Thank you. Good afternoon, everyone.

On behalf of ICICI Securities, I welcome everyone to Netweb Technologies Q1 FY27 earnings call. We have the pleasure of having with us the senior management team of Netweb Technologies, led by CMD Mr.

Sanjay Lodha, Whole-Time Director Mr. Navin Lodha, CFO Mr.

Ankit Kumar Singhal, Chief Sales and Strategy Officer Mr. Hirdey Vikram, and Head of Yuva Advisors, the IR advisor for Netweb Technologies, Mr.

Sanjeev Sancheti. Without further delay, I'd like to hand over the floor to Mr.

Sanjeev. Over to you, sir.

Thank you, Seema. Good afternoon to all the participants.

Before I hand over the call to Mr. Sanjay Lodha for the opening remarks, I would like to draw your attention to the safe harbor statement in the earnings presentation.

I request each one of you to go through the disclaimer in that presentation before the Q&A starts so that you are aware of the same. Thank you, and over to you, Mr.

Lodha.

Thank you, Seema and Sanjeev. Good afternoon and a very warm welcome to all of you to Netweb Technologies Q1 Financial Year '27 earnings call.

I am pleased to share that Netweb Technologies delivered a record quarter, achieving its highest-ever quarterly revenue from operations and profits. Our revenue from operations for the quarter stood at Rs 8,197 million, reflecting a strong year-on-year growth of 172.1%.

Profit after tax stood at 853 million, representing a 179.9% year-on-year growth with a PAT margin of 10.3%. The performance reflects sustained demand momentum coupled with disciplined execution across our business.

Our AI segment continues to be key growth driver, contributing 5,105.70 million, being 62% of revenue from operations and growing at a huge number of 484% year-on-year. Our other two core segments, HPC and Private Cloud, maintained robust traction at 1,252.94 million and 1,353.46 million, respectively, reinforcing the breadth and resilience of our three growth pillars.

Our order book stood at 25,069.35 million as on 30th June, 2026, with an L1 position of 8,480.47 million and a pipeline of 10,401 million, together providing the strong business visibility in the medium term. Sorry, 1,04,100 million together providing a strong business visibility in the medium term.

The world and India in particular is witnessing unprecedented AI infrastructure build-out, anchored by IndiaAI Mission GPU compute initiative, indigenous sovereign foundation models, and world-class demand from neo cloud providers and CSPs. Sovereign AI compute is no longer aspirational.

It has become a strategic national imperative, creating a deep multi-year demand pipeline for high-end computing system designed and manufactured within the country. As NSM 2.0 transitions into build and design in India approach, and HPC adoption broadens across enterprises, indigenous design and domestic manufacturing are emerging as decisive qualification criteria.

As one of the India's leading Indian-origin OEM in the high-end computing solutions with fully integrated design, manufacturing, and deployment capabilities, we are well positioned to address this opportunity. Our leadership across HCS portfolio reinforced by an early mover advantage in AI infrastructure continues to strengthen both our growth trajectory and our opportunity pipeline.

Looking ahead, our strategy is anchored in deepening our three core verticals. In HPC, we are investing in low-footprint architecture, advanced interconnects, and direct cooling technologies for pre-exascale and exascale systems.

In Private Cloud and HCI, we are delivering indigenous solutions to colocation providers, cloud providers, and enterprise. Through Tyrone Skylus, our indigenous Private Cloud platform, we are enabling enterprises to accelerate their hybrid cloud strategies while addressing the growing need for data localization and data sovereignty.

In AI systems, we continue to innovate across every layer of the stack, from dense AI compute to advanced liquid cooling to GPU orchestration, AI workspaces, our cloud software stack. We are also developing pre-curated sovereign AI appliances to ready-to-deploy reference architecture for enterprise as well as central and state sovereign AI programs.

Beyond our core, we are investing into two emerging opportunities. In physical AI, which is emerging as the next frontier for AI adoption, we are investing in R&D across physical AI and positioning our AI systems, digital twins, in-house software, and training simulation backbone for India's physical AI developers, with a focus on defense, national security, and strategic manufacturing.

In quantum computing, we have commenced R&D for quantum simulators and emulators and have started engaging with institutions, academic hubs, and startups in the ecosystem as technology partners. With sustained investment in innovation and chip-agnostic design philosophy, alignment with Make in India vision, and strong order book and pipeline, we remain confident in our ability to deliver long-term sustainable growth and create enduring value for all our stakeholders.

