ESDS Software Solution Limited (ESDS) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Q1 FY27 Earnings Conference Call for ESDS Software Solutions Limited, hosted by Systematic Shares and Stocks. As a reminder, all participant clients will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during this conference, please signal for an operator by pressing star followed by zero on your touch-tone telephones. Please note that this conference call is being recorded. I now hand the conference over to Mr. Asi Stas from Systematics. Thank you, and over to you, sir.

Thank you. Good morning, everyone. On behalf of Systematics Group, we welcome you to the 1QFY27 earnings conference call of ESDS Software Solutions Limited. I would like to thank the management for giving us the opportunity to host the call. From the management team, we have with us today Mr. Piyush Samani, Chairman and Managing Director, Mr. Ramaya, Chief Financial Officer, and Mr. Saurav Daga from Account and Finance Team. We will begin the opening remarks by Mr. Piyush Samani to discuss the company's financial and operational performance. Over to you, sir. Hi, good morning, everyone. Thanks for joining us for this call. I am Piyush Samani, founder CEO of ESDS Software. So, we would like to discuss the ESDS Software Solution results for the first call. I am pleased to share that we have delivered another quarter of steady, disciplined growth. Our revenue from operations came in at 133 crore rupees and which has grown by 7.28 per year, while our profit after tri-act has grown by 14 percent, reaching to 3 crore rupees. Our EBITDA stood at 559 million rupees, translating to a healthy margin of 42%. This performance reflects sustained customer demand, deeper engagement across our e-segment, and continued execution discipline across our end-to-end technology ecosystem. Beyond the numbers, this quarter marks several important strategic milestones for ESG. We advance Swaraj Cloud, our AI autonomous sovereign cloud platform built in India, bringing together compute, storage, networking, databases, AI, security, and managed services within a single integrated environment. We also strengthen our product ecosystem with the launch of two new platforms, Swaraj Garuda for application performance, monitoring, and observability, and Swaraj Gattai for database activity monitoring. Our focus remains on converting this investment into sustainable, long-term value for our customers, our shareholders, and the broader ecosystem itself. With that, I'll hand over it to my colleague.

Good morning, everyone.

This is Amir speaking, CFO of ESDA Software Solutions Director. Thank you so much for joining the call. So, as Piyush has spoken about the company broadly, I would like to take you through the revenue and expenses, which is being the main part of our financials. So, revenue is $1336.57 million for the Q1 fiscal year 27, against a revenue of $1245.87 million in the corresponding quarter of the last fiscal year,

Whereas our total income

stands at 1351.71 million in the current quarter, which is Q1 fiscal year 27, against which the corresponding number was 1257.21 million INR. And the total expenses of Q1 fiscal year 27 was 987.04 million. Whereas for the corresponding period last year was Profit before tax is 364.67 million for the Q1 fiscal year 27 whereas the corresponding number was 346.82 million and the total tax expenses is 71.90 million for Q1 fiscal year

27 whereas

the corresponding number was 89.96 million. And our revenue has grown by 7.8% Q1 fiscal year 27, whereas the revenue when compared to Q4 of fiscal year 26 is down by 20.20% primarily because there was design services revenue which we had recorded in one of our services. During Q4 fiscal year, 26. Otherwise, the rest of the numbers are in line, and it is growing steadily, as explained by our managing director, Mr. Kiyos Ramani. Thank you so much for your attention.

Thank you very much. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may enter star followed by one on their touchstone telephones. If you wish to remove yourself from the question queue, you may enter star followed by two. Participants are requested to please use only handsets while asking a question. We will wait for a moment while the question queue assembles. The first question is from the line of Svecha Jain from ANS Wells. Please go ahead.

Hi, sir. Am I audible?

Yes, you are audible. Okay.

Hi, sir. Sorry, my question may sound very basic, but I really want to understand, you know, our different segmental revenue. And if you could help me understand, you know, what exactly we do in each of our segments in simple layman terms, because, you know, we have our own GPU, we have our own cloud, and we also do managed services. So, it's a bit confusing because I think we also have this cross-selling income and all. So, if you could help me understand a bit more in detail, you know, exactly what we do and what kind of margins do we make in each of these segments, you know? That will be very helpful, sir. That is my first question.

