Founded in 2005 by first generation entrepreneur Piyush Somani, ESDS was initially conceived as an Outsourced Hosting Support company Later it transformed into a web hosting business in the US and UK. Since then, ESDS has moved from strength to strength, establishing a huge clientele worldwide. In a relatively short period of existence, innovative & disruptive solutions has put the Company in the league of competitors like AWS, Microsoft Azure, CtrlS, Sify, Alibaba, Netmagic, NextGen and Rackspace. ESDS has expertise in Managed Data Center Services, Cloud Solutions and Disaster Recovery Hosting.

All ESDS Services are backed with exuberant Technical Support helping ESDS in strengthening its relationship with customers. It has established a strong presence in almost every industry vertical – BFSI, Healthcare, Education, Energy & Utilities, Agriculture, Manufacturing, IT, Entertainment & Media, Travel & Tourism, Telecom, Government and eCommerce. Presently it has its footprint in 19 nations across APAC, Europe, Middle East, the Americas, and Africa.

Special Achievements of ESDS

a. 1st Indian Cloud Company to have Vertical Auto-Scaling Patent.

b. 1st Commercial Datacenter to have an active Uptime Tier III Certificate.

c. 1st Indian Cloud Company to have a Patent in Cloud & Infrastructure Hosting Space.

d. India’s Only Cloud & Data Center Company to have 50+ R&D engineers.

The Business Model of ESDS can be broadly divided in two categories.

a. Managed Cloud Hosting

b. Managed Data Centre

Products and Services of ESDS

a. eNlight Cloud is a Software Solution to convert CAPEX into OPEX by eliminating expensive hardware cost, maintenance cost and obsoleting of traditional IT infrastructure into cloud computing. eNlight Cloud is India’s first and only cloud computing platform patented from USPTO (Patent no. 9176788) and UK (Patent No. : GB2493812) for “Method and system for Real Time Detection Of Resource Requirement And Automatic Adjustments”. It is state-of-the-art cloud hosting solution with built-in ability to automatically scale CPU and RAM on-demand without any human intervention or downtime.

The auto-scalable feature of eNlight has succeeded in eliminating the downtime which is generally seen as a result of volatile internet traffic. Thus feature also makes eNlight an unsurpassed proposition for Disaster Recovery hosting with cost saving of up to 70%.



b. eNight-360  

c. Data centre services

ESDS provides dedicated hosting service or managed hosting service for Internet hosting in which the client leases an entire server instead of sharing. It also provides services such as Colocation services, Static VM/VP hosting and disaster recovery hosting.

Data Centres of ESDS

(i) Nashik Data Center -Phase 1 - 100% occupied

(ii) Mumbai Data Center - Phase 1- 100% occupied

(iii) Bangalore Data Center - 10% occupied

(iv) Nashik Data Center - Phase 2 - 3% occupied Soon new data centres are coming at Bahrain and other places in India.

d. E-magic DCIM

eMagic DCIM is a highly integrated and composite solution that provides a single console for management of Data Center operations. It facilitates streamlining of administration process, leading to optimization of functional operations. eMagic DCIM is a highly regarded Enterprise Data Center Management Solution, which is currently installed and successfully running on-site operation for customers like Reliance Capital, ABB Group, CDSL, Satara DCCB and some new acquisitions like the DCB Bank.

 

Clients of ESDS

a. Provides complete managed hosting for CBS, ATM Card Solution, Mobile Banking, Net Banking, IMPS, UPI Payments, Bharat Billpay, etc. ESDS currently hosts more than 220 co-operative Banks on eNlight Cloud hosting platform and more than 350 websites of nationalized PSU.

b. ESDS has emerged as one of the top players in past 12 months for hosting SAP HANA deployment of some of the large Enterprises and well known brands in India. More than 50% of the SAP HANA hosting on Cloud have been won by ESDS in India in last 1 year.

c. Some of the largest matrimonial portals in India, eCommerce portals and all the major initiatives taken by the PMO like the MUDRA Bank, Startup India and Standup India have all been designed, developed and hosted by ESDS on the eNlight Cloud platform. Under Mudra Scheme, 200M loan disbursed by Government of India from ESDS platform.

