--- title: "ESDS’s GPU lease averages US$250m a year, 4.5 times its revenue" summary: "ESDS’s 2 November filings and Sharon AI’s SEC filings: 8,208 B300 GPUs in Australia for five years, a ₹1,176.6 crore advance, US$140m of guarantees, and what has to go right." url: https://www.thetechbag.com/blog/esds-gpu-lease-4-5-times-revenue format: Analysis desk: "Cloud & DevOps" region: India published: 2026-11-05 facts_checked: 2026-11-05 author: TechBag (The TechBag Journal) tags: ["ESDS Software Solution","SPOCHUB","Sharon AI","SharonAI Holdings","GPU-as-a-service","Nvidia B300","neocloud","GPU leasing","data centres","AI infrastructure","customer advance","letters of credit","IPO","earnings","Australia","India"] cover: https://www.thetechbag.com/blog/covers/esds-gpu-lease-4-5-times-revenue.png --- # ESDS’s GPU lease averages US$250m a year, 4.5 times its revenue *ESDS’s 2 November filings and Sharon AI’s SEC filings: 8,208 B300 GPUs in Australia for five years, a ₹1,176.6 crore advance, US$140m of guarantees, and what has to go right.* Analysis · Cloud & DevOps · By TechBag · Published 2026-11-05 · Facts checked 2026-11-05 · Canonical: https://www.thetechbag.com/blog/esds-gpu-lease-4-5-times-revenue The short version 1. ESDS Software Solution, a Nashik data-centre company listed on 4 September, has agreed to pay Sharon AI about US$1.25bn over five years for a cluster of about 8,200 Nvidia B300 GPUs in Australia. That averages US$250m, about ₹2,366 crore, a year: 4.5 times ESDS’s revenue of the last four quarters and five times its audited revenue for 2025–26.[7][1][4] 2. Sharon AI owns and runs the GPUs; ESDS and its subsidiaries rent them and resell the capacity to one unnamed overseas customer, which has paid ESDS’s subsidiary SPOCHUB an advance of ₹1,176.6 crore. ESDS has posted US$140m in letters of credit or bank guarantees and pays monthly in advance.[7][1][5] 3. By our arithmetic the cluster costs ESDS about US$3.48 a GPU-hour; ESDS says it will bill US$5–6. What has to go right: the cluster going live (it was due on 16 September), the customer staying for the term, and GPU rents holding up.[7][5] ESDS reported revenue of ₹138.3 crore for July to September, up 48% on a year earlier, and profit of ₹31.1 crore, up 40.7%.[2] Those figures do not yet include a single hour from the largest contract in its filings, which ESDS expects to start earning from in October to December. The question this piece answers: how does a mid-sized Indian cloud and data-centre company end up renting 8,208 GPUs on another continent to one customer, who carries which risk, and what would have to go right for the deal to pay? ## Who owns the GPUs, and who pays whom The contract runs the opposite way to a typical data-centre deal. SharonAI Holdings, listed on Nasdaq, says that through a subsidiary it “agreed to provide high-performance managed GPU compute and cloud infrastructure services” to ESDS Software Solution “and certain of its subsidiaries”. A master services agreement and Service Order No. 1, dated 31 March, cover “approximately 8,200 NVIDIA B300 GPUs” and about 17.8 petabytes of storage at a data centre in Australia, for 60 months from the service start date, with an option for ESDS to extend by 24 months. The total contract value is about US$1.25bn. Fees are “payable monthly in advance”, and ESDS provides “letters of credit or bank guarantees in an aggregate amount of USD $140,000,000.”[7] ESDS’s presentation counts 8,208 GPUs and describes Sharon AI as “an Australia-based neocloud AI compute service provider”.[1] **Figure: Sharon AI owns the GPUs; ESDS rents them and resells the capacity to one overseas customer that paid in advance** *The money and the GPUs in the Sharon AI–ESDS contract, as described in both companies' filings, March to November 2026* 1. 01Sharon AI buys and runs the clusterAbout 8,200 B300 GPUs in an Australian data centre. It expects about US$720m of capex for the contract and plans to borrow most of it. 2. 02ESDS rents it for five yearsAbout US$1.25bn, paid monthly in advance. ESDS posts US$140m of letters of credit or bank guarantees. 3. 03SPOCHUB resells the capacityESDS’s subsidiary sells GPU-as-a-service, with “exclusive access” to the cluster, to one customer. 4. 