ESDS Software Solution Ltd

Platform	Last Traded Price	Min Quantity

Strengths & Weaknesses

Strengths

Experienced Promoter: Mr. Piyush Somani, with over two decades of industry experience, has helped establish a strong market presence in managed services and cloud computing solutions.

Growing Operations and Profitability: ESDS operates four data centres across India, contributing to a 17% CAGR in revenue over the past three years, with an expected Rs 282 crore in revenue for FY 2024. Operating profitability is projected to improve to 34% in FY 2024, up from 23.9% in FY 2023, driven by expansion and cost improvements. Revenue is expected to grow 40% in FY 2025, maintaining profitability at 33-35%.

Diverse Client Base: With over 600 clients across government, corporate, and BFSI sectors, ESDS has strong revenue visibility, as 35% of its revenue comes from its top 10 clients.

Weaknesses

High Working Capital Needs: Elevated receivables (above 100 days) due to quarterly billing and credit terms, coupled with ramped-up operations, result in a significant working capital requirement. Effective management of this will be crucial for cash flow.

Financial Risk: Expanding data centres requires high capex and opex. The company spent Rs 130-150 crore in the past three years, with continued elevated spending. Higher interest rates have increased financial risk, with a 1.2x liabilities to net worth ratio as of March 31, 2024. Maintaining margins and managing costs at lower interest rates will be key.

Balance Sheet	FY2024	FY2023	FY2022	FY2021	FY2020
Equity Capital	5.22	5.22	9.16	9.29	9.29
Reserves	145.68	181.38	196.12	200.87	217.22
Total Equity	150.90	186.61	205.27	210.15	226.51
Borrowings	-	-	-	-	-
Other Non-Current Liabilities	119.40	112.37	138.43	157.96	184.28
Total Non current Liabilities	119.40	112.37	138.43	157.96	184.3
Borrowings	15.07	10.19	67.87	71.85	75.91
Other Current Liabilities	126.23	151.27	110.96	60.74	61.02
Total current Liabilities	141.30	161.46	178.83	132.59	136.9
Equity + Liabilities	411.60	460.44	522.53	500.70	547.71
Fixed Assets (incl. WIP)	224.95	211.61	220.86	207.72	222.83
Other Non Current Assets	84.26	127.24	105.91	112.22	112.21
Total Non current Assets	309.21	338.85	326.76	319.94	335.0
Trade Receivables	46.09	46.62	63.85	57.13	69.00
Cash & Cash Equivalents	0.66	15.20	49.70	19.89	2.25
Other Current Assets	55.65	59.77	82.22	103.74	141.42
Total current Assets	102.39	121.59	195.77	180.76	212.7
Total Assets	411.60	460.44	522.53	500.70	547.71

Profit & Loss	FY2024	FY2023	FY2022	FY2021	FY2020
Revenue from Operations	158.57	171.93	195.36	207.57	286.5
Growth %	-	8.42%	13.63%	6.25%	38.04%
Operating Expenses	108.81	110.30	136.67	160.09	184.5
Growth %	-	1.36%	23.92%	17.13%	15.22%
Operating Profit	49.76	61.63	58.69	47.48	102.1
Op. Profit Margin %	31.38%	35.85%	30.04%	22.87%	35.62%
Other Income	1.96	2.17	3.33	4.68	5.6
Finance Costs	11.32	17.65	17.72	25.93	31.6
Depreciation	36.93	37.39	42.95	49.15	52.6
Exceptional Items	-	-	3.50	4.78	1.3
Profit Before Tax	3.48	8.77	-2.1	-27.7	22.3
Tax	2.54	3.28	0.52	-5.24	8.7
Tax %	1.60%	1.91%	0.26%	-2.52%	3.03%
Profit After Tax	0.94	5.48	-2.66	-22.46	13.61
Growth %	-	486.63%	-148.55%	743.41%	-160.60%
PAT %	0.59%	3.19%	-1.36%	-10.82%	4.75%
Diluted EPS	0.04	0.96	-0.42	-2.42	1.4

Shareholding Pattern

Color	Shareholder	Holding
	Piyush Somani	28.91%
	PO Somani Family Trust	24.19%
	Sarla Somani	2.02%
	SAGF II Holdings LLC	10.23%
	South Asia Growth Fund II, L.P. (SAGF)	22.30%
	GEF ESDS Partners, L.L.C. (GEPL)	8.16%
	Esds Employee Benfit Trust	2.56%
	Othes	1.63%

Fundamentals

Quick Insights

Experienced Promoter: Mr. Piyush Somani, with over two decades of industry experience, has helped establish a strong market presence in managed services and cloud computing solutions. Growing Operations and Profitability: ESDS operates four data centres across India, contributing to a 17% CAGR in revenue over the past three years, with an expected Rs 282 crore in revenue for FY 2024. Operating profitability is projected to improve to 34% in FY 2024, up from 23.9% in FY 2023, driven by expansion and cost improvements. Revenue is expected to grow 40% in FY 2025, maintaining profitability at 33-35%. Diverse Client Base: With over 600 clients across government, corporate, and BFSI sectors, ESDS has strong revenue visibility, as 35% of its revenue comes from its top 10 clients.

Market Cap₹4,737.6 Cr

PE Ratio377.78

EPS₹1.35

Dividend Yield-

Book Value₹22.62 Cr

Debt/Equity0.342

Price/Book22.55

Price/Sales-

Industry PE-

Sales₹286.5 Cr

Profit After Tax₹13.61 Cr

Share Capital₹9.29 Cr

Shares Outstanding-

ISININE0DRI01029

SectorIT

Symbol-

About Company

Founded in 2005 in Nashik and led by Mr. Piyush Somani, ESDS offers IT infrastructure services, including cloud computing, colocation data centre infrastructure, SaaS, and managed services.

