ESDS Software Solution shares demonstrated a strong recovery on Friday, climbing over 10% from their day's lowest point to close the trading session in positive territory. The stock, which had faced a period of weakness, reached an intraday high of Rs 1,495.75 on the BSE, hitting its 5% upper price band.
The company, which specializes in data center and artificial intelligence (AI) infrastructure, made its stock market debut on September 4 following an initial public offering (IPO) priced at Rs 429 per share. At Friday's high, ESDS shares were trading approximately 249% above their IPO price.
Stock Performance and Market Context
On Friday, ESDS Software Solution shares were recorded at Rs 1,495.75, marking a 5% increase or Rs 71.20 from their previous closing price of Rs 1,424.55. The stock opened at Rs 1,417.95, dipped to a day's low of Rs 1,353.35, before staging its significant recovery. This rebound of Rs 142.40 represents an approximate 10.5% gain from the intraday low to high, contributing to a 4.1% rise over the past month.
Analyst Outlook and Financials
Despite the recent surge, Choice Institutional Equities maintained a 'Sell' rating on ESDS, citing a less favorable near-term risk-reward profile. The brokerage acknowledged the company's strong longer-term prospects but highlighted immediate challenges. A key concern was the delayed deployment of its Sharon AI project, which pushed expected AI-led revenue contributions from October to November.
Choice also emphasized the importance of monitoring pipeline conversion, deployment timelines, and GPU capacity utilization as ESDS scales its operations. However, the firm remained optimistic about the long-term opportunities in sovereign cloud, AI infrastructure, and increasing GPU demand. ESDS reportedly holds a domestic order book of around Rs 3,000 crore and an international pipeline exceeding 50,000 GPUs.
Quarterly Financials (June Quarter)
- Revenue: Rs 133.6 crore (down 20.2% sequentially, up 7.2% year-on-year)
- EBITDA: Rs 55.9 crore (down 45.5% sequentially, up 6.6% year-on-year)
- EBITDA Margin: 41.9% (down from 61.3% in the prior quarter)
- Profit After Tax (PAT): Rs 29.2 crore (down 56.8% sequentially, up 13.8% year-on-year)
Choice Institutional Equities reiterated its target price of Rs 1,550 for ESDS, valuing the company at 18 times its estimated FY28 enterprise value to EBITDA.