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ESDS Software Shares Fall After Q1 Profit Decline
ESDS Software sells cloud, data-centre and software services.
Its shares fell by the maximum 5% allowed in one trading session after the company announced its latest results.
The company earned ₹29.3 crore in profit during the quarter.
That was higher than the same quarter last year, but much lower than the previous quarter.
Revenue also grew compared with last year but declined from the previous quarter.
Investors appeared concerned that growth and profitability had slowed.
The stock is still much more expensive than its IPO price because it has risen about 310% since listing.
Choice Broking believes the company could grow as cloud and cloud-GPU markets expand, but the article highlights that the latest results were below the pace implied by its forecasts.
ESDS Software shares hit the 5% lower circuit at ₹1,757.65 after Q1 FY27 results showed weaker sequential performance.
Q1 FY27 net profit rose 14% year on year to ₹29.3 crore but fell 57% from the previous quarter.
Operating revenue increased 7.3% year on year to ₹133.7 crore, while declining 20.2% sequentially.
The stock remains about 310% above its ₹429 IPO price after debuting at ₹757 on the NSE.
Choice Broking retained a ‘Buy’ view with a ₹1,550 target, citing potential growth in cloud services and cloud-GPU markets.
- Who
- ESDS Software Solution and its investors; Choice Broking also provided an investment view.
- What
- ESDS Software shares fell 5% after the company reported Q1 FY27 results showing year-on-year growth but sharp sequential declines in profit and revenue.
- Where
- The shares traded on the BSE and NSE; ESDS Software is based in Thane, India.
- When
- The results were for the quarter ended June 30, 2026, and the share-price reaction occurred on Friday; the article also refers to events in September 2026.
- Why
- Investors reacted to weaker sequential profitability and moderating revenue growth, while Choice Broking cited possible expansion in cloud-services and cloud-GPU markets.
Bullish outlook
Cautious outlook
Investment case
Bullish outlook
Choice Broking rated ESDS Software ‘Buy’ with a ₹1,550 target and identified expansion in India’s cloud-services and cloud-GPU markets as potential growth drivers.
Cautious outlook
The latest quarter showed a 57% sequential fall in profit and a 20.2% sequential decline in operating revenue, raising concerns about near-term performance.
Growth expectations
Bullish outlook
Choice Broking forecast revenue rising from ₹472 crore in FY26 to ₹2,263 crore in FY27, with profit after tax increasing to ₹251.6 crore.
Cautious outlook
Q1 FY27 profit of ₹29.3 crore represented only about 12% of the brokerage’s full-year FY27 profit forecast, while year-on-year revenue growth moderated to 7.3%.
Share valuation and momentum
Bullish outlook
The stock has gained about 310% from its ₹429 IPO price and reached a 52-week high of ₹1,864.35, indicating strong market momentum.
Cautious outlook
The shares fell to a 5% lower circuit after the results, and the brokerage’s ₹1,550 target is below the reported trading price of ₹1,757.65.
Key facts
- Q1 FY27 net profit
- ₹29.3 crore, up 14% year on year but down about 57% sequentially
- Q1 FY27 operating revenue
- ₹133.7 crore, up 7.3% year on year and down 20.2% sequentially
- Friday closing reaction
- Shares were locked in the 5% lower circuit at ₹1,757.65 on the BSE
- IPO price
- ₹429 per share; the IPO was offered in a ₹408–₹429 price band
- Listing performance
- Shares debuted at ₹757 on the NSE, a 76.46% premium to the issue price
- Choice Broking view
- ‘Buy’ rating with a target price of ₹1,550
- New platform
- Swaraj Sethu, an enterprise software delivery and security platform, was launched in an exchange filing dated September 14
Sources
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