I will now request Ankit to take you through the financials in more details. Thank you.

Thank you, Mr. Lodha.

Good afternoon, ladies and gentlemen, and thank you for joining our earnings call. Before we open the floor for Q&A, I will provide a brief overview of the financial performance for the quarter.

I trust that by now you have had the opportunity to review our earning presentation and press release. While our CMD has already discussed the macro outlook, I will elaborate on the financial performance in more detail.

Our revenue from operation for Q1 Financial Year '27 stood at Rs 8,197 million, a growth of 172.1% on year-on-year basis. Operating EBITDA for Q1 FY27 stood at Rs 1,205 million, a growth of 169% year-on-year with an operating EBITDA margin of 14.7%.

Profit after tax for Q1 FY27 stood at Rs 853 million, a growth of 179.9% year-on-year with a PAT margin of 10.3%. Now, I would like to throw some light on key balance sheet ratios.

Return on capital employed was 48.2%, while return on equity stood at healthy 44.6%. Gross fixed asset turnover ratio stood at 43.9 times as on 30th June, 2026.

Our cash conversion cycle as at 30th June stood at 96 days. Receivable days improved from 86 days in March 2026 to 78 days in June 2026, reflecting stronger collections.

Inventory days increased from 86 days in March to 110 days in June, primarily on account of a build-up of raw material stock to secure adequate inventory of key inputs in the light of surging global demand for AI compute infrastructure. Net debt as on 30th June, 2026, stood at Rs 1,999 million.

Our growth priorities remain on track, supported by high demand for high-end computing solutions, a healthy order book, and a solid pipeline. We are well positioned to deliver consistent revenue and profitability growth going forward.

With this, I now hand over the call back to Seema.

Operator, now we can open the floor for Q&A.

Hi. Good afternoon, team.

My first question is we've seen a very robust build-up of order book, 35 billion including L1 orders. If you can share some insights in terms of what has been the mix of orders coming in from the AI customer clients, and how are we seeing the ticket size of AI orders for us moving up?

Average ticket size orders, if you can indicate, and what type of customer client applications have we seen these orders? That's the first question.

Basically,

thank you for your question actually. You might have seen that basically it has been a very, very robust quarter for us, and basically, primarily if you see the order book, it will give you an indication.

Around 2,500 crore we have on the order book already, and we have the L1. L1 is that is almost all basically the orders which have been won and not yet received actually.

That is we call it a quasi-order book. That is also around 800-odd crores.

Approximately, if you add both of them, it's somewhere around maybe 3,400 crores approximately. That's a very, very healthy order book, and basically, as our ordering cycle, our execution cycle is pretty fast actually.

That will give you an indication that basically that can give you some indication of what kind of numbers we can expect actually in this financial year. Okay.

That is one. As regards the order book mix is concerned, it is basically, as guided by us, our mix is remaining the same in the AI, supercomputing, as well as primarily on the private cloud side.

Basically, it will remain that way, but basically, you can say the order book maybe around 40% to 45% should be around on the AI side of it, and balance should be between the other two segments. All the three pillars are very robust and growing very fast for us, and they are very much intact actually.

That's exactly I'd like to answer you.

Sir, to support this kind of growth, do we think incrementally we might have to invest in assembly facilities or SMT facilities to ramp up capacities, or the current capacity is sufficient enough to drive 50%, 60% CAGR growth?

Renu ji, you know that basically we are a capability basically driven kind of organization, not basically primarily we are driven by capacity. Okay.

Currently also, you know that we don't do any kind of contract manufacturing or anything. The facilities which we have built up as we have told you earlier also was already built up for basically sustaining a huge turnover of 3,000-plus crores.

Definitely, that is there. I think at this level, we don't think we need to do any major capex, some light capex.

A routine capex goes on continuously, that will still go on, but basically, I'm not guiding for any new capex as such recently.

Sure. Secondly, if you look on the working capital side, the smart improvement which has been seen and it's clearly reflected from the numbers also that cash has been deployed to source materials and draw down on inventories.

In this context, if you look at the growth expectation, how do we see the growth funding requirement for the company to drive this 4,000 crores of revenue and onward?

No, Renu, thanks for this. I'll take that.

