ESDS posts 41.90% operating margin in Q1FY27
The consolidated margin was 26.7 percentage points above the 15.2% median for 92 IT peers; the results were filed after market close.
Filed 24 Sep 2026, 20:30 IST · after market close · ESDS Software Solution Ltd (ESDS)
Key takeaways
- ESDS shares fell 5.00% in the first session after the consolidated Q1FY27 results were filed after market close.
- Operating margin was 41.9%, 26.7 percentage points above the 15.2% median for 92 reported information-technology peers.
- Other income of Rs 1.51 cr was small against profit before tax of Rs 36.47 cr, so reported profit was not mainly driven by non-operating income.
Price around the results
Q1FY27 profit retained a wide operating spread
ESDS generated Rs 56.00 cr of operating profit from Rs 133.66 cr of consolidated revenue, but depreciation of Rs 18.48 cr and interest of Rs 2.57 cr reduced the conversion into pre-tax profit. Tax of Rs 7.19 cr then brought net profit to Rs 29.28 cr. With no year-on-year or sequential comparison provided, the quarter's reported margin and profit structure are the main reference points.
Margin stood well above the reported IT peer median
The 41.9% operating margin was 26.7 percentage points above the 15.2% median among 92 information-technology peers that had reported the quarter. Other income was Rs 1.51 cr against Rs 36.47 cr of pre-tax profit, limiting the role of non-operating income in the reported result. The tax rate was 19.72%, but there is no comparison in the results data to assess whether it changed the profit outcome.
The initial market response was sharply negative
The results were filed at 20:30 IST, after market close, and the stock fell 5.00% in the first session after the filing. It underperformed the benchmark by 5.34 percentage points on that session. The next-session return was -9.75%, extending the initial decline.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 |
|---|---|
| Revenue | ₹134 cr |
| Other income | ₹2 cr |
| Expenses | ₹78 cr |
| Operating profit | ₹56 cr |
| Operating margin (%) | 41.90% |
| Interest | ₹3 cr |
| Depreciation | ₹18 cr |
| Profit before tax | ₹36 cr |
| Tax | ₹7 cr |
| Net profit | ₹29 cr |
| EPS (₹) | ₹2.92 |
Operating margin of 41.90% compares with a Information Technology sector median of 15.20% across 92 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -5.00% | -5.34% |
| Next session | -9.75% | — |
| 5 sessions | -26.48% | -24.28% |
Volume on the results session was 0.01× its 20-day average.
What to watch
- Whether operating margin remains near 41.9% in the next reported quarter.
- Whether depreciation stays close to Rs 18.48 cr against operating profit of Rs 56.00 cr.
- Whether other income remains limited relative to profit before tax of Rs 36.47 cr.