Up 230% in 4 sessions! ESDS Software Solution share price hits 10% upper circuit | Should you buy the newly listed stock

ESDS Software Solution share price has been on fire since listing. The strong debut was followed by another sharp upward move, taking the stock’s gains to around 230% from its IPO issue price.

Just today, 9 September, the stock hit its 10% upper circuit of ₹1,418.50 per share on BSE. In the last 2 sessions as well, the stock had hit its 20% upper circuit.

ESDS Software Solution shares were listed at ₹757 on the NSE on 4 September, a 76.46% premium over the IPO issue price of ₹429 per share. On the BSE, it opened at ₹746.30, a 73.96% premium over the issue price.

Investors who received shares in the IPO have seen their investment more than tripled in just four trading sessions. On the listing day itself, Friday, September 4, the stock had surged around 112%.

ESDS Software Solution: Should you buy?

After a stock delivers a strong listing-day performance, the next question for investors is often whether the rally still has room to run or whether it is time to wait for a more attractive entry point.

Brokerage firm Choice Equity Broking has initiated coverage on ESDS Software Solutions with a 'buy' recommendation and assigned a target price of ₹1,550, indicating an upside of another 20% from its previous close of ₹1,289.55.

Choice believes ESDS represents one of the most compelling listed opportunities for investors seeking exposure to India's structural expansion in cloud computing, data centres and AI infrastructure. The brokerage highlighted the company's full-stack capabilities spanning cloud, managed infrastructure and data centre services as a key differentiator.

"Growth is underpinned by capacity expansion, deeper customer monetisation and operating leverage, with the $1.25 billion AI contract adding a significant new leg to the earnings trajectory," said Choice.

The brokerage expects ESDS Software Solution to deliver strong growth over the forecast period. Revenue, EBITDA and PAT are estimated to grow at 120.9%, 72.6% and 81.3% CAGR, respectively, over FY26–29E. Choice expects this expansion to be driven by continued momentum in the core business as well as the gradual ramp-up of revenues from its AI infrastructure operations.

"Our 18 times FY28E EV/EBITDA valuation implies nearly 31 times FY28E forward P/E, which we believe appropriately reflects ESDS’s strong growth profile. Successful execution and faster ramp-up of the AI contract could provide further upside to earnings and valuation," it added.

The company's growth outlook has also attracted a positive view from Santosh Meena, Head of Research at Swastika investmart. According to Meena, fundamentally, ESDS is a high-quality mid-sized Indian infrastructure/cloud player with a credible sovereign + AI narrative, demonstrated margin expansion, and improving balance sheet. The core business is solid with a clear growth runway in AI infrastructure and sovereign cloud, but after the rapid ~3x market-cap expansion, the stock now embeds very high expectations, he noted.

“Valuations look stretched on trailing numbers and require successful, rapid monetization of the AI/GPU investments and international contracts to be justified. Near-term volatility is likely as the stock digests the rally; any disappointment on utilization, margins, or deal conversion could lead to sharp corrections. This is now more of a high-conviction growth/AI-infra story than a value or even moderately valued play,” he predicted.

ESDS Software Solution IPO Details

ESDS Software Solution launched its IPO for public subscription on Friday, 28 August, with the issue closing on Tuesday, 1 September. The offering attracted exceptionally strong demand. By the final day of bidding, the public issue had been subscribed 135.88 times.

The IPO comprised entirely of a fresh issue of equity shares worth up to ₹720 crore, with no offer-for-sale component. The company had set the price band at ₹408–429 per share.

ESDS Software Solution is an AI-enabled provider of cloud, managed services, data centre infrastructure and software solutions in India.

The company is one of only two players in India offering a complete suite that brings together GPU-as-a-Service (GPUaaS), cloud, managed services, data centre infrastructure and software solutions. Its customer base is spread across several industries and customer categories.

During fiscal 2026, ESDS Software Solution served more than 2,500 customers, including clients across banking, financial services and insurance (BFSI), public sector organisations, businesses and enterprises.

The company's financial performance has also improved considerably over the past three financial years. Profit attributable to owners followed a similar trajectory. It stood at ₹12.57 crore in FY24, climbed to ₹55.61 crore in FY25 and increased further to ₹120.28 crore in FY26. Meanwhile, revenue from operations increased from ₹286.52 crore in FY24 to ₹361.34 crore in FY25, before rising further to ₹472.21 crore in FY26.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.