This is Sanjeev. I think, as you can see, the last quarter the growth has been very high, and I think for the first time in many quarters, we've had a positive debt closing figure is reflective of the growth, and obviously, as Sanjay ji had guided already that not guided really, but the L1 and the order book is significantly large for us to drive a very strong growth in the current financial year.

Obviously, the company will have to invest in the working capital for growth. We do not want a situation where a very large growth, looking at the pipeline, is available for us to grab and we don't grab it because of the lack of capital.

Obviously, we will take calls as to in what form and when we will introduce capital: debt, equity, or any combination. As of now, we've not firmed out what trajectory we will go.

Sure. Thank you, sir.

I have one more question, if I can ask, on the competitive landscape. Given that the AI deployment is growing multifold in the domestic Indian market, how have you seen the competitive environment?

Has it intensified, domestic, foreign players, or Netweb continues to have a dominant share in this space? If you have any inputs on the market share, that would be helpful.

Thank you.

Basically, on the competition, numbers speak actually, really speaking. You can see basically how numbers are speaking.

Basically, 62% of revenue came from the AI sphere actually. At this point of time, I'm very proud to say we are shipping the highest number of the large GPU deals we are trying to do.

Primarily, as we don't target the volume kind of thing. We don't do any box selling.

We primarily try to focus on more and more solutions. Basically, the focus will remain intact, and basically, since because of our strategic relationship with our technology providers, we are very well placed so as to handle any competition.

We were earlier also placed, and now also we are placed. In this situation, we definitely have a end-to-end design, and since we do the complete hardware, software design, and manufacturing, so that kind of offering definitely helps us to keep our competitive advantage actually.

Thank you.

Thanks for taking my question. Can you share So, there has been a new order disclosure which you shared which includes the strategic order.

Just for comparability purpose, can you share either what was this number, the pipeline, L1, and the order book in the last quarter including the strategic orders, or perhaps ex of strategic orders, what what are these numbers in Q1? That will help investors in terms of comparability.

That's the first question.

We'll take all your second question and then answer together.

Okay. If I'm not wrong, this quarter also had some strategic order execution, yet our margins have increased.

I want to understand what has led to this. Is it the case that because of inventory build-up, we were able to price slightly higher because we had memory chips already bought at a lower price, or what drove this?

I will take the first one first. If you look at the order pipeline which we have released this year, it is upwards of 10,000 crores.

Now, as we had been guiding that we are not guiding for the strategic order and we will take it as it comes. That was because if you go back a year, year and a half, this whole AI Mission and large AI orders were evolving.

As we reflect and as we have gone through this cycle for the last one year, we believe that this is something which now is as a part of our normal business. We do not want to segregate both of them.

This includes all kind of pipeline that we have, whether it's AI, whether it is HPC, etc., etc. This is how we're going to report as we go forward.

It gives better clarity to the market as to what is the overall business that we are chasing, and that's the reason we have now started to reflect the entire pipeline into our pipeline pool. That's how it answers the first question.

The second question, I will The second question basically on the margin front. Basically, I will try to answer it, and Ankit can add on that.

Basically, if you really see, the margins are very well within our guidance range actually. We have always been guiding since basically it has been very stable actually.

We have been always been saying that our margins will remain between 13% to 14%, and basically some basis point up and down is always possible because it cannot be controlled to that level actually. Still, basically, it's a very, very delighting fact that still when the turnover and company is growing at 90%, still we are keeping our margins intact.

Basically, it's very much within the guiding range. There is no question of some memory pricing or something because basically we have the pricing power.

We price, as I have been always been mentioning, that we price our products very well to our customers and we want to price our products appropriately so that we show value for money to our customer. It's not that today if memory is or something some kind of scarcity is there, we increase the price or something of that nature.

That's not the tendency of the company. The company has very clear mandate to basically show value of money to the customers because if you see the repeat customer revenue for us is phenomenal.

All customers are associated with us for many years all together. The kind of trust and relationship which we build our customers is really very high.

For that, we have maintained that. In that line, I will still keep on guiding as I have been guiding, if you see our reports for last 3-4 years, you will find the margin in the similar range, and it will remain in the similar range.

Fair. Just I think in the first question I also mentioned if you can share the comparable number of what was the pipeline and L1 and the order book including strategic orders in the last quarter, at least we can compare, has the pipeline grown on a like-to-like basis, has the L1 grown on a like-to-like basis?

