CLOUD - Varanium Cloud

📊 NSE: CLOUD 🏢 Computers - Software - Medium / Small 📅 Last Updated: 12/14/2025 14:54

💰 Financial Performance

Revenue Growth by Segment

The company operates in a single segment. Total Income from Operations grew by 267.04% YoY, reaching INR 401.86 Cr (40,186.05 Lakhs) in Q3 FY24 compared to INR 109.48 Cr (10,948.64 Lakhs) in Q3 FY23.

Profitability Margins

Gross Margin improved to 41.34% in Q3 FY24 from 39.18% in Q3 FY23. However, Net Profit Margin declined to 26.90% in Q3 FY24 from 36.12% in Q3 FY23 due to a disproportionate 320.06% increase in total expenses.

EBITDA Margin

Core profitability as measured by Profit Before Tax (PBT) grew 173.29% YoY to INR 108.08 Cr, though the PBT margin contracted from 36.12% to 26.89% YoY.

Capital Expenditure

While specific CapEx figures are not stated, Depreciation & Amortisation Expenses surged by 17,907.42% YoY to INR 10.67 Cr in Q3 FY24, indicating massive recent commissioning of fixed assets such as the Mumbai EDC.

⚙️ Operational Drivers

Raw Materials

Data Center, bandwidth, and hosting charges represent the primary direct costs, accounting for 58.66% of total revenue in Q3 FY24.

Capacity Expansion

The company is focusing on the Mumbai EDC (Edge Data Center) and future expansion plans; however, specific capacity in MW or units is not disclosed.

Raw Material Costs

Direct costs (Data Center/Bandwidth) increased by 254.02% YoY to INR 235.74 Cr, slightly lower than revenue growth, which helped improve gross margins.

📈 Strategic Growth

Expected Growth Rate

267%

Growth Strategy

Growth is driven by the scaling of Edge Data Centers (EDC), expansion into foreign subsidiaries, and a rights issue to fund infrastructure. The company is pivoting from a pure service model to an infrastructure-heavy model to capture higher margins in the cloud hosting space.

Products & Services

Data center services, bandwidth provisioning, cloud hosting, and Edge Data Center (EDC) solutions.

Brand Portfolio

Varanium Cloud, Hydra Web, Streamcast (formerly).

New Products/Services

Expansion of the Mumbai EDC and development of foreign subsidiary operations are expected to be the primary new revenue contributors.

Market Expansion

The company is targeting expansion through foreign subsidiaries and localized Edge Data Centers in India.

🌍 External Factors

Industry Trends

The industry is shifting toward Edge Computing to reduce latency. Varanium is positioning itself by investing in EDCs to serve localized data processing needs, moving away from centralized cloud models.

Competitive Landscape

Competes with major cloud providers and local data center operators in the Indian market.

Competitive Moat

The company attempts to build a moat through physical infrastructure (EDCs) in niche locations; however, this is challenged by high capital intensity and intense competition from global hyperscalers.

Macro Economic Sensitivity

High sensitivity to digital infrastructure spending in India and data localization regulations.

Consumer Behavior

Increasing demand for low-latency hosting and localized data storage is driving the shift toward the company's EDC offerings.

Geopolitical Risks

Operations of foreign subsidiaries introduce exposure to international regulatory shifts and cross-border data transfer laws.

⚖️ Regulatory & Governance

Industry Regulations

The company is currently in violation of SEBI Regulation 33 and Regulation 17 due to the lack of a Managing Director and the resulting delay in submitting audited financial results for FY24 and Q1 FY25.

Taxation Policy Impact

Effective tax rate was approximately 18.8% in Q3 FY24, with tax expenses increasing 104.97% YoY to INR 20.40 Cr.

Legal Contingencies

The company faces potential regulatory action from SEBI and stock exchanges for failure to comply with listing obligations and disclosure requirements (LODR) regarding financial reporting timelines.

⚠️ Risk Analysis

Key Uncertainties

The primary risk is the 'inadequate board constitution' and the vacancy of the Managing Director position, which has delayed financial audits and led to a prolonged closure of the trading window since April 2024.