E2E Networks Limited — Q3 FY26 earnings call

Call held 16 Jan 2026

Management summary

E2E Networks delivered a strong Q3 FY26, marked by robust revenue and EBITDA growth, driven by increased capacity utilization and traction from strategic and government contracts. Despite a reported PAT loss due to higher depreciation from new GPU commissioning, the company is on track with its Blackwell GPU deployments and remains confident in achieving its MRR targets. The Jarvis Labs acquisition positions E2E for global expansion, while the focus on sovereign AI and enterprise clients continues to drive strategic growth.

Highlights

  • Operational revenue stood at INR 70 crores, growing 68.3% YoY and 59.8% QoQ.

  • EBITDA reached INR 39.6 crores, up 60.9% YoY and 120.2% QoQ, with a margin of 56.6%.

  • Reported a PAT loss of INR 5.7 crores, but PAT improved by 58% QoQ.

  • Monthly Recurring Revenue (MRR) touched INR 28 crores in December 2025.

  • Target to achieve INR 35-40 crores MRR by March 2026 remains in place.

  • 1,024 B200 Blackwell GPUs received, with deployment expected in Q4 FY26.

  • Blackwell series capex is in the range of INR 600-650 crores.

  • Target utilization rate of 80-90% for next financial year (FY27).

Key financials

  1. Operational Revenue ₹70 Cr +68.3%YoY
  2. EBITDA ₹39.6 Cr +60.9%YoY
  3. EBITDA Margin 56.6%
  4. PAT ₹-5.7 Cr +58%QoQ
  5. MRR (Dec 2025) ₹28 Cr

What they filed

Q1 FY27: revenue up 336.1%, net profit up 1566.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue48 42 33 36 44 −8%70 +67%96 +191%157 +336%
EBITDA31 25 13 11 18 −42%40 +60%58 +346%118 +973%
Net profit12 12 14 -3 -13 −208%-6 −150%6 −57%44 +1567%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Revenue

  • Monthly Recurring Revenue (MRR) Revenue · March 2026 · High confidence INR 35-40 crores
    And we continue to hold our target of being able to hit somewhere close to INR35 crores to INR40 crores of MRR around March 2026 or thereabouts.

    — Tarun Dua, Managing Director

  • Annual Recurring Revenue (ARR) from 1,024 Blackwell GPUs Revenue · Per year (once fully deployed) · Medium confidence INR 250 crores
    From an ARR perspective, we are looking at somewhere close to maybe about INR250-odd crores per year or so with 1,024 Blackwell.

    — Tarun Dua, Managing Director

  • Annual Recurring Revenue (ARR) from 1,024 GPUs Revenue · Not specified · Medium confidence INR 245-250 crores
    See, we are basing the projection of the ARR capability from those 1,024 GPUs based on a bottom price. So I think that bottom number would be somewhere anywhere between, say, INR245 crores to INR250-odd crores groups on an ARR basis?

    — Tarun Dua, Managing Director

Capacity

  • Blackwell GPU Go-Live Capacity · Q4 FY26 · Medium confidence Before end of Q4 FY26
    So we are expecting in the -- hopefully, before the end of Q4, we should be able to go live with the Blackwell that we have already procured, and we continue to expand the Blackwell capacity.

    — Tarun Dua, Managing Director

  • B200 GPU Deployment Completion Capacity · Q4 FY26 · Medium confidence Q4 FY26
    We have already received in our Chennai location 1,024 B200 GPUs. And we are in the process of deploying those. And hopefully, in the Q4 itself, we expect to see the deployment completed and then we can start seeing some action and traction in terms of orders coming in from various stages.

    — Tarun Dua, Managing Director

  • Utilization Rate Capacity · Next financial year (FY27) · Medium confidence 80-90%

    From 60-65% today

    So we continue to target somewhere between 80% to 90% of the utilization to be done at some point of time in the -- in the course of the next financial year.

    — Tarun Dua, Managing Director

Capex

  • Blackwell Series Capex Capex · Implied for current deployment · High confidence INR 600-650 crores
    So for the Blackwell series, roughly the capex would be in the range of INR600 crores to INR650 crores, part of which is funded through a term loan, which would we have taken from the Axis and HDFC Bank.

    — Nitin Jain, Chief Financial Officer

Profitability

  • EBITDA Margin Profitability · Not specified · Medium confidence Closer to 70%

    From 55-60% today

    I think quarter-on-quarter now, we have expanded the EBITDA margins. And I think it's a matter of establishing the scale at which point we will be able to hit the expected number as per the business, which is closer to 70 than closer to 55 to 60 today.

    — Tarun Dua, Managing Director

  • EBITDA Margin Profitability · Next quarter (Q4 FY26) · Medium confidence ~70%
    We are definitely hoping for that.

    — Tarun Dua, Managing Director

  • Incremental EBITDA Margin for new GPUs Profitability · Not specified · High confidence 75-80%
    No. From an overall perspective, the additional EBITDA for the new GPU would tend to around 75% to 80%. So there is a very good headroom across in terms of with a small capacity utilization. They would be breaking even at EBITDA levels.