04An overseas customer prepaysAn advance of ₹1,176.6 crore, to be used up month by month over the contract. ESDS has not named the customer. Source: SharonAI Holdings 8-K (1 April 2026), 10-Q (6 August 2026); ESDS investor presentation (2 November 2026) and earnings call (25 September 2026) · as of 5 November 2026 · ESDS confirmed on its call that the SPOCHUB advance relates to the Sharon AI deal; it has not named the customer The other end of the chain is SPOCHUB Solutions, an ESDS subsidiary, which “received an advance of ₹11,766.35 million from an overseas enterprise customer for a new GPUaaS project to provide exclusive access to a cloud infrastructure”.[1] Asked on the 25 September call whether that advance relates to the Sharon AI deal, ESDS answered “Yes”, and said it “will get amortized over a period of contract on monthly basis.” An analyst on the call described the customer as a European bank; ESDS replied that “we have not mentioned who is the client”. For international customers, ESDS said, it discusses demand with Nvidia, and service is provided only after Nvidia’s approval.[5] ESDS has already earned from the project once: an analyst put SPOCHUB’s 2025–26 revenue at about ₹85 crore, and ESDS said it came from “technical design services” for the cluster “which they are building at Sharon AI factory”, a one-off.[5] TechBag countTechBag count: what the advance covers ₹1,176.6 crore is about US$124m at ₹94.65 to the dollar, the rate implied by ESDS’s own conversion of the contract value. That is about a tenth of the US$1.25bn, or about six months of the average monthly bill of US$20.8m. On the call ESDS said international customers are “giving 12 to 18 months of advances”; ESDS has not said how many months this advance covers.[1][5] ## A yearly bill 4.5 times the company's revenue ESDS’s presentation converts the contract at “~₹118,312.50 million”, ₹11,831 crore.[1] Spread evenly over 60 months, that is ₹2,366 crore a year. ESDS’s consolidated revenue for the year to March 2026 was ₹472.2 crore, and for the four quarters to September 2026 ₹525.8 crore.[4][3] The US$140m of letters of credit or guarantees, about ₹1,325 crore, is about the size of ESDS’s entire equity, ₹1,294.5 crore on 30 September after its ₹720 crore share sale.[3][6] **Figure: One year of the GPU lease is 4.5 times what ESDS earned in its last four quarters** *Average annual value of the Sharon AI contract against ESDS's revenue, equity, customer advance and posted guarantees, ₹ crore, at ₹94.65 to the US$* GPU lease, average a year US$250m 2,366 ₹ crore Guarantees ESDS posted US$140m 1,325 ₹ crore ESDS total equity, 30 Sept 1,295 ₹ crore Customer advance to SPOCHUB 1,177 ₹ crore ESDS revenue, last four quarters 526 ₹ crore ESDS revenue, FY26 (audited) 472 ₹ crore | | Value (₹ crore) | | --- | --- | | GPU lease, average a year | 2,366 | | Guarantees ESDS posted | 1,325 | | ESDS total equity, 30 Sept | 1,295 | | Customer advance to SPOCHUB | 1,177 | | ESDS revenue, last four quarters | 526 | | ESDS revenue, FY26 (audited) | 472 | Source: SharonAI Holdings 8-K (1 April 2026); ESDS results (24 September and 2 November 2026) and investor presentation (2 November 2026); TechBag arithmetic · as of 5 November 2026 · Annual average = US$1.25bn ÷ 5. Last four quarters = October 2025 to September 2026; the December 2025 quarter is FY26 less the other three Not all of it is firm. Sharon AI’s filing says ESDS “may not terminate the Service Order for convenience during the first 36 months”, and that ending it early triggers termination payments whose size it does not give.[7] Thirty-six months at the average rate is about US$750m. Sharon AI’s own scale shows why the guarantees exist: it reported revenue of US$2.2m for the six months to June 2026, and expects to spend about US$720m on equipment for “the $1.26 billion customer services arrangement with ESDS”.[8] It intends to borrow 70–80% of such capex against the assets, and on 28 September it signed senior secured term loans of up to US$356m, at 7.25% to 9.95%, to buy servers “in support of a customer GPU compute contract”; the filing does not name the customer.[9][10] ReportedWhat ESDS's own filings do not show We found the US$140m of guarantees only in Sharon AI’s filing; ESDS’s quarterly results do not list them. ESDS’s total assets doubled in six months, to ₹4,109.5 crore from ₹1,937.9 crore, and the share sale and the advance together come to ₹1,897 crore of the ₹2,172 crore rise, but ESDS does not break the rise down.