That's it.

Of course it has grown, but I don't think we have that number handy at this point in time because we will have to then go back and churn it out. I think it's already there in the public domain.

Last year's last week last quarter's data. What he's asking about is he's saying that So, our pipeline was 44 4,400 crores without the strategic.

Now, it is merged. Obviously, it's grown, but we don't have the exact number of the last quarter sitting here.

Thank you. Thank you.

Hi, thank you for taking my question. Congratulations to the Netweb team.

Sanjeev ji, my first question is around your incremental addition to your pipeline. It would be great to understand break-up of the incremental addition to the pipeline that you've reported between government versus private enterprises versus some of these neo cloud companies that are your customers.

Which of the engine would you think is firing the most, and is this mainly coming from your existing customers, or do you expect to onboard any new large customers through your pipeline? The second part to that question is, in the past you've generally indicated that you expect to convert about 55%, 60% of your pipeline in a span of about 18 to 24 months.

Does the current pipeline also fit in that plan? I have another one, but yeah, I'll first

Yes, basically I'd like to tell you one thing. We avoid basically because pipeline is something very, very confidential to the company because these are prospective orders, okay, and basically for competitive advantage reasons, we'll not like to disclose too much actually.

That's very clear. We should basically respect the confidentiality of the company because it serves our business interest.

Basically, I would not like to disclose too much details about the pipeline. This pipeline is still a pipeline.

As regards your second question, I would like to give you a very good comfort. The factor which I have been always been guiding that 60% conversion ratio, still I will keep on guiding that.

Once you see the pipeline growing so much, still I'd like to guide you that basically 60% of this pipeline is expected to get converted. The dynamics of our own having basically and case into the pipeline remains the same actually.

I think that answers your question.

Understood. Great.

That very well answers it. My second question, Sanjay ji, is some of your existing marquee customers on the private cloud side, let's say, for an example, in HCL, they have recently announced that they will also be setting up AI data centers with capex planned on their own books.

We've obviously heard some of these more examples coming from these larger conglomerates. The ecosystem in that manner appears to be expanding.

Would love to hear your views on what's your go-to-market strategy for some of this work? Do you think they will prefer the OEM route more, or they also have the option to go to box sellers with their own design?

Where do you think they will tilt more is essentially what would really help us gauge that demand bit. Thank you so much.

Basically, on specific deals, I will not like to talk about, but primarily I'd like to tell you, all this is very interesting times actually, really speaking. You see, and that has been reflected from last two quarters of the growth which my AI segment is showing actually.

At this point of time, the completely in-house design and basically our software stack and everything is adding a lot of advantages. Definitely, we have a competitive advantage while we're placing in front of a customer, and customers are recognizing that, and customers are really adopting our solutions more what they were doing earlier even.

That is there. The worldwide demand of AI compute is phenomenal actually at this point of time, and as it looks like that basically at least for next 1.5 to 2 years, it will remain the same.

Basically, the most important thing which we should not ignore and which we should look into is the India demand for AI. Basically, what is happening, the whole world is looking for data centers to India today.

You see all the large cloud providers, everybody wants to come and set up data centers in India actually for doing their AI workload and different kind of workloads. All that works very positively for the country, and if you really see, more than the compute, the data center equipment is in the shortage actually.

Data center equipment means the rack, the chillers and all those things, the mechanical things are getting into shortage. That itself is a great indicator how this industry is growing.

Basically, I think we have a very robust pipeline, and all these are really good opportunities which you mentioned. Definitely, we will have our share in them.

Understood. That's really helpful.

Thank you so much, and congratulations once again.

Thank you.

Thanks for the opportunity, and congratulations to the whole team. Sir, the first question, you answered that in terms of conversion of pipeline even with the strategic order included would be closer to 60%.

Whether the timeline to convert gets further extended, because strategic order could be bulky deals and the decision-making could be slightly slower versus the normal deals?

Thank you, Sandeep ji. Basically, your question is very relevant.

The tenure basically normally we used to say 18 months, but basically it will remain 18 to 24 months, but not beyond that. Okay.

Sir, even in this year with the robust increase in the order book, you believe 1H would still contribute 35%, 40% of the whole year revenue, or you believe the ratio could be more or less similar in 1H and 2H?

I think, yeah, you answer it.

