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E2E Networks Ltd

| Q4 & FY26 Earnings Conference Call

BULLISH SENTIMENT

Report Source

⬤22nd Apr 26

Summary : E2E Networks reports strong Q4 FY26 growth driven by high AI infrastructure demand and strategic GPU expansion, despite supply chain challenges.

Management Perspective positive : We have had a lot of milestones as a company, met and exceeded that target, market is growing very, very positively, firmly on a path for growth, not worried about numbers.

Concall Report Analysis & Insights

Business Overview

  1. Demonstrated full-stack capability for large-scale GPU clusters.
  2. Successfully monetized GPU infrastructure at a larger scale.
  3. Strengthened technology and talent with deep in-house capabilities.
  4. Improved reliability, performance, and scalability of GPU infrastructure.
  5. Q4 FY26 revenue up 186% YoY, EBITDA margin expanded to 60.7%.

Future Growth Prospects

  1. Future is AI, a decadal story with drastic infrastructure usage increase.
  2. Validated speculative GPU infrastructure investment.
  3. Exploring private credit models for rapid GPU capability expansion.
  4. Cluster 1 B200 1024 expected live mid-May, another 1024 planned.
  5. Strongly positioned for Blackwell, Hopper, B300, GB300, Vera Rubin GPUs.

Management Insights

  1. Strategy validated, targets met/exceeded for Q4 and FY26.
  2. Market is growing positively with high GPU utilization and token demand.
  3. India is becoming a global AI factory, generating vast data.
  4. Q4 FY26 revenue INR956M, EBITDA INR581M, PAT INR64M.
  5. Core business is cash positive, infrastructure investments translating to revenue.

Signs of Skepticism

  1. Management avoids specific MRR guidance due to market dynamism.
  2. Details on asset-light partnership with L&T are still exploratory.
  3. Blackwell GPU deployment faced supply chain delays.

Risk Factors

  1. Global supply chain impacts cause delays in GPU deployment.
  2. Lumpiness in MRR due to current small GPU base.
  3. Rapidly changing market makes long-term guidance difficult.

Good To Know

  1. MOU signed with L&T to monetize GPU infrastructure.
  2. Depreciation period for GPU infrastructure is 6 years.
  3. International revenue was 35-37% of total last quarter.
  4. Majority of current revenue comes from training workloads.

Key Drivers

  1. Booming AI infrastructure demand.
  2. New GPU clusters coming online.
  3. Strong financial performance.
  4. Strategic partnerships expanding.

Key Analyst Discussions

Competitive Environment

  1. GPU demand is strong globally and domestically.
  2. No negative pressure on GPU rental pricing currently.
  3. Technology advancements like Rubin architecture could create pressure.

Market Trends & Consumer Behavior

  1. AI infrastructure usage is increasing drastically worldwide.
  2. Demand for tokens is through the roof.
  3. India is seen as a future AI factory.

Financial Highlights

  1. Q4 FY26 revenue INR956M, up 186% YoY.
  2. EBITDA INR581M, margin 60.7%.
  3. PAT INR64M, positive swing from Q3 loss.
  4. FY26 revenue INR2,456M, up 50% YoY.
  5. FY26 PAT loss INR156M due to GPU depreciation.

Product Composition

  1. GPU contribution to MRR expected to reach 85-90%.
  2. Current overall utilization is 80%+, March 80-85%.
  3. Majority of revenue still from training workloads.

Strategic Considerations

  1. Exploring asset-light models and various financing for GPUs.
  2. Prioritizing India-first for GPU support, then global demand.
  3. Focus on high-value tokens and outcomes, not just asset monetization.
  4. Targeting 6,000 GPU capacity by FY27 as a minimum.