[3] ## What ESDS earns today, before the GPUs bill ESDS sells three things: infrastructure as a service (cloud, colocation and GPUs, 50.5% of the September quarter’s revenue), managed services (31.2%) and software as a service (18.3%). Existing customers brought in 86.7%. It runs five data centres in India and listed 115 banks and financial institutions and 104 government clients on its community clouds on 30 June.[2][1] **Figure: Before the GPUs bill, ESDS earns ₹130–140 crore a quarter, with its peak in the March quarter** *ESDS consolidated revenue from operations by quarter, April 2025 to September 2026, ₹ crore* | | Revenue from operations | | --- | --- | | Q1 FY26 | 124.6 | | Q2 FY26 | 93.8 | | Q3 FY26 | 86.3 | | Q4 FY26 | 167.5 | | Q1 FY27 | 133.7 | | Q2 FY27 | 138.3 | Source: ESDS unaudited consolidated results, 24 September and 2 November 2026; December 2025 quarter by TechBag arithmetic · as of 5 November 2026 · FY = April to March. The FY26 quarters were prepared by management and not reviewed by the auditors; Q3 FY26 = FY26 audited revenue less the other three quarters The 48% rise is against a weak September quarter of 2025. Against April to June, revenue rose 3.5%. ESDS told the call that “Q4 is always a stronger quarter for us”, and that the 2025–26 rise in managed services was “primarily because of technical design service”, the Sharon AI cluster work; “Now, the shift will be towards IaaS revenue.”[5] The margin has already moved: EBITDA was 41.8% of revenue against 52.0% a year earlier, as other expenses rose 182% to ₹50.8 crore. ESDS does not say what those expenses were.[1] ## The spread: about US$3.48 an hour in, US$5–6 out A GPU-hour is the unit this business sells. Divided across 8,208 GPUs and 60 months of hours, US$1.25bn comes to about US$3.48 per GPU-hour, storage and Sharon AI’s management included. On the call ESDS’s management said the industry is “billing upwards of $5 per GPU per hour”, “$5, $6 per hour. So, we are also going to bill our customer in that range only”, and that ESDS targets net profit margins of 15–20% on such deals: “We will not work for anything lesser than that.”[5] The company also said the price at which ESDS leases from Sharon AI is about half the current market price.[5] **Figure: ESDS's margin is the gap between a fixed rent and a fixed resale price** *Per GPU-hour cost of the Sharon AI contract and ESDS's stated billing and margin targets, as of September–November 2026* US$3.48 ESDS's cost per GPU-hour, contract average TechBag arithmetic US$5–6 What ESDS says it will bill per GPU-hour ESDS call, 25 Sept 15–20% ESDS's target net profit margin on such deals ESDS call, 25 Sept 36 months Before ESDS can end the contract for convenience Sharon AI 8-K Source: SharonAI Holdings 8-K (1 April 2026); ESDS earnings call (25 September 2026); cost per hour is TechBag arithmetic · as of 5 November 2026 · Cost = US$1.25bn ÷ (8,208 GPUs × 60 months × 730 hours); it includes storage and services in the contract TechBag countTechBag count: if every GPU billed every hour At US$5 an hour, 8,208 GPUs for every hour of a year would bill about US$360m, roughly ₹3,400 crore, against an average cost of US$250m: a spread of about 30% before ESDS’s own costs. At US$6 it would be about US$431m. ESDS confirmed on the call that its price to the customer is fixed in advance, like its rent.[5] Neither figure is a forecast: ESDS gives no guidance, and has not disclosed its contract with the customer. The bet behind the fixed price is on GPU rents. ESDS said on the call that B300s are “appreciating”, and that “next three to five years, it is anticipated that the rates will go up.”[5] Public prices say rents are moving in both directions: in our Trend of 30 October, B200 hours had risen 21% in a month, while the median posted price of a B300 fell 16.3% over the 30 days to 30 October on the Price of Compute index.[12] For a reseller with fixed prices on both sides, a falling market matters most when the contract comes up for renewal or the customer leaves. ## What has to go right First, the cluster has to go live. Sharon AI’s filing scheduled delivery for 16 September.[7] On 25 September ESDS said the date “had got postponed by almost a month, 1.5”, and later in the call that ESDS was “expecting that to go live by November first week.”