ESDS Stock Surges 76% on Debut, Analysts See 71% Upside

ESDS Software Solutions experienced a remarkable market entry, with its shares listing at a significant premium of over 76% on September 4, 2026. The stock opened at Rs 757 on the NSE, marking a strong start before continuing its ascent. By Monday, the shares reached the 20% upper circuit limit for the second consecutive session, closing at Rs 1,090.05 on the NSE.

Analysts at Choice Institutional Equities have initiated coverage with a 'BUY' rating, setting a target price of Rs 1,550, which suggests a potential upside of nearly 71%. Their valuation is based on 18 times FY28E EV/EBITDA, with a DCF used for validation. They highlight ESDS's strategic advantage in India's growing cloud, data-center, and AI infrastructure sectors.

Growth is anticipated to be driven by capacity expansions, enhanced customer monetization, and operating leverage. The recent USD 1.25 billion AI contract is expected to be a significant catalyst, adding a new dimension to the company's earnings. Over FY26-29E, revenue, EBITDA, and PAT are projected to grow at impressive CAGRs of 120.9%, 72.6%, and 81.3%, respectively.

The valuation of 18 times FY28E EV/EBITDA translates to approximately 31 times FY28E forward P/E. Successful execution of its strategy and the rapid ramp-up of the AI contract could lead to even greater upside in earnings and valuation for ESDS.