Yeah. So, I will first explain to you what all we do. So, we offer three verticals of services to our customers. Infrastructure as a service, software as a service, and managed services. So, in infrastructure as a service, offer cloud infrastructure as a service, or GQ infrastructure as a service, or co-locate the service. So, these are linked to infrastructure. Then in software as a service, we have Swaraj cloud and multiple dozens of softwares that come under Swaraj cloud platform. And in managed services, we give people who manage the customer's cloud environment, customer's AI factory. So anything that has to be managed by people, that all goes under managed services. Now, as a service provider, we give everything combined to our customer. Our preference has always been to give everything combined to the customer so that the customer is fully dependent on us. If the customer comes to us and says that I want only one service and I don't want anything else, then we will not prefer to give service to those customers. We will prefer to give everything combined together. Our profitability is high on software as a service, but now as the growth of AI factories with growth of GQ business, we are seeing more numbers coming from infrastructure as a service and better margins also coming from infrastructure as a service. So we are looking at upwards of 50%.

Service revenue. Infra as a service.

Okay. And then software as a service was 17.35. That's what you said?

17.55%.

Okay. Okay. Okay. And we also have our own GPU, right? So that own GPU, I understand is that our own data centers, right? Good. So when we say that we get revenue from our own GPU, so where does that revenue get billed?

GPU revenue also gets classified under infrastructure as a release. So the GPUs can either be owned by us or the GPUs can be leased through a partner. We will either lease it from a partner or we will buy and deploy those. At the moment, majorly we are leasing those from our partners. And, until now, major number of GPUs have not gone live. So, in Q1, we did not have any GPUs that had gone live.

Okay, okay. And so, what kind of our own GPU capacity we plan to build going forward?

Sizable. We have a sizable number coming up. Yeah, but that, as the new AI factory grow live in the future quarters, Q3, Q4 onwards, So, all those numbers will appear in the future.

Okay. So, I have just one more question, and then I will rejoin the queue. So, just want to understand, sir, you know, we have just put up a notice for postponing our AGM. So, just wanted to understand, sir, you know, just the rationale behind it. And also, just one suggestion, sir, if going forward, if you could put up some quarterly presentation for us to understand these segmental revenues and, you know, any other detail that you can share with the investors. Before the call, it will be very helpful, sir.

Yeah. So, regarding your first question, regarding the annual general maintenance, so what has happened? So, on 4th September, we got listed. Okay. And the list of shareholders that suddenly spiked to almost 190,000 shareholders. Okay. And so, all the arrangements We have to follow the timeline for arranging all this facilities and the annual community. So, we put that for complying all the provisions of the company's act as well as baby regulations, we will seek the extension from the ROC. Accordingly, we have explained the ROC and ROC has came with this act.

Right, right. Okay, sir. No problem, sir. Sir, I'll just rejoin the queue. Thank you so much, sir. Really appreciate this. Thanks.

Thank you. The next question is from the line of Aryan Mehta from Shrava's Capital. Please go ahead.

Hi. Good morning, sir. I wanted to understand the timeline or the update on the Sharon AI deployment. So, I read this article by Greensquare, who's the co-location provider for Sharon AI, that Sharon just on 21st September leased the SYD1 data center for putting up the 8200 chips. So, our target timeline was 16th September, but, I mean, they leased it on 21st September. So, what is the reason for this delay, and when will that capacity come online, and when will we start getting revenue from that delay? Could you explain us that?

Yeah, so there was obviously a delay. So, that September date had got postponed by almost a month, one and a half. So, from Q3 onwards, we will see the revenue coming in from the AI factory in Sydney.

Sir, any month, are you sure? Because, I mean, they just signed the co-location. So, when can we expect November, December of, you know, when the revenue will start?

See, the implementation in the data center, Green Square data center, was going on from last eight months. But because the billing is starting now, so they will be handing over to Sharon AI now. So that is the reason you are seeing that agreement that the billing is starting for Green Square from now onward. Once the billing of Green Square starts, after that also it takes a month's time for the implementation. So, all the racks to come in, the testing to happen. So, we are targeting somewhere early Q1 or mid of Q3.