Quick Insights

Experienced Promoter: Mr. Piyush Somani, with over two decades of industry experience, has helped establish a strong market presence in managed services and cloud computing solutions. Growing Operations and Profitability: ESDS operates four data centres across India, contributing to a 17% CAGR in revenue over the past three years, with an expected Rs 282 crore in revenue for FY 2024. Operating profitability is projected to improve to 34% in FY 2024, up from 23.9% in FY 2023, driven by expansion and cost improvements. Revenue is expected to grow 40% in FY 2025, maintaining profitability at 33-35%. Diverse Client Base: With over 600 clients across government, corporate, and BFSI sectors, ESDS has strong revenue visibility, as 35% of its revenue comes from its top 10 clients.

Market Cap₹4,737.6 Cr

PE Ratio377.78

EPS₹1.35

Dividend Yield-

Book Value₹22.62 Cr

Debt/Equity0.342

Price/Book22.55

Price/Sales-

Industry PE-

Sales₹286.5 Cr

Profit After Tax₹13.61 Cr

Share Capital₹9.29 Cr

Shares Outstanding-

ISININE0DRI01029

SectorIT

Symbol-

About Company

Founded in 2005 in Nashik and led by Mr. Piyush Somani, ESDS offers IT infrastructure services, including cloud computing, colocation data centre infrastructure, SaaS, and managed services.

Strengths

Experienced Promoter: Mr. Piyush Somani, with over two decades of industry experience, has helped establish a strong market presence in managed services and cloud computing solutions.

Diverse Client Base: With over 600 clients across government, corporate, and BFSI sectors, ESDS has strong revenue visibility, as 35% of its revenue comes from its top 10 clients.

Weaknesses

Annual Reports

FY FY FY

Balance Sheet	FY2024	FY2023	FY2022	FY2021	FY2020
Equity Capital	5.22	5.22	9.16	9.29	9.29
Reserves	145.68	181.38	196.12	200.87	217.22
Total Equity	150.90	186.61	205.27	210.15	226.51
Borrowings	-	-	-	-	-
Other Non-Current Liabilities	119.40	112.37	138.43	157.96	184.28
Total Non current Liabilities	119.40	112.37	138.43	157.96	184.3
Borrowings	15.07	10.19	67.87	71.85	75.91
Other Current Liabilities	126.23	151.27	110.96	60.74	61.02
Total current Liabilities	141.30	161.46	178.83	132.59	136.9
Equity + Liabilities	411.60	460.44	522.53	500.70	547.71
Fixed Assets (incl. WIP)	224.95	211.61	220.86	207.72	222.83
Other Non Current Assets	84.26	127.24	105.91	112.22	112.21
Total Non current Assets	309.21	338.85	326.76	319.94	335.0
Trade Receivables	46.09	46.62	63.85	57.13	69.00
Cash & Cash Equivalents	0.66	15.20	49.70	19.89	2.25
Other Current Assets	55.65	59.77	82.22	103.74	141.42
Total current Assets	102.39	121.59	195.77	180.76	212.7
Total Assets	411.60	460.44	522.53	500.70	547.71

Profit & Loss	FY2024	FY2023	FY2022	FY2021	FY2020
Revenue from Operations	158.57	171.93	195.36	207.57	286.5
Growth %	-	8.42%	13.63%	6.25%	38.04%
Operating Expenses	108.81	110.30	136.67	160.09	184.5
Growth %	-	1.36%	23.92%	17.13%	15.22%
Operating Profit	49.76	61.63	58.69	47.48	102.1
Op. Profit Margin %	31.38%	35.85%	30.04%	22.87%	35.62%
Other Income	1.96	2.17	3.33	4.68	5.6
Finance Costs	11.32	17.65	17.72	25.93	31.6
Depreciation	36.93	37.39	42.95	49.15	52.6
Exceptional Items	-	-	3.50	4.78	1.3
Profit Before Tax	3.48	8.77	-2.1	-27.7	22.3
Tax	2.54	3.28	0.52	-5.24	8.7
Tax %	1.60%	1.91%	0.26%	-2.52%	3.03%
Profit After Tax	0.94	5.48	-2.66	-22.46	13.61
Growth %	-	486.63%	-148.55%	743.41%	-160.60%
PAT %	0.59%	3.19%	-1.36%	-10.82%	4.75%
Diluted EPS	0.04	0.96	-0.42	-2.42	1.4

Shareholding Pattern

Color	Shareholder	Holding
	Piyush Somani	28.91%
	PO Somani Family Trust	24.19%
	Sarla Somani	2.02%
	SAGF II Holdings LLC	10.23%
	South Asia Growth Fund II, L.P. (SAGF)	22.30%
	GEF ESDS Partners, L.L.C. (GEPL)	8.16%
	Esds Employee Benfit Trust	2.56%
	Othes	1.63%

Board of Directors

Mr. Piyush SomaniChairman-cum-Managing Director

Ms. Komal SomaniWhole Time Director

Mr. Alipt SharmaNominee Director

Mr. Dhandapani T. G.Independent Director

Ms. Pamela KumarIndependent Director

Mr. Venkatesh NatarajanIndependent Director

Senior Management

Mr. Piyush SomaniChairman-cum-Managing Director

Mr. Nadukuru Sita RamaiahChief Financial Officer

Mr. Prasad DeokarCompany Secretary