ESDS stock surges 302%, emerges as second-best new listing; stock that tops the list

With ESDS Software Solution Ltd surging 302 per cent over its IPO issue price of Rs 429 apiece, the stock has become India's second-best new listing in terms of returns, after Paras Defence, which delivered a 430 per cent rise from its offer price over the first month, Bloomberg data showed.

A play on data-center and artificial intelligence (AI), ESDS was listed on September 4. It has since been rallying as investors bet on India’s underpenetrated cloud market offers a durable growth runway, with AI adding a higher-growth layer.

Indian Renewable Energy Development Agency (IREDA) gained 221 per cent in the first month of listing, followed by PTC India Ltd at 219 per cent, Indian Railway Catering and Tourism Corporation Ltd (IRCTC) at 191 per cent and Power Grid Corporation of India Ltd at 187 per cent, Bloomberg reported.

ESDS Software shares settled at Rs 1,703.50 on Tuesday, hitting its upper circuit limit for the second session.

Analysts noted that the $1.25 billion AI infrastructure contract with Sharon AI marked a potential inflection point for ESDS, with revenue expected to scale from Rs 470 crore in FY26 to Rs 2260 crore in FY27 and Rs 4580 crore in FY28.

The contract, Choice Institutional Equities said, provided 5-year revenue visibility, with 8,208 NVIDIA B300 GPUs to be deployed, taking GPU compute capacity from 81 teraflops to 2,481 teraflops.

ESDS plans Rs 570 crore of capex, 70 per cent of which is front-loaded in FY27, to build the
required local DC infrastructure and expand new DC. Ebitda is estimated to rise from Rs 230 crore in FY26 to Rs 940 crore in FY28, with margin reaching 20.6 per cent by FY28, Choice said.

"Key earnings upside lies in replicating the GPU lease model beyond the anchor contract, although execution, deployment and customer monetisation remain critical to converting the headline contract value into sustained earnings," it noted.

Choice said ESDS offered one of the most compelling listed opportunities to gain exposure to India’s structural cloud, data-centre and AI infrastructure build-out, supported by its full-stack capabilities across cloud, managed infrastructure and data-centre services.