Q3, got it. And our own GPU capacity, which we also mentioned in the DRHP around 600 to 800, what is the timeline on those? And what are the plans for scaling that up to a higher number?

Yeah, we are scaling up that to a higher number. Target is to touch around 1,500 views. We will be deploying those by Jan or Feb next year, which will be mid of Q4 or end of Q4.

Got it, sir. And my final question is, sir, can more deals like the Share and AI deal come online and will it be similar size, let's say 8,200 or more, maybe 10,000 or more than that?

We are working on multiple deals as and when the deals will close and when customer advances come more contractually signed, we will inform the regulator.

Got it. Then what will be the margin on these type of deals? So, we're leasing it and subject it to a customer, the end customer. What kind of margins can we expect?

We are targeting fat margins in the range of 15 to 20%. So, that's our work for anything less than that.

Got it. Thank you, sir. And all the best.

Thank you. The next question is from the line of Anmolgarh from Dam Capital. Please go ahead.

Yeah, thanks for the opportunity and congratulations on the IFU. A couple of things that I wanted to understand. So particularly for the India business going forward, will the focus will be more towards additions of CPUs or GPUs and particularly if it is GPUs, then do you see sustained demand of GPUs from Indian companies or Indian clients rather than just a pilot sort of?

So, demand from Indian customers is also growing, but compared to the global demand we have with us at the moment, we see Indian demand taking some more time to pick up, and that doesn't matter to us. We are in position to serve global clients from India also. So, as we contract more data center capacities in India, more GPUs from our foreign partners, which can be deployed in India, as the capacity keep on building up, we will initially prefer to offer all of the national customers, and slowly, as India demand also picks up, we will be happy to provide that to Indian customers.

Pish, when can we see GPU-led revenue start for our domestic India business, apart from that international contract?

It has already started, but the numbers are not significant. Big numbers will come as we progress from here, as we continue to grow from here. We will see the numbers from Indian customers also coming in. Our initial preference is international customers because they are ready to give more price also. There is desperation in international customers to get the GPU services, so we are happy to provide services to them. They are good paymasters, giving 12 to 18 months of advances also, so preference is to initially offer to whoever gives us better margins and makes more down payment also.

Understood, understood.

And also, any kind of order book that you want to highlight for our, again, domestic business at this point?

Domestic business, we've got around 3,000 crore of an order book, because international is much larger than that.

Understood. And what would be the duration of this order book?

Duration of the order book is 3 years.

Understood. Understood. So, from that perspective, just from the domestic business, if you can give us any sort of guidance for the full year, like for FY27 and FY28, that would be really good.

Yeah, so we are not supposed to be giving any kind of guidance for full year. So, as the numbers will come, we will be disclosing the actual numbers every quarter on quarter.

Sure. Thanks, Vish, for answering your question.

Thanks, Anmol.

Thank you. The next question is from the line of Devi Agrawal from FICOM Family Office. Please go ahead.

Yeah, hi, sir. Am I audible?

Yes.

Yeah, hi, sir. Thanks for taking my question. Sir, firstly, I just wanted to know on a subsidiary SPOC Hub, so I guess we had recorded a revenue of around 85 crores and a pet of 54 crores in FY26 versus almost a real revenue for FY25. So, could you explain the nature of this FY26 revenue?

Yes, so as Ram also mentioned in his opening remarks, so this FY26 revenue was regarding the technical design services which we provided to our customer regarding the GPU which we are building at Sharon AI Pactyl.

So, we designed the entire cluster for them and that's why our milestone was

completed in FY26 and that was taken care by employees in our subsidiary company.

Got it. So, this is like one time, this won't be recurring, right?

Right, right.

Now, the GQ revenue is only from Q3. Got it. Secondly, just wanted to know on the advance that we have received around 1100-1200 crores from a particular company. So, what is the expected execution timeline for that order? And are there any similar advances or orders in the pipeline?

So, again, the advance pertains to the same order which will go like from Q3 F527 and advance will get amortized over a period of contract on monthly basis.

Got it and this is related to the share and EID only, right? And, yeah, so, next is the last issue of the managed services revenue. So, it increased like around 157% year on year to around 76 crores. So, what was the primary drivers for that?