Sandeep, slightly difficult to say because, we are executing some of the large orders, and you know that the difference between something falling in one quarter to the next quarter is a day. If you're trying to ask me to project on a day's decision, it's very difficult.

You've seen the pipeline and you've seen the L1 you've seen the L1 and order book, I think you can decipher the full year, and I think that should be more important. Okay.

Sir, looking at the raw material prices and the memory prices, the GPU, CPU prices, as supply chain management issues because of geopolitical issues, you believe there's still these things normalizing? We may need to have 100, 110 days of inventory on a going-forward basis.

Sandeep ji, on the inventory days, the inventory-led approach has actually acting as a hedge, not a risk, first of all. Maintaining the inventory days is actually helpful to cater the strong order book what we have.

As far as the memory prices are concerned, we do not see it softening in next couple of quarter or maybe year so.

Sandeep, just to answer your question, obviously, it has kept us in good stead that we have been able to stock up, and there's a very strong pipeline, and obviously, we would like to maintain the inventory levels.

Plus basically, please, as I have always been mentioning, our business is very predictable. Please understand that.

We are not into box business. Basically, I know what's going to come.

Basically we are not reactive on our orders. Okay.

We are able to advance plan very well actually. That really helps us to keep our margins intact, and basically these price disturbances definitely I will not like to say that this doesn't impact us, but we are able to handle them much more better.

Fair enough. Just the last question.

Globally, enterprises are also evaluating using Chinese open-source models to optimize their token cost. I do agree it is too early to predict this for the Indian enterprises, but could that lead to delay in decision-making for enterprises to order AI-led servers because they may be evaluating which kind of a Blackwell chips to be ordering and optimizing the token cost?

Any color on a medium to longer term in terms of any delay in decision-making?

Sandeep ji, thanks for the question. Basically, I tell you that emergence of Chinese foundational players or let's say the other US players, the emergence is only widening the horizon of Indian foundational model landscape in the country, and that is ultimately or eventually driving the growth in the country in terms of AI systems or AI adoption.

I would say that this whole exercise, which is going on across the world, this is helping sovereign models to first of all build as part of the regulatory actions by the country, which is ultimately leading towards the adoption of more AI systems. I think this is only emerging as an opportunity for us.

It is nowhere acting as a threat to us. I think we are welcoming whatever is happening worldwide.

We are welcoming all this, and I think this is going to have a very good reflection on the Indian market as well.

Okay. My last question, if I can squeeze.

In terms of AI sovereign demand tailwind, you were earlier mentioning it has two legs. One, the demand coming from cloud service provider, which we have started witnessing some traction through order wins.

The second leg coming from government as a customer. Whether that second leg also started forming part of the deal pipeline and the order book?

I think as of now, we can only say that the pipeline that we have is a very strong pipeline. Definitely the thing you have mentioned that the on-prem procurement activities by the government, so that has already been taken care of by us in our pipeline.

Answer to question is yes. I think we are very well placed for both the streams of business.

Whether it is coming through CSPs or for the on-prem part, I think we have taken care of it very well. We are fully prepared for it.

Thanks and all the best.

Thank you.

Thank you.

Hi, sir. Thank you for the opportunity, and congratulations on a great set of numbers.

Just a couple of things. One is in terms of L1 plus order book, the number is about 3,400-odd crores.

Now, typically you have always mentioned you execute this over 8 to 12 weeks. Is that the correct understanding even so now?

Basically, 8 to 12 weeks was earlier. Now, we are mentioning basically 16 to 20 weeks.

That's the kind of guidance we would like to give, but it can stretch a little bit or can be early actually.

Okay. That is very helpful, sir.

With R&D, you have mentioned on physical AI and quantum computing, obviously these are much larger opportunities. What kind of expenditure could go here in terms of percentage of revenue?

What kind of quantum are we looking at from this perspective?

We are not guiding on revenue at all, these are the new opportunities which we are talking about, and Hirdey will answer the rest.

Basically, your primary question was this only that when do we see the revenue or what percentage we just see coming from these two verticals. We are very clear that we are right now not liking to basically guide about it.

I think we have entered into these two verticals with a clear thought process because the products are quite relatable and we have got some offerings which are going to make us fit into these segments. That ways we are gearing up and we are prepared for venturing into these two verticals.

That much we can disclose at this moment.

Okay. My question is more about what kind of cost are we putting to R&D, and is any quantum or anything which you can mention which anything guidance on what kind of money is going into it?

