E2E Networks Ltd Q2 FY27 Results Analysis: Revenue Surges 411%, PAT Swings to Profit

E2E Networks Ltd reported Q2 FY27 numbers. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

E2E Networks swung from a Rs.13.46 Cr loss in Q2FY26 to Rs.72.70 Cr PAT as revenue grew 410.8% YoY to Rs.223.76 Cr and 42.7% QoQ on Blackwell capacity additions. EBITDA margin of 76.6% exceeded management's ~70% medium-term guidance, with EBITDA up 852.5% YoY to Rs.171.46 Cr and H1FY27 operating cash flow of Rs.396.49 Cr at 3.4× PAT. Borrowings rose to ~Rs.450 Cr (debt/equity ~25%) to fund capex, and a ~Rs.1,000 Cr Sovereign AI term sheet signed Aug 31, 2026 runs to June 2029.

Key Investment Insights

Key Positives

• Revenue grew 410.8% YoY to Rs.223.76 Cr and 42.7% QoQ from Rs.156.76 Cr in Q1FY27.
• EBITDA margin expanded to 76.6% from 75.2% QoQ and 41.1% YoY, above management's ~70% medium-term guidance.
• PAT turned from a Rs.13.46 Cr loss in Q2FY26 to Rs.72.70 Cr profit; basic EPS rose from -Rs.0.67 to Rs.3.54.
• EBITDA grew 852.5% YoY to Rs.171.46 Cr, outpacing revenue growth of 410.8%.
• H1FY27 operating cash flow of Rs.396.49 Cr was 3.4× H1 PAT; cash and equivalents rose 86.4% to Rs.599.42 Cr.
• Binding term sheet for a ~Rs.1,000 Cr Sovereign AI contract signed Aug 31, 2026, valid to June 2029.
• Entire Rs.533.45 Cr of capital work-in-progress was capitalized during H1FY27; PP&E rose 54.2% to Rs.1,485.66 Cr.

Risk Factors

• Total borrowings rose 4.4× from Rs.103.20 Cr (Mar 26) to ~Rs.450 Cr (Sep 26); debt/equity increased from ~6.1% to ~25.0%.
• H1FY27 free cash flow was negative at Rs.23.11 Cr as capex of Rs.419.60 Cr exceeded operating cash flow.
• Employee costs grew 63.9% QoQ versus revenue's 42.7%, rising from 7.0% to 8.1% of revenue, partly on Rs.6.55 Cr of H1 ESOP charges.
• Other expenses grew 66.9% QoQ to 3.7% of revenue amid a 46% power-price increase (IEX data).
• Finance costs rose 415.5% YoY to Rs.10.30 Cr following the debt-funded Blackwell procurement.