E2E Networks Q4 FY26 results: Revenue up 186% to ₹95.64 crore, returns to profit; stock hits 5% UC

Shares of E2E Networks Limited surged 5% or ₹171.70 to ₹3,606.20 on the NSE on May 11, hitting the day’s upper range, as the cloud infrastructure company reported its highest-ever quarterly revenue driven by surging demand for GPU computing capacity from enterprise AI and machine learning workloads.

The stock opened sharply higher from its previous close of ₹3,434.50, with the intraday range spanning ₹3,306.50 to ₹3,606.20. At current levels, E2E Networks is trading well above its 52-week low of ₹1,833.60 and approaching the upper end of its year range, with a 52-week high of ₹3,894.70. Market capitalisation stands at approximately ₹7,413 crore. The stock carries no P/E ratio and pays no dividend. Average daily volume is around 61,830 shares.

What did E2E Networks report in Q4 FY26?

Revenue for Q4 FY26 surged 185.66% year-on-year to ₹95.64 crore from ₹33.48 crore in Q4 FY25 — the highest quarterly sales in the company’s history. On a sequential basis, revenue grew 36.59% from ₹70.02 crore in Q3 FY26, reflecting accelerating demand momentum. Net profit for the quarter came in at ₹6.44 crore, a return to profitability after three consecutive loss-making quarters — Q1 FY26 loss of ₹2.84 crore, Q2 FY26 loss of ₹13.46 crore, and Q3 FY26 loss of ₹5.70 crore.

Operating margin excluding other income improved to 60.75% from 56.61% in Q3 FY26, with operating profit standing at ₹58.10 crore. However, the PAT margin of 6.73% is a sharp contraction from 40.65% in Q4 FY25 — the gap between robust operating margins and thin net margins is entirely explained by one line item.

The depreciation problem: AI infrastructure at a cost

The central challenge in E2E Networks’ financial story is depreciation. As the company has aggressively built out GPU infrastructure to capture India’s enterprise AI boom, depreciation charges have ballooned to ₹51.35 crore in Q4 FY26 — representing approximately 54% of quarterly revenue and rising 170.35% year-on-year. This single cost item is effectively absorbing the entire gap between E2E’s healthy operating profitability and its wafer-thin net margins.

The trajectory is stark: in Q4 FY25, when revenue was ₹33.48 crore and net profit was ₹13.61 crore, depreciation was a fraction of current levels. As GPU assets have been capitalised and added to the balance sheet through FY26, the depreciation charge has compounded sharply, dragging the bottom line even as revenues have tripled.

What does the full FY26 picture look like?

The profitability trajectory through FY26 has been volatile. After consistent profitability in every quarter of FY25 — ₹12.15 crore in Q2, ₹11.59 crore in Q3, ₹13.61 crore in Q4 — E2E stumbled into losses across Q1, Q2, and Q3 of FY26, accumulating total losses of ₹22 crore over those three quarters. The Q4 FY26 return to profit at ₹6.44 crore only partially offsets those losses, leaving full-year profitability minimal despite the exceptional top-line growth.

The key question for investors is whether the depreciation curve has peaked. If E2E has completed the bulk of its GPU infrastructure build-out, incremental depreciation additions should moderate as revenue continues to grow — potentially creating meaningful operating leverage that flows through to net profit. If, however, further capital expenditure rounds are required to keep pace with AI compute demand, the depreciation burden will continue to grow alongside revenues, keeping net margins thin.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors are advised to consult a registered financial advisor before making any investment decisions. Business Upturn does not hold any position in the securities mentioned.