I think that will be helpful.

Basically, we are not quantifying it actually, Vinay ji. The thing is that basically primarily we have a huge R&D team now.

Basically, around 125 people are there into the R&D team, very usually focused. Basically, again, these are logical extensions of the work we are trying to do actually.

Physical AI is also basically very, very relevant what we're doing. It's a logical extension.

Slowly, you will see the results also, and investments we cannot quantify at this point of time.

Fair. One last thing is, are we working with any Indian companies on the LLM side because with Chinese models coming up, do we kind of anticipate Indian models maybe in the next 3, 6 months, and are we working with any of them on those kind of projects?

The good part is that some of the largest players in the country, they happen to use our systems at the back end. That much we can disclose, and we take pride in that we are able to build the AI backbone of the country, using which these kind of players on which India is also driving their AI journey.

They are ultimately using our infra at the back end. That much we can share with you, and I think that's how we are serving them, and in future also, we have plans to serve them in many ways.

Okay. Thank you so much, sir.

Thank you for taking my question. All the best.

Thank you.

Thank you.

Hi, thank you, sir. I actually had a couple of questions.

The first on the component inflation that we are seeing in memory and other components that are going on in AI, and how has that played a role in revenue acceleration for this quarter, and how has that affected both margins and working capital?

Basically, I cannot say that these things doesn't impact us, but telling you very clearly, as I have been mentioning very clearly from day one, that we are not reactive players. Basically, we is a very predictable kind of company what business we do.

We take our time basically to close our orders and all those kind of things are there. We know what is going to happen.

Accordingly, we are able to plan better. Plus, the direct technology relationships which we have our technology providers, that also helps us to enter into long-term contracts and to basically secure our pricing and all.

In case any new order which is being talked about, the pass-over for the pricing definitely happens. Basically, there is very minimal impact which company tries to take from these price increases and all those kind of things as that is there.

The second part of the question Ankit can answer.

Along with this, there is also a shortage shocks which is going through the industry. For that, we definitely have to have the inventory in hand because this actually helps to do the delivery execution on the right timing.

That is why the inventory days have been deliberately taken as a decision, it's not a drift of increasing the inventory days.

Right. Quick clarification, given how memory prices have increased over the last few months, when you all would have taken a particular contract, has it kind of been a pass-through or you all would already have that as a back-to-back arrangement before you all kind of sign on a contract in order to deliver any of the three offerings that you all have?

Rohit, I think we've answered this a couple of times. I don't know when you joined this call.

We clearly said that this is a predictable business and the planning of what order we receive happens long back, and for the existing orders, we already have orders in place. There is no question of a significant change in the costing on what we've got order on and what we are billing.

For future, obviously, when we bid, we bid on the basis of current prices. I think this is a very well established situation, and we answered this in one of the previous questions.

I hope this clarifies.

Plus basically, you might have seen our margins are not impacted actually. Had our margins got impacted, then you could the question of whether the memory price has impacted us.

You have the testimony in front of you actually, really speaking.

That's actually very commendable because it actually shows it's not actually a simple pass-through, right? Because if you're actually getting a margin, it's kind of either constant or actually increasing despite the price increases.

That's commendable, and which is what I kind of got the question as to how are you able to make that happen.

Basically, I would like to again clarify that we are not overcharging our customers. We are pricing our products very, very appropriately.

We are not taking advantage of the situation and trying to overcharge our customer. If anybody have that intuition, kindly clear that.

There is nothing of that nature. Because

every order, every quarter's margin cannot be exactly the same. This is not a consumer product, right?

There will be differential in margins, but what is more important is that we build our cost, we predict our business, and accordingly, we plan our supply chain. That's very, very important.

Right. Maybe another question in terms of just the availability of some of the components, especially on the AI leg.

Do you all see any risk on the execution, if at all? Have you all seen any of that in maybe not in the last quarter because you all have grown so well, but is that something that is a risk for the forthcoming quarters?

Actually, people have got used to this scarcity actually, really speaking. This scarcity is not a new thing now.

Basically

we have been seeing it for a couple of years now. Recently, since last few quarters, the scarcity is increasing, but definitely that has made us much more basically, I think much more matured so as to plan better.

If you're planning better, I think and since we have direct relationships with our technology providers and we basically do manufacturing ourselves, we are in a better supply situation than others. Hence, we are able to sustain this and sail through well.