So, again, same because as Piyush mentioned earlier, whatever is done by our employees is classified under managed services.

Okay. So, the revenue would be increasing from here on? Is this the right understanding?

So, the 26 increase was primarily because of technical design service which we classified under managed services.

Now, the shift would be towards IIS revenue.

Okay. Okay. Got it. Thanks. Thanks a lot. Thank you.

Thank you. The next question is from the line of Sudhir Beda from Beda Family Office. Please go ahead.

Yeah. Hi, PSD. Congratulations for your major idea. Sir, just wanted to ask as a layman, as a financial person, I don't understand much of technical. So, can you throw some more light on share on AI deal? How many GPUs you will rent? And what would be the per GPU revenue? So, by FY27, what would be the revenue from share on AI for this financial year and maybe next financial year? How many GPUs would employ, the more you would employ for Sharon, and what could be the revenue? And what are the, see, you have stated the order booth of local GPU is around 1,000 crores. So what is the order booth abroad, if you can throw some right on that?

Yeah, thanks, David, right. So for the Sharon AI GPUs, I would like to put this by bit of Q3. So, the revenue will be booked over there and you can actually check the industry standards also at what price the GPUs are coming in. So, these are the latest advanced B300 GPUs which are being deployed in the AI factory at City and 8,000 GPUs, 8,200.

And the new orders which are, you are going to sign or maybe you have indicated that very big orders are coming. So please throw some light on that. What kind of the price and it is the same $5 or how it will work for the other people apart from share-on?

Yeah. So the new setup that we are doing, very small quantity lending and a target we will be buying at the...

Okay, so do you expect rates to go up? Because there were some rumors that rates are falling. So, it is not the case, right?

Continuously going up. Next three to five years, it is a demand. Everything has become...

Great, great. So, nice of you. Thank you very much for the opportunity given to me, and all the best. Thank you, Siddhartha.

Thank you. The next question is from the line of Yash from Aweera. Please go ahead.

Hello. Thank you, sir, for the opportunity, and congratulations on the great listing. Sir, one thing is, when we say about the international pipeline, similar to, you know, the Sharon 8200 GPU deal, so how big is the pipeline in terms of, you know, number of GPUs, if you can throw some light, and whether the GPUs, like you said, there is a shortage. So, do we have enough, you know, capacity of GPUs to serve that pipeline?

Yes. So, yes, thanks. Wonderful question. We have a strong funnel of more than 50,000 GPUs right now. And we are trying to figure out how we will deliver that from where all locations, which are locations, we will deliver the pipeline. Customers are waiting for the supply to happen, so we just need to get back to each of our customers. Our target is to block the capacity before the price goes up by 25% and then leave that capacity after the price goes up.

Understood, sir. And sir, with respect to the 1500 GPUs that you spoke about, so if I have heard it correctly, Those will be deployed by Q4 of FY27, the current financial year, correct? Okay. And, sir, with respect to the domestic order book, so how do you see that shaping? International order book is anyway strong. What about the domestic order book?

Domestic, currently, we are seeing a cager of 30 to 40%. Okay.

Understood. Thanks. That's it for my side. Thanks. Thank you.

Thank you. The next question is from the line of Kunal Bajaj from Choice Institutional Equities. Please go ahead.

Yeah, good morning. Thanks for the opportunity and congratulations to the team on the strong listing. So, I have a couple of questions. Firstly, starting with the consolidated revenue have declined on a quarterly basis. This is broadly on the factor of the subsidiary level weakness. So, how much is it a one-off or a structural thing? Because you mentioned earlier that there was technical billing which was there. So, was it related to the Sharanei deal? That is one. And apart from that, so with Sharanei deal, you mentioned that earlier it was supposed to be operational by October 1st week. So, now is it safe to say that we can start from November 1st half or are we seeing much more delays after that?

Yeah, yeah, yeah, that's right. So, we are expecting that to go live by November 1st week.

Also, if you can share some color on the European banking client who has taken the entire load of the Sharanei capacity. So what is the nature of work they plan to do? Because this is very high compute capacity. So what is the level of and what is the nature of the work are they concerned for this?