[5] The 2 November presentation still says revenue “is expected to commence in the Q3FY27”, October to December.[1] As of 5 November we found no filing by either company saying the cluster is live. **Figure: Seven months from contract to revenue, with delivery seven weeks late on ESDS's own estimate** *The Sharon AI–ESDS contract, ESDS's listing and the start of billing, March to November 2026* | Date | Event | Detail | | --- | --- | --- | | 31 Mar 2026 | Contract signed | Master services agreement and Service Order No. 1: ~8,200 B300s, 60 months, US$1.25bn | | 1 Sept 2026 | IPO closes | ₹720 crore raised; ₹576 crore of it is for equipment in ESDS's data centres | | 4 Sept 2026 | ESDS lists | Issue price ₹429; closes at ₹908.40 on the NSE | | 16 Sept 2026 | Scheduled delivery | The date in Sharon AI's filing | | 25 Sept 2026 | ESDS: about 1.5 months late | Go-live expected in the first week of November | | 28 Sept 2026 | Sharon AI's US$356m loans | Secured term loans for servers for a customer GPU contract | | 2 Nov 2026 | Q2 results | Revenue from the deal expected from October–December | Source: SharonAI Holdings 8-K filings (1 April, 1 October 2026); ESDS filings and earnings call (September–November 2026); NSE · as of 5 November 2026 Second, the customer has to stay and pay. One customer takes the whole cluster, and ESDS says it does not see concentration as a risk because an advance-paying customer who leaves can be replaced by “another customer ready to pay you a higher price”.[5] That holds only while demand stays ahead of supply. Sharon AI names the risk from its side: it is “exposed to the credit quality of ESDS Software Solutions”.[9] Third, the shareholders who priced all this. ESDS’s shares closed at ₹1,173.90 on 5 November on the NSE, 2.7 times the ₹429 issue price and 37% below the closing high of ₹1,853.15 on 24 September.[11] At that price the company is worth about ₹13,760 crore, a little more than the ₹11,831 crore contract. On 9 September, asked by the NSE to explain the price moves, ESDS said it was “not aware of any specific reason”.[13] Our viewOur view: the three numbers to read in the next results The first quarter with GPU billing (October to December, reported around February) will show three things the filings so far cannot: how much revenue the cluster adds per month, what the cost line does, and how much of the ₹1,176.6 crore advance is used up. If the revenue arrives at about US$5 an hour, the arithmetic above holds. The evidence against reading too much into one quarter: the contract runs five years, and ESDS has not disclosed the length of its contract with the customer. India gets ESDS's own GPUs later, and fewer The Sharon AI cluster is in Australia and serves an overseas customer. The GPUs ESDS will own are fewer and later: an analyst on the 25 September call recalled 600 to 800 in its offer document, and ESDS said the target was now “around 1,500 GPUs”, deployed by the end of March 2027 with billing from April to June 2027. It described “the new setup that we are doing in India” as “of a very small quantity”, funded about a third each from customer advances, debt and the share sale.[5] Of the ₹576 crore of IPO money set aside for equipment in its data centres over 2026–27 and 2027–28, none had been spent by 30 September, Crisil Ratings reports; the unspent money sits in fixed deposits.[6] ESDS said Indian demand is taking “some more time to pick up” and ESDS will offer capacity to international customers first, “because they are ready to give more price”; he put the domestic order book at about ₹3,000 crore over three years.[5] ESDS is MeitY-empanelled and hosts government programmes including Mudra Yojana.[2] For how much GPU capacity India has, and how much of the subsidised part is used, see [our analysis of India’s compute pledges](https://www.thetechbag.com/blog/india-ai-compute-pledges-gpu-use). How we did this Figures as of 5 November 2026, 7pm IST ESDS’s figures are consolidated, from its filings on the NSE, read in full. The contract terms are from SharonAI Holdings’ 8-K of 1 April; its 10-Q calls the arrangement US$1.26bn, its 8-K and press release US$1.25bn, and we use US$1.25bn. Sharon AI gives “approximately 8,200” GPUs and ESDS 8,208; the per-hour cost uses 8,208 and 730 hours a month. Rupee conversions use ₹94.65 to the dollar, the rate in ESDS’s own conversion (the ECB’s reference rate for 4 November gives ₹94.64).