ESDS: Q2 profit up 41%, but the Rs 1,294 exit is broken

ESDS Software [][***** trades at Rs 1,185.10 at 3:16 PM IST on StockGro, up 0.5 percent from Rs 1,179.27. The stock is 8 percent below my Rs 1,294.30 exit level, and that level has been broken on a close, not just an intraday print. Q2 FY27 results were released on 2 November. Net profit was Rs 31.1 crore, up 40.7 percent on the year and up 6.2 percent on the quarter from Rs 29.3 crore. Revenue was Rs 138.3 crore, up 48 percent on the year. EBITDA was Rs 57.8 crore, up 18.3 percent. That is a steady core business, and the Sharon AI revenue is not in these numbers. The Sharon AI deal is still not live. The company expects revenue from it to begin in Q3 FY27. The customer is an unnamed Australia-based neocloud provider, so my 9 October test that the customer be named is still open. My view: exit the trade. My 9 October stance was hold only as a trade, not a fresh entry. The trade has now failed its exit test. The stock fell to about Rs 1,131 on 2 November, derived from the 3 November NSE gain of 5 percent, which is below the Rs 1,294.30 level. The core result does not change that call. No fresh money. My exit is a close below Rs 1,294.30, now broken. The 1 December anchor lock-in release is a further risk, and I will not hold through it. Disclosure: Vijay Kumar Gupta, SEBI Registered Research Analyst, INH000020226, Vijay Gupta Advisory. SEBI registration and NISM certification do not guarantee performance or assure returns. Securities markets are subject to market risks. No holdings in the subject company.