No, so we have not mentioned who is the client. Generally, when an AI lab or any kind of enterprise customer takes a complete workload, they will try to develop some model and provide

a timeline that we maintain internally as to when we can have the capacity which we are building out of for the IPO proceeds to be operational.

So that will go live, as mentioned in the previous answer also, that the capacity will go live by two cores. of the current year.

And the billing we can expect from QPOD itself or Q1, FI28?

We would start on Q1.

Okay. And lastly, one more thing. So, any broad outlook on FI27 and FI28 in terms of revenue and profitability?

No, we cannot give any forward-looking numbers. So, that is not yet, like company is not planned to.

Okay, thank you so much for all the best.

Thank you. The next question is from the line of Zaksh Manikshana from Ambit PMS. Please go ahead.

Hello. Hi, thank you for the opportunity. Basically, the one thing, first thing I wanted to understand is, of the international pipeline, what is the client mix, where is it coming from? So, is it from the US and Europe primarily, or did you cater to China as well?

So, we actually, when we get a demand from our customers, we discuss that with our NVIDIA counterparts also. They have to approve. Once they approve, then we deploy. It's a process which we rigorously follow and post their approval only, off-taker approval of them.

No, that's fair. I mean, right now, but NVIDIA is allowing even Indians to rent out to China. I think why I'm asking this question is for future risk of client concentration, because right now the Chinese are the ones who are looking for the GPUs very aggressively, and US has its own domestic capacity. And so as an Indian company, I think it would be important to understand, you know, what are the geopolitical risks with a Chinese client customer base. And if you all are more concentrated with US and Europe, that's great. But I just wanted to maybe understand, do you all cater to China as well?

We actually focus on collecting maximum advance from the customer, and this is an appreciating asset. This is no longer a depreciating commodity. So, even if a customer who has paid you 15-18 months of advance, if that customer walks out, you have another customer ready to pay you a higher price and take over that customer, and again, they are ready to give you more advance. So, that's why we don't see client concentration as well.

Okay, and so then my follow-up to that would be that Nvidia within the last, well, 15 months has already launched the B200s, B300s, and we're going to see the Rubin GPUs also launch soon. And so, from that perspective, do you still feel that it's going to continue being an appreciating asset or eventually is it going to get commoditized?

So, B200s have completed more than two years and they are also appreciating as of now. Same is with B300, GB300. So, the price at which we lease from Sharon AI, the current market price is around double of that. So, G300, GP300 are appreciating, and when Vera Rubin comes in, Vera Rubin will also continue to appreciate. What happens is that once a certain kind of company or certain kind of AI lab will get out of a certain kind of a GPU, let's say GP300, they will stop using after three years. Then the gaming companies, the e-commerce companies, they will have demand for it. They will use it for another three years, four years. So, the demand continues in a different customer segment and the use case because of the CUDA framework of NVIDIA. CUDA has ensured that the older GPUs continue to give you a far better performance in the future also. That allows the NVIDIA GPUs to appreciate year on year. It's not like an iPhone which becomes slow after 4-5 years. It continues to become faster and faster.

Okay, that makes sense. And just a final question on this one is that Dior decide to increase CapEx into more GPUs on demand or Dior first decide we're going to bring in these many GPUs and then look for demand?

We initially, we were conservative. We were not ready to take much risk initially. That's the reason we got customers first and then got the capacity. Moving forward, we will build capacity also through our partners, through our own capital. We will build capacity and as we go closer to the RFS date, that is when we will contract it. If you are tracking Navy's in the U.S., they build the capacity and just 30 days before the RFS, they make an auction. So, they auction the capacity and they demand $8, $9 also from those.

And are you building any infrastructure outside the country as well, or is all of the infrastructure primarily going to be built in India?

No, it will be a mix of both. We will build international as well. Wherever, whichever countries we are getting power, green power, clean power, we are going to those countries and we will be partnering with local companies there, building data centers there, and India also will be doing the same.

Okay, great. Thank you so much. What you all are doing is very important for the country, I feel. So, thank you so much for this opportunity.

Thank you.

The next question is from the line of Vedan Sarda from Nirmal Bank Securities. Please go ahead. Yes, Vedan, sir. Please proceed.