    — Nitin Jain, Chief Financial Officer

Risks & concerns

  • Mumbai server outage and potential client loss

    medium

    A major outage occurred in December, but management stated Mumbai was a smaller location and customers were being migrated, with investments in site reliability engineering.

    Analyst downplayed

  • GPU memory price increase impacting GPU price points

    low

    Management acknowledged potential impacts but views it as cyclical, expecting prices to balance out over time, and does not foresee a long-term impact.

    Analyst acknowledged

  • GPU supply/demand shortage due to increased global demand

    low

    Management expects full support from partners and sees a lot of demand acceleration, indicating they are confident in managing supply.

    Analyst acknowledged

Areas of evasion (2)

  • Future capex guidance for FY27/FY28
  • Specific timeline for achieving target ROE

Q&A highlights

1 direct, 1 evasive
Mumbai server outage and client impact Partial
From an impact point of view, I think over a period of time, it will become clear what is the impact we are seeing. But as I said earlier that this was a substantially smaller location overall for our infrastructure.

Analyst questioned a significant service disruption, and management acknowledged it but downplayed its material impact, stating it was a smaller location and migration was planned.

Asked by Varun Gandhi

Adoption of ASICs vs. NVIDIA exclusivity Direct
So in the near future, I again continue to see that basically NVIDIA will be majority of our portfolio, a vast majority of our portfolio. And that is based on the inputs that we continue to get from our customers.

This question addresses a key strategic choice regarding hardware vendors and potential future capex/ROIC implications, with management confirming a continued NVIDIA focus driven by customer demand.

Asked by Varun Gandhi

Useful life of GPU assets and target Return on Equity (ROE) Evasive
I guess look back is better than me saying when do we achieve it? So let's get to it and then we look back and say, yes, it has been done or not.

While management provided a useful life expectation (7-8 years) and a broad ROE target (>20%), they explicitly dodged providing a timeline for achieving this ROE, which is crucial for investor planning.

Asked by Nikhil Kothari

2 min read 6 chapters

Detailed narrative

Strong Q3 FY26 Financial Performance

E2E Networks reported robust operational revenue of INR 70 crores for Q3 FY26, demonstrating a significant 68.3% year-on-year and 59.8% quarter-on-quarter growth. EBITDA for the quarter stood at INR 39.6 crores, increasing by 60.9% YoY and 120.2% QoQ, with an impressive EBITDA margin of 56.6%. Despite reporting a PAT loss of INR 5.7 crores, profitability improved by 58% QoQ, primarily attributed to higher depreciation of INR 47.6 crores resulting from the commissioning of large GPUs in FY25 and FY26.

Blackwell GPU Deployment and Revenue Potential

The company has made significant progress in its Blackwell GPU strategy, having already received 1,024 B200 Blackwell GPUs at its Chennai facility. Deployment of these GPUs is expected to be completed in Q4 FY26, with management anticipating new orders and traction. The capital expenditure for this Blackwell series is estimated to be in the range of INR 600-650 crores. These 1,024 Blackwell GPUs are projected to generate an Annual Recurring Revenue (ARR) of approximately INR 245-250 crores per year once fully operational.

MRR and Utilization Rate Targets

E2E Networks' monthly revenue run rate (MRR) reached INR 28 crores in December 2025. Management reaffirmed its target to achieve an MRR of INR 35-40 crores by March 2026, expressing high confidence in this goal. The current utilization rate for their capacity stands at 60-65% as of December end, with an ambitious target to increase this to 80-90% during the next financial year (FY27).

India AI Mission and Enterprise Traction

The company is actively engaged with the India AI mission, with contracts already initiated and the majority of workloads expected to go live by the end of January 2026. A positive development is the recalibration of payment cycles from quarterly to monthly for these contracts. E2E Networks is also experiencing growing traction with enterprise customers, including through its partnership with L&T, and is collaborating with LLM builders to support inference workloads, indicating a diversified client strategy.

Jarvis Labs Acquisition and Global Market Expansion

The acquisition of Jarvis Labs' assets was completed in Q3 FY26, a strategic move aimed at rapidly scaling E2E Networks in the global market. Jarvis Labs' customer base predominantly operates outside India, offering a highly integrated platform for self-service customers with lower ARPU but higher margins. This acquisition is expected to complement E2E's existing focus on larger enterprise clients and enhance its overall platform capabilities for international reach.

Cloud Reliability and Asset Longevity

Addressing concerns about a Mumbai server outage in December, management clarified that it was a smaller location and customers were being migrated to newer, more stable infrastructure. They emphasized ongoing investments in site reliability engineering to prevent future incidents. Regarding asset longevity, E2E Networks expects its GPU assets to have a useful life of 7-8 years, continuing to generate business, and broadly targets a Return on Equity (ROE) greater than 20% for its technology-driven operations.

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