ESDS Software Q1 results
ESDS Software Solution reported a 14% year-on-year increase in net profit for the quarter ended June 30, 2026, with profit rising to ₹29.3 crore in Q1 FY27 from ₹25.7 crore in the corresponding quarter of the previous year.
However, the sequential comparison painted a weaker picture. Net profit plunged around 57% from ₹67.7 crore in the previous quarter.
Operating revenue increased 7.3% year-on-year to ₹133.7 crore in Q1 FY27 from ₹124.6 crore in Q1 FY26. On a quarter-on-quarter basis, however, operating revenue declined 20.2% from ₹167.5 crore recorded in the preceding quarter.
Including other income of ₹1.5 crore, ESDS Software’s total income for the quarter stood at ₹135.2 crore. At the same time, total expenses rose 8.4% year-on-year and 16.5% sequentially to ₹98.7 crore during Q1 FY27.
The company’s latest revenue performance also marked a notable moderation from its recent growth trajectory. ESDS Software had recorded an operating revenue CAGR of roughly 28.4% between FY24 and FY26, making the 7.3% year-on-year growth reported in Q1 FY27 comparatively slower.
Should you buy?
Choice Broking had initiated coverage on ESDS Software with a ‘Buy’ rating and a target price of ₹1,550, based on a valuation of 31 times its estimated FY28 forward price-to-earnings (P/E). The brokerage identified the expansion of India’s cloud-services and cloud-GPU markets as key potential growth triggers for the company.
For FY26, Choice Broking had estimated ESDS Software’s revenue at ₹472 crore, rising sharply to ₹2,263 crore in FY27, ₹4,581 crore in FY28 and ₹5,092 crore in FY29. Its profit after tax (PAT) estimates stood at ₹120.8 crore for FY26, ₹251.6 crore for FY27, ₹577 crore for FY28 and ₹719 crore for FY29.
The FY26 estimates were broadly in line with ESDS Software’s reported full-year performance, with the company recording ₹472.2 crore in revenue and ₹120.8 crore in net profit.
However, the company’s Q1 FY27 performance represented only a fraction of Choice Broking’s full-year forecast. At ₹29.3 crore, ESDS Software’s Q1 FY27 profit accounted for around 12% of the brokerage’s ₹251.6 crore FY27 PAT estimate.
ESDS Software launches Swaraj Sethu platform
Separately, ESDS Software Solutions said in an exchange filing dated September 14 that it had launched Swaraj Sethu, an enterprise software delivery and security platform.
The new platform is expected to complement Swaraj Cloud, ESDS’s AI Autonomous Architect Cloud Platform, while supporting multiple stages of the software development and delivery lifecycle.
The unified workspace integrates capabilities across development, deployment, infrastructure, monitoring and security. According to the company’s press release, Swaraj Sethu includes features such as multi-tenancy, granular role-based access, context switching across tenants and environments, single sign-on, secrets management and comprehensive audit trails.
ESDS Software Solution Limited operates in cloud and data centre services, offering integrated solutions across cloud infrastructure, managed services and software platforms. Its offerings include Infrastructure as a Service (IaaS), Software as a Service (SaaS) and managed services, along with government community cloud (GCC) and enterprise community cloud (ECC) platforms, managed security services, advanced IT assistance and pay-per-use models.
Founded in 2005, the company is based in Thane, India.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