Am I audible? Yes, Vedan. Yes, you are. Thank you for the opportunity. Just want a clarification on the Sheron AI deal. Like, you have logged in Sheron GPUs. So, similarly, you have logged in the revenue contract from the customer. So, though your GPU prices are going to rise, but your revenue will also be fixed at the pre-decided rate. Am I right in the understanding? Okay. And if I'm not wrong, just you told that the older GPUs are performing better. Like, they're not like an iPhone, where their performance goes down. So, but obviously after 4-5 years, our GPU will not be performing as better as the latest technologies GPU or the new GPUs. Can you tell something about that?

So, CUDA platform of NVIDIA is and the demand for Ramstick, if you read my LinkedIn post in the last couple of weeks, I mentioned that eight months back, we were able to buy three kg of Ramstick from one kg of gold. Then, it came down to 1 kg of ramstick from 1 kg of gold, and today, we are sitting at 400 grams of plastic ramstick in 1 kg of gold. So, that is, you can understand, if plastic is becoming more expensive, plastic and silicon is becoming more expensive than gold, what would be the demand in the market?

No, sir, I am understanding that prices should be going up. Like, current market price of GPU is 100 days. That can go to 200, 300. I am talking about the performance of the GPUs. After 5-6 years, we will have to buy again GPUs of latest technology to resume the services, that was my question.

So, A100 and H100, which are very, very old, even today, the customer is paying 3.5 dollars for that. The price at which we lost the B300, the same price is being demanded by H100, and we have a regularly reaching out...

is from the line of Ravi Mehta from OneUp. Please go ahead.

Yeah, hi. Thanks for this call. Just one small clarification.

When I look at the revenues of quarter one, it appears to be like, you know, 7-8% growth on a YOY basis. But we hear that, you know, your order book is growing faster at 30-30%. So, when we, why is this Disconnect if you can explain, or is there any seasonality in the business?

Yeah, there is seasonality. Q4 is always a stronger, forward, we will prefer to do a monthly billing.

Okay, and on why do I grow, can we think, like, clearly, in the Q1 revenue, the revenues are up 7-8%, so, why is that? You just mentioned, generally, Q1, 8-4.

Thanks, all the time.

Your question is from the line of Sandeep Agarwal from Naredi Investments. Please go ahead. Mr. Sandeep Agarwal, your line is unmuted. Please ask your question.

Hello. Thank you for the opportunity. My question is, as we've seen that there is such a huge demand for the GPU globally, that capacity are booked for the next few years. Why is it that a company like Charon is not directly leasing its capacities to the end user and has to find a route to us? Also, do you see any risk of not a level of lease contact after 5 years period?

Yeah, so Sandeep Bhai, we have locked Sharon for 7 years. Our rates are already like discovered with them. And if you read the contact that we have done with Sharon, our plan is locked for 7 years. This AI factory which they are setting up is for us for 7 years. After the deal that happened between ESBS and Sharon AIF, They have closed at least 10 more such AI factories, and they are sitting on a massive, like, billions of dollars of cash, and obviously they have, like, a projection which is much, much higher than ESDS. So, Sharon AI has also leased to direct customers, and now they are demanding, like, 50-50% of contract amount as advanced from the customers. So, they are also doing exceptionally well now. But, our deal with them was the first one, and that is where we managed to get a wonderful deal from them.

Okay, the next question is, with the spot rate of the GPU increasing constantly, do we see any, do we see our deal rate for the new deals to be rising, and also what impact this shall have an hour costing for the getting the GPU's capacity and alternatively, or margin?

Sorry, Sandeep, you will have to repeat your question in between, we lost your audio because of a problem on R&M.

Okay. Just with the spot rate for GPU increasing constantly, as per you provided the data, do we see our deal rate for the new deals to be rising? And also what impact this shall have on our costing for getting the GPU capacity?

Thank you. So, we have to carefully handle the entire ecosystem to ensure that we continue to get supply.

Okay. And the last one, are we eligible for any CapEx subsidized under any scheme like PLI or something? Okay. Then, sir, just a question in my mind. Like, sir, currently, what is our employee strength?

993.

Any addition due to this deal?