Why ESDS?

a. India’s Most Trusted Cloud Service Provider

b. Provide most innovative technologies.

c. ESDS provides a wide range of products and services. eNlight 360°, eMagic are products, while iPAS & VTMScan are the SaaS offerings of ESDS

d. ESDS is trusted by customers across all verticals. ESDS is proud to serve customers of different industries ranging from Banks, Government, IT, Telecommunication, Defense, Manufacturing and others

Mission for 2024 for ESDS

a. By 2024, ESDS will connect 1 Billion devices across India for enhanced functionability and connectivity.

b. 380+ banking customers would be connected.

c. 150k POS devices to be connected.

d. 25k ATM Machines to be connected.

e. 900K Card Transactions to be completed.

f. 30+ Smart Cities + IoT projects ~2M devices to be connected in this.

Company Investor Presentation 

ESDS Unlisted Share Fy22-23 Review

1. Revenue and Operational Costs

While the revenue saw a moderate increase from INR 195 crores in FY 2022 to INR 205 crores in FY 2023, the operational costs have surged significantly. Employee benefit expenses alone rose by INR 7 crores, and other operational expenses increased by INR 18 crores. This increment in operational costs has resulted in a 7% dip in EBITDA margins, a significant pressure point for the company.

2. Debt and Interest Costs

The company's total debt has escalated to approximately INR 136 crores in FY 2023, from INR 110 crores in the previous fiscal year. Subsequently, the interest cost has also surged from INR 17 crores to INR 25 crores, raising concerns about the company's debt management.

3. Silver Lining

Despite the operational challenges, the company managed to generate cash from operations of approximately INR 54 crores, an increase from INR 31 crores in FY 2022. This uptick is primarily due to high Depreciation and Amortization (D&A) which is a non-cash item, suggesting underlying operational strength.

4. New Launches and Customer Relationships

ESDS has expanded its footprint by launching new Data Centres in Mohali and has plans for one in Navi Mumbai in H1FY24. The company has also strengthened its relationship with existing customers like L&T, EDF, and Tech Mahindra, who have scaled up their businesses significantly with ESDS.

5. Revenue Recognition and New Orders

Several new projects and contracts have been bagged, projecting a promising revenue stream for the upcoming fiscal years. The Mohali Data Centre alone has secured an order worth INR 25.40 crores, indicating robust revenue recognition in the near future.

ESDS Unlisted Share Annual Report 2022 Update

1. There is an increase in 14% revenue in FY22 as compared to Fy21. However, the last 5 years CAGR from 2017 to 2021 was 25%. So, muted growth in Fy22.

2. Despite increase in revenue the operating profit is down by 5% in Fy22 as compared to Fy21.

3. ESDS unlisted share has posted a loss of 2.60 Crores in Fy22 from a profit of 5.40 Crores in Fy21.

4.ESDS despite posting losses has made a cash flow from operations of 26 Crores, because they have 42 Crores of depreciation on assets.

5. Free cash flow is negative as in FY22 they have done a capex of 60 Crores, and cash flow from operations is just 26 Crores. So, to fund that capex, they have raised funds via following ways a) 20 Crores from preference shares

b) 30 Crores from NCDs c) Increased current borrowing by 42 Crores. So, in net they have raised ~75 Crores from financing in Fy22.

6. Trade receivables have gone up from 46 Crores in Fy21 to 63 Crores in Fy22. Poor results posted by ESDS Unlisted share in Financial year 2022.

Valuation of ESDS Unlisted Share

The total share outstanding after the conversion of preference shares as on 31.03.2023 are ~9.28 Crores.

At CMP of 250, the Mcap or valuation comes out to be ~2200 Crores which looks on higher side.