Got it. Thanks a lot.

That's all that I had, and wish you guys all the best.

Thank you. Thanks a lot.

Hi, sir. Congratulations on the great set of numbers.

Sir, my first question is, recently, we had the exchange feeling of 1,200 crore QIP. What is the rationale for 1,200 crore QIP?

No, I don't know where you got this news for the QIP. I haven't seen anything like that.

There was an enabling resolution which we took to raise capital if need be. It has a validity of 12 months.

Having said that, for the growth, if at some stage we think we need to raise capital, we'll look at it.

Understood. Fair enough.

Sir, my second question is about the future growth areas as per the presentation. What are we developing in the physical AI and quantum computing, and when can we see some meaningful development on that front going forward?

See, thanks for the question first. As we have clearly mentioned that these are the two areas of the product lines we are venturing into.

At this point of time, we are at the liberty to disclose this much only. Yes, as you have seen in case of the other product lines also, we have always been very serious and consistent about our efforts with respect to each product line.

Same goes with this case also for quantum and physical AI. We have started putting in our efforts, our R&D efforts and all.

I think in coming quarters or you'll start seeing the results coming. For now, this much information can be shared with you.

Fair enough, and all the best.

Thank you.

Hello?

Hi Mansimar.

Hello, sir. Sir, in May concall, there was 1,600 crore of strategic order as mentioned in the PPT.

Can you please tell me how much of that 1,600 crore strategic order was consumed in Q1 this year?

Out of that 1,600 crore strategic order, close to 430 crore was executed in this June quarter.

Okay. My second question is with regard to our funding.

We are fundraising 1,200 crores, right? Will there be such more fundings going on after that?

No, first of all, we haven't raised, there's no question of furthermore. We've taken an enabling resolution, we have a very strong growth pipeline.

If and when we need to raise capital, we'll raise capital. It's just an enabling resolution which is valid for 12 months.

I think beyond this, I don't have anything to say at this point in time.

Okay. Thank you, sir.

That's all from my end.

Just wanted one clarification. First question, you said that you don't have anything to say on the enabling resolution which you have taken, but at least you can tell us at first place, why did you take that call and what it is for exactly?

I gave that answer. If you've seen the pipeline and the order book that we have.

It is possible that in order to pursue that growth, we may at some stage need capital. Which form of capital, whether it'll be debt or equity, we've not decided.

At that point in time, we cannot suddenly raise the resolution and take the capital, we've taken an enabling resolution for this. At this point in time, beyond

Yes, please go ahead, sir.

That's it.

Is it for additional capacity expansions? Because you have already said that it is not certainly something which you are currently doing.

Then there must be some purpose for taking the enabling resolution

to It is for the growth. This is for growth capital, we will need working capital for growth.

If any capital we raise, it'll be for that only, for working capital.

This is for working capital, right? If you raise anything.

If we raise anything, it'll be for working capital, you're right.

Not for any M&A or something like that?

No, no, no. Not at all.

Not at all. Absolutely not.

This is only for working capital if and only if you decide to do it, right?

It will be largely for working capital, no M&A absolutely.

Okay. It's too early to ask about this, but whenever this strategic orders they start to fade away, how do you see realistically your growth numbers?

Or do you think it's too early to ask or they are coming

I don't think we have guided any strategic order separately. I think you must look at the current

There is no strategic order now. All orders are normal orders actually.

The strategic is the new normal.

For how much period do you think that will be a normal thing?

We don't know

that.

That's a very difficult question. We can tell you that this order pipeline and the order book is going to serve us for two years as we said, and it's very difficult beyond that sitting today to address.

Obviously, we would continue to grow.

We are very confident keep on growing.

Yes, absolutely.

The business discourse is also taking its own shape now. Basis on that only, we have started disclosing this way.

This strategic orders, you are saying they are the new normal ones? Already

whatever we had to say, we have already said that.

No, no, I'm asking just that These are the new orders, right?

You are asking what we've already answered.

Okay. Given the government's also focus on this, how do you see this sector in the coming years?

I know the huge potential, but if you can contribute something to this, it will be helpful. I think we have put up,

that's why we specifically put up the industry slide, and you can see the kind of growth that some of the sectors are looking at. At a very conservative level, I would say that they're talking about 38% CAGR at the national level, which is huge, which for the next three years, which the four years next four years.