Yes, there will be an addition of close to 100 more people because of this deal. But we will also have some churn, voluntary and involuntary churn also. So, we don't expect the people count to go beyond 1000.

Okay, so can we just, we take like this, as we increase our capacity, or we do sign extra deals regarding this, our employee strength not expand accordingly?

We don't intend to increase employees too much. Obviously, some senior level people, expensive CXOs may come in the company that will probably increase the salary component a little bit, but we don't expect people count to go up. We are also, wherever we are partnering, we are telling the partners also to put their employees in the project, and the entire AI factory would come from the partner. People may also come from the partner. Plan is to keep people cost as low as possible.

Okay. Thank you.

Thank you. The next question is from the line of Nukur Kogta from NIPL. Please go ahead.

Hello, sir. Thank you for the opportunity. In continuation of the previous participant's question, I wish to know that you told that Sharon is now also directly leading its capacities further. So, do we see a risk of like a non-general of our lease contracts going further after a period of seven years or with some new lease? Do we see a similar risk?

So, after seven years, we don't know what will happen. Whether our client will continue with us or not, we don't know. But, yeah, seven years, we have a clarity that this highly premium capacity is there with us. And after seven years also, we will negotiate with them whatever would be the market rate. On that basis, we will negotiate and try to continue the AI factory. We have wonderful relationship with Sharon AI management. And we believe in a 1 plus 1 equals to 11 kind of partnership. They appreciate our partnership. We appreciate their partnership. And they are getting an opportunity right now to make money from newer orders. So we are happy that our partner is growing.

And my second question is, like, for the upcoming GPU capacity which we are planning in India, would the GPU availability be a constant?

It is already constant. There is a delivery timeline delay of four months, six months, nine months also. So, we are leveraging our relationships to get the deliveries expedited.

Okay, okay.

All right, that's all for myself. Thank you. Thank you. The next question is from the line of Aryan Doshi from Divite Investments. Please go ahead.

Yeah, am I audible? Yes, Aryan. Yeah, I just wanted to ask that, you know, in RHP, it's mentioned that our business is not seasonal in nature, right? So, was the stronger Q4, you know, mainly because of the 75 crore from the new overseas customer, and excluding that customer, how did the core business grow in Q1?

So, we had a growth in the core business also. If you will see the financials of FY26, you will see that year on year, there was a growth in the core business also. But because this was a massive AI factory design and complete architecture of the AI factory that had to be done by our team, so that's the reason there was this one-time managed services revenue came from the same customer.

Okay, so core business grew, you are saying?

Yeah.

Okay.

And we are sitting like on the 1177 crore customer advance, right?

Fy27, we are targeting to conclude around 1,500 crores of capex and additional 1,500, whatever has happened, I exactly don't have the numbers in front of me right now, but we will be doing additional 1,500 crores of capex in Fy27.

So, from the customer advance and the IPO proceeds, right? Customer advance, IPO proceeds, and partial debt. Partial debt. Okay. Okay. Thank you so much. Thank you so much. Thanks, Arya.

Thank you. Ladies and gentlemen, we take that as the last question. I now hand the conference over to Mr. Prasad Deokar for closing comments.

Thank you. Thank you. Thank you once again to everyone on this call. So before we conclude, I would also like to place a few points on the record for the benefit of all participants. So I would like to inform everyone that certain statements made during this call, including those by our managing director or by our finance team regarding our business outlook or strategic plans or any forward-looking statements, actual results that may differ from those expressed or implied in such statements. The company also undertakes no obligation to publicly update or revise any forward-looking statements, except as required under the applicable law. Further, I would also like to confirm that the financial results discussed today are the unaudited, consolidated, and standalone financial results for the quarter-end date 28 June 2026, as reviewed and taken on record in accordance with the applicable provisions of the Companies Act and CBLOD Act. A detailed result has been filed with the stock exchanges and are also available on the company's website. So, we thank all our shareholders, analysts, and investors for their continued trust and for taking the time to join us today. Thank you, everyone.

Thank you very much, sir. On behalf of Systematic Shares and Stocks, that concludes this conference call. Thank you all for joining us, and you may now disconnect your lines. Thank you.

Thank you.

Thank you.