With a market capitalization of Rs. 4,852 crores, the shares of the smallcap IT stock started Wednesday’s trading session on a higher note at Rs. 3,349.05, locking a 5 percent upper circuit compared to its previous close of Rs. 3,189.60 apiece.
Financials:
Looking at E2E Networks Ltd’s financial statements, the revenue surged by 41 percent from Rs. 29 crores during the March quarter to Rs. 41 crores in the June quarter. In addition, the net profits magnified by 150 percent from Rs. 4 crores to Rs. 10 crores during the same period.
Comparing the same metrics on a YoY basis, the revenue zoomed by around 116 percent from Rs. 19 crores during Q1FY24 to Rs. 41 crores in Q1FY25. On the other hand, the net profits jumped by around 43 percent from Rs. 7 crores to Rs. 10 crores during the same timeframe.
Shareholding Pattern:
According to the NSE shareholding pattern, Ace Investor Mr Ashish Kacholia acquired around 1.77 lakh equity shares, representing a 1.05 percent stake in the company, in September 2024.
At the same time, Foreign Institutional Investors (FIIs) raised their stake from 1.28 percent in Q1 FY25 to 3.33 percent in Q2 FY25, an increase of 2.05 percent. Additionally, Domestic Institutional Investors (DIIs) hold a 4.24 percent stake in the company.
Recent Development:
Recently, E2E Networks Ltd successfully raised Rs. 420.51 crores (approximately USD 51 million) through a strategic investment round. This funding was achieved via a preferential issue of equity shares, with the company offering 2,481,592 shares at an issue price of Rs. 1,694.50 each.
The funds will support the development of advanced cloud infrastructure, particularly next-generation cloud GPUs and GPU clusters, which are essential for powering AI and machine learning applications.
Furthermore, E2E Networks aims to bolster its capabilities in supporting enterprises, startups, public sector entities, and research institutions as they adopt AI technologies. This includes enhancing its TIR platform, a low-code AI development tool that facilitates the creation, training, and deployment of AI models.
Market Positioning:
E2E Networks is positioning itself as a leader in the AI-focused hyperscale cloud market. They have been proactive in launching advanced cloud GPU offerings, including the latest NVIDIA H100s, which they introduced in November 2023. This first-mover advantage in the Indian market is expected to bolster their competitive edge.
The company has established partnerships with major tech players like NVIDIA, AMD, and Microsoft, which will facilitate access to cutting-edge technology and enhance their service offerings.
Future Outlook:
E2E Networks aims to broaden its service portfolio to cater to a diverse clientele, including startups, enterprises, and government bodies. This includes developing cloud-native services and enhancing their platform’s capabilities to support a wider array of computing workloads.
Furthermore, for FY25, the company has planned a CAPEX of around USD 100 billion or about Rs. 800 crores over the next 12 months.
The company has introduced cutting-edge cloud GPUs and AI/ML platforms specifically tailored for the Indian market. In Q3FY24, it initiated the deployment of the latest-generation Cloud GPUs, including H100, L40s, and L4.
Moreover, E2E Networks plans to enhance its data centre capacity at a newly launched facility obtained from one of its vendors. The expansion will increase capacity from 1,000 KW to 4,200 KW over a span of 7 years.
Important Financial Ratios:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 30.86 percent and a return on capital employed (RoCE) of 17.07 percent for the period spanning FY23-24. Additionally, during the same timeframe, the net profit margin stood at 23.14 percent.
Company Profile:
E2E Networks is an Nse-listed AI-focused hyper-scale cloud platform, offering advanced cloud GPUs and a comprehensive ecosystem of cloud technologies designed for the development and deployment of AI/ML applications.
Written By Vaibhav Patil
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