ESDS Software Solution reports 40.7% YoY net profit growth to ₹31.1 Cr in Q2 FY27

ESDS Software Solution posted a 40.7% year-on-year increase in net profit for Q2 FY27, reaching ₹31.1 Cr, while operating revenue grew 48% to ₹138.3 Cr. The company’s EBITDA margin stood at 41.8%, supported by strong performance in its Infrastructure-as-a-Service (IaaS) segment and high revenue retention from existing customers.

Tarun Mottlia

Editor, Lazyfounder

Published Nov 3, 20263 min read

ESDS Software Solution reports 40.7% YoY net profit growth to ₹31.1 Cr in Q2 FY27 — Image: Inc42 via source

30 SEC SUMMARY

ESDS Software Solution reported a 40.7% YoY rise in net profit to ₹31.1 Cr for Q2 FY27.
Operating revenue grew 48% YoY to ₹138.3 Cr, with EBITDA margin at 41.8%.
IaaS contributed 50.5% of revenue, outperforming managed services (31.2%) and SaaS (18.3%).
Existing customers drove 86.7% of revenue, signaling strong retention.

KEY HIGHLIGHTS

Net profit reached ₹31.1 Cr, up 40.7% YoY and 6.2% sequentially.
Revenue hit ₹138.3 Cr, a 48% YoY and 4% sequential increase.
EBITDA grew 18.3% YoY to ₹57.8 Cr, with a margin of 41.8%.
IPO-related expenses of ₹2.3 Cr reduced EBITDA and profit before tax by ~₹2.3 Cr each.
Existing customers accounted for 86.7% of revenue, showing high retention.

Profit and revenue growth

ESDS Software Solution’s consolidated net profit for Q2 FY27 rose 40.7% year-on-year to ₹31.1 Cr, up from ₹22.1 Cr in the same period last year. Sequentially, profit increased 6.2% from ₹29.3 Cr in Q1 FY27.

Operating revenue grew 48% year-on-year to ₹138.3 Cr, a 4% increase from ₹133 Cr in the previous quarter. The company’s EBITDA margin stood at 41.8%, with EBITDA growing 18.3% YoY to ₹57.8 Cr.

Revenue segments and customer retention

Infrastructure-as-a-Service (IaaS) contributed 50.5% of ESDS’s revenue, making it the largest segment. Managed services accounted for 31.2%, while Software-as-a-Service (SaaS) brought in 18.3%.

Existing customers drove 86.7% of the company’s revenue, underscoring strong retention and recurring revenue streams.

ESDS incurred ₹2.3 Cr in marketing and advertising expenses related to its initial public offering (IPO) during the quarter. Excluding these costs, EBITDA would have been ₹60.1 Cr, and profit before tax would have reached ₹42.5 Cr, highlighting the near-term drag on margins.

What this means

Lazyfounder analysis — our interpretation, not reported fact.

ESDS’s results reflect the growing demand for cloud infrastructure in India, particularly in IaaS, which is now the dominant revenue stream for the company. The 41.8% EBITDA margin signals that cloud businesses can achieve strong profitability even amid investment phases like an IPO. For founders, this quarter’s performance underscores two key lessons: the importance of doubling down on high-margin segments like IaaS, and the need to balance growth initiatives with cost discipline, especially during capital-market transitions.

Key takeaways

ESDS’s IaaS segment is its primary revenue driver, outpacing managed services and SaaS. Founders in cloud infrastructure should assess whether their product mix aligns with this high-margin segment.
Strong revenue growth from existing customers suggests subscription and retention strategies are working. Competitors in cloud services may need to revisit customer success programs.
EBITDA margin of 41.8% sets a benchmark for profitability in India’s cloud computing sector. Startups in this space can use this as a reference for operational efficiency.
The impact of IPO-related expenses on profitability highlights the trade-offs in public listings. Founders planning IPOs should model these costs into their financial projections.

More business news

Sources

Inc42 · 2026-11-02
ESDS Q2 Profit Zooms 41% YoY To ₹31.1 Cr, Revenue Up 48%

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