There's a huge amount of headroom. The market is for people to capture.

Now, we'll have to strategize to capture it as much as we can. Okay.

This 38% CAGR for next four years, you're saying is for the entire category, you are saying?

It's for the AI.

Product line.

For the product line.

For the AI. For the product line, okay.

Rest of the product lines also, there is a huge headroom available for growth. We have clearly showed the figures for that as well.

Just finally, if you can answer currently everything is looking so rosy

Hi, thanks for the follow-up. This one is more on the bookkeeping lines to Ankit.

Ankit, it does seem like that the R&D effort that you've been putting in is generally expensed in our P&L. Just wanted to understand what's the typical consideration that goes behind expensing it versus capitalizing it, because do understand that software for us is definitely our moat.

Why not capitalize it versus expensing it? Just your thoughts on the consideration.

Thank you.

Yeah. Jatin, as you know that we have always maintained this policy of not capitalizing it because we do not want the balance sheet to have any kind of fictitious assets.

Because the R&D has been expensed off since day one of the company, and there are a lot of factors which goes in R&D. We cannot quantify it properly, but yes, there is a team of 125 people in the R&D.

They continuously work on that area. Along with that, they are testing labs, there are a lot of equipments which goes into the R&D.

All these considering that fact, we do not capitalize because the R&D evolution is very fast, and that is what we had been maintaining.

I will just like to add here Jatin, you understand that there is a huge amount of technology upgrade which happens every time, and we continuously invest in R&D. If we start capitalizing it, the balance sheet will become bloated, and at some stage, some of these R&D will convert into monetizable business, some will not.

I think it's a great thing that we are not capitalizing it. Believe me, the investors love it.

Everybody loves it, and we want to be conservative as we are on our guidance as well.

Perfect. That is really clear.

Thank you so much.

Hi, sir. Thank you for taking my question, and congratulations on good set of numbers.

I noticed that certain balance sheet numbers for your prior period has been restated. Could you explain the nature of these changes, whether they are due to accounting change policy, especially if you see net debt?

Secondly, also could you help me understand the expected conversion timeline of 104 billion the billion rupees pipeline, specifically what portion of that you expect to be converted in FY27 and FY28?

On the first question Regarding the balance sheet, there was a restatement on account of the inventory policy. We shifted our inventory valuation from FIFO to the moving weighted average method.

That is to actually get in line with the proper policy of maintaining the inventory going forward. That is there.

Sir, second part

kya? Second Second part I will answer.

Second part Second part is basically, I already answered that question. Whatever funnel you are seeing total, that the conversion cycle for that will be around 18 to 24 months.

Basically, we have already given you the order book which will get converted as indicated. We cannot guide what portion of the funnel will get converted this year and all that.

That is basically, but the guidance which you would like to give is the funnel will basically conversion rate will be around 60%, and the conversion time will be around 18 to 24 months.

Sir, and lastly, can you give a broad breakup of your funnel across AI system, HPC, and Cloud business? I basically wanted to understand that AI system share of pipeline has increased materially over the past few quarters, or how is it?

What you're saying is right, but basically, since all our customers are very well integrated, all our solutions are very well integrated, it's very difficult at this point of time to give segment-wise funnels.

Thank you. Thank you so much.

Thank you.

Good afternoon, sir. Thank you for the opportunity.

Sir, my question is with a caveat. It's a little bit of forward-looking in nature.

Sir, what we are reading these days is that companies First of all, it was state who was worried about their data sovereignty. Now the individual companies are also worried about their data and the legacy data which they are carrying on their systems.

They are like that now the market is talking about small language models or maybe something of that type. Don't you think, sir, our order book is going to go through the roof what I'm not putting much premium to it, but future is all about loads and load of that order data will also increase.

Don't you think, sir, future is all ours in matlab someone because I wanted to know from you because you are in the position you are in the market, so that is why.

Whatever you are saying is music to our ears, no doubt about that, and more than that, I would not like to comment anything more.

Sir, last time, sir, you told that exports are 4% to 5% of your contribution these days. Sir, what is the future, sir?

Are we looking for it, or our hands are quite full now?

See, domestic demand is phenomenal actually. Okay.

First, the idea is to service the Indian customer. We have that.

We'll definitely do that first. Then only we look at exports.

You're seeing our growth. You're seeing