Summary
E2E Networks Limited - Q3 FY 2026 Earnings Call Summary Friday, January 16, 2026, 11:30 A.M. IST
Event Participants
Executives 3 M R. Tarun Dua (Managing Director), Ms. Nitin Jain (Chief Financial Officer), Mr. Ronit (Company Secretary)
Analysts 11 Abhishek (Incred Capital), Akhilesh Rawat (Ridhanta Vision), Bharat Gulati (Dalal & Broacha), Bhavya Gandhi (Bajaj Alternates), Debashish Mazumdar (Svan Investments), Keshav (Niveshaay), Krupa Desai (Electrum PMS), Kshitij Saraf (Individual Investor), Neil Munot (Pico Capital), Nikhil Kothari (Antara Capital), Nishant Joshi (Equisense Advisors), Varun Gandhi (Fident Asset Management)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Operational Revenue | ₹70.0 crores | +68.3% YoY and +59.8% QoQ. Driven by higher capacity utilization and early traction from India AI Mission contracts. |
| EBITDA | ₹39.6 crores | +60.9% YoY and +120.2% QoQ. Margin improved to 56.6% due to strong operating leverage. |
| PAT | (₹5.7 crores) | Net loss; however, improved 58% QoQ. Impacted by ₹47.6 crore increase in depreciation and higher finance costs. |
| Monthly Revenue Run-rate (MRR) | ₹28.0 crores | December 2025 exit rate. Management is 70-80% toward its target of ₹35-40 crores MRR by March 2026. |
| Installed GPU Capacity | 4,000+ Units | Includes recent receipt of 1,024 NVIDIA B200 (Blackwell) GPUs at the Chennai facility. |
| Utilization Rate | 60% - 65% | As of December 2025. Management targets 80-90% utilization during FY27. |
| Depreciation | ₹47.6 crores | Significant increase YoY/QoQ reflecting commissioning of large GPU clusters deployed in FY25 and FY26. |
Geographic & Segment Commentary
- India AI Mission: Implementation has commenced with majority of workloads expected to go live by end of January 2026. The mission accounts for significant upcoming training workloads for sovereign LLM models, with payment cycles recently shifted from quarterly to monthly to improve cash flows.
- Enterprise & Partnerships: Traction is gaining via the L&T partnership, with the first 1-year GPU service contract starting Jan 6, 2026. Management noted increased conversions among AI-native companies and large enterprises for both training and inference workloads.
- Global (Jarvis Lab): Acquisition of assets completed this quarter. While Q4 revenue contribution will be muted, the platform targets global self-service customers with lower ARPU but higher margins, positioning E2E for international scaling.
Company-Specific & Strategic Commentary
- Blackwell Deployment: E2E has received 1,024 NVIDIA B200 GPUs in Chennai. Deployment is expected to be completed in Q4 FY26, with an estimated ARR potential of ₹250 crores from this cluster alone.
- Sovereign Cloud: The company is positioning itself as a “Sovereign AI” provider, emphasizing data localization, Indian ownership of infrastructure (via L&T partnership), and proprietary software developed in India to avoid global compliance risks.
- Inference Marketplace: Strategic focus shifting toward building a marketplace for inference providers. Management noted that LLM builders who use E2E for training are increasingly contracting for inference workloads to achieve stable revenue.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| MRR Target | ₹35 - ₹40 crores by March 2026 | Driven by India AI Mission ramp-up and Blackwell GPU monetization. |
| EBITDA Margin | 65% - 70% | Target margin as the business achieves higher scale and utilization of the current gross block. |
| Asset Useful Life | 7 - 8 Years | Management expects these assets to generate business well beyond the 6-year accounting depreciation period. |
| Capital Expenditure | ₹600 - ₹650 crores | Specifically for the 1,024 Blackwell GPU cluster, funded via term loans from Axis and HDFC Bank. |
Risks & Constraints
| Risk | Context |
|---|---|
| Service Reliability | A major outage occurred in Mumbai in December. Management is migrating customers to larger Delhi/Chennai zones and increasing investment in Site Reliability Engineering (SRE). |
| Supply Chain | Potential shortages or price hikes in RAM/Memory could impact GPU acquisition costs. Management relies on strong vendor partnerships to mitigate irrational pricing cycles. |
| High Depreciation | Aggressive capex leading to near-term PAT losses. Profitability depends entirely on rapid utilization of newly commissioned high-cost GPU hardware. |
Q&A Highlights
India AI Mission & Payments
- Question: What is the payment cycle for the India AI mission? (Bhavya Gandhi)
- Answer: It has been recalibrated from quarterly to monthly in latest documents, which will benefit cash flow (Tarun Dua).
Blackwell Economics
- Question: What is the revenue potential and rental rate for the new Blackwell GPUs? (Neil Munot, Krupa Desai)
- Answer: Estimated ARR of ~₹250 crores for 1,024 units. International rental rates are ~$3-$4 per hour for long-term contracts; E2E hopes to achieve similar levels (Tarun Dua).
Asset Reliability
- Question: How did the Mumbai outage impact the business? (Varun Gandhi)
- Answer: It was a smaller location; no material revenue impact expected. Focus is now on multi-zone architectures to prevent single points of failure (Tarun Dua).
Competitive Landscape (ASICs)
- Question: Will E2E adopt ASICs/Google CPUs if they become more cost-effective than NVIDIA? (Varun Gandhi)
- Answer: portfolio is driven by customer demand. Currently, the vast majority of demand remains for NVIDIA, but the company is open to other vendors if customer requirements shift (Tarun Dua).
Key Takeaway
E2E Networks delivered a strong Q3 FY26 with operational revenue growing 60% QoQ to ₹70 crores, driven by the initial ramp-up of India AI Mission contracts and improved short-term demand utilization. While the company reported a PAT loss of ₹5.7 crores due to a sharp ₹47.6 crore increase in depreciation from new GPU deployments, EBITDA margins remained healthy at 56.6%. The strategic acquisition of Jarvis Lab and the arrival of 1,024 NVIDIA Blackwell GPUs in Chennai are pivotal for future growth, with the Blackwell cluster alone expected to add ₹250 crores to the ARR. Management remains confident in hitting a ₹35-40 crore MRR by March 2026 as utilization climbs toward the 80-90% target. Key watch points include the successful technical migration of Mumbai workloads following recent outages and the speed of enterprise conversion through the L&T partnership. E2E is positioned to transition back to net profitability as the massive newly added capacity matures in H1 FY27.
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