[14] The annual average assumes even payments; the filings do not give the schedule. The December 2025 quarter is FY26 audited revenue less the other three quarters. Market value is 117.21 million shares, from ESDS’s paid-up capital at ₹1 a share, times the 5 November close. Quotes from the 25 September call are from ESDS’s own transcript. Spotted an error? Write to us; corrections are published at the foot of the piece. Sources 1. [ESDS Software Solution, Investor Presentation Q2FY27 (filed with NSE and BSE)](https://nsearchives.nseindia.com/corporate/ESDS_02112026174915_ESDS_Presentation_BSE_NSE.pdf) — 2 November 2026 2. [ESDS Software Solution, Press Release for Q2FY27](https://nsearchives.nseindia.com/corporate/ESDS_02112026165814_ESDS_Press_Release_BSE_NSE.pdf) — 2 November 2026 3. [ESDS Software Solution, unaudited standalone and consolidated results for the quarter and half year to 30 September 2026](https://nsearchives.nseindia.com/corporate/ESDS_02112026163013_ESDS_BM_Outcome_BSE_NSE_Intimation.pdf) — 2 November 2026 4. [ESDS Software Solution, unaudited results for the quarter to 30 June 2026 (with the March 2026 quarter and FY26)](https://nsearchives.nseindia.com/corporate/ESDS_24092026202831_ESDS_BM_Outcome_BSE_NSE_Intimation.pdf) — 24 September 2026 5. [ESDS Software Solution, transcript of the earnings conference call of 25 September 2026](https://nsearchives.nseindia.com/corporate/ESDS_29092026195046_ESDS_Transcript_Inv_meet_25092026_BSE_NSE_29092026.pdf) — 29 September 2026 6. [Crisil Ratings, Monitoring Agency Report on ESDS's IPO proceeds, quarter to 30 September 2026](https://nsearchives.nseindia.com/corporate/ESDS_03112026123538_ESDS_MA_Report_BSE_NSE_Intimation.pdf) — 3 November 2026 7. [SharonAI Holdings, Form 8-K, Item 1.01: master services agreement and service order with ESDS](https://www.sec.gov/Archives/edgar/data/2068385/000149315226014475/form8-k.htm) — 1 April 2026 8. [SharonAI Holdings, Form 10-Q for the quarter to 30 June 2026 (revenue; Note 20, commitments)](https://www.sec.gov/Archives/edgar/data/2068385/000149315226036377/form10-q.htm) — 6 August 2026 9. [SharonAI Holdings, Form S-1/A (risk factors: ESDS contract capex, financing, counterparty credit)](https://www.sec.gov/Archives/edgar/data/2068385/000149315226039475/forms-1a.htm) — 20 August 2026 10. [SharonAI Holdings, Form 8-K, Items 1.01 and 2.03: syndicated facility agreement of up to US$356m](https://www.sec.gov/Archives/edgar/data/2068385/000149315226045368/form8-k.htm) — 1 October 2026 11. [NSE, ESDS historical prices (security-wise price and volume data), 4 September to 5 November 2026](https://www.nseindia.com/get-quotes/equity?symbol=ESDS) — 5 November 2026 12. [The TechBag Journal, GPU rent turned up: B200 hours rose 21% in a month, H100 hours 7% (B300 figure from the Price of Compute index)](https://www.thetechbag.com/blog/gpu-rental-prices-turn-up-b200-h100) — 30 October 2026 13. [ESDS Software Solution, Clarification regarding movement in price (reply to NSE)](https://nsearchives.nseindia.com/corporate/ESDS_09092026214613_Clarification-Price_Movement_NSE.pdf) — 9 September 2026 14. [European Central Bank euro reference rates, USD/INR cross rate (via the Frankfurter API)](https://api.frankfurter.app/2026-11-04?from=USD&to=INR) — 4 November 2026 **Disclosure.** TechBag is a software reseller: it earns a margin when a reader buys through it, including from vendors named here. The analysis is TechBag’s own; no vendor paid for or saw this piece before publication. Facts are labelled reported, TechBag count or our view. **Read this next:** [GPU rent turned up: B200 hours rose 21% in a month, H100 hours 7%](https://www.thetechbag.com/blog/gpu-rental-prices-turn-up-b200-h100) — GPU rent is the price ESDS is betting on: B200 hours rose 21% in a month and H100 hours 7%, on two public indices. Go deeper on TechBag - [US$300bn pledged to India's data centres; subsidised GPUs reportedly 20% used](https://www.thetechbag.com/blog/india-ai-compute-pledges-gpu-use) — India's own GPU build-out, the market ESDS says it will serve later - [Microsoft Azure](https://www.thetechbag.com/microsoft/microsoft-azure) — a hyperscaler's GPU cloud, the other way companies rent AI compute - [Google Cloud](https://www.thetechbag.com/google/google-cloud) — a cloud whose owner also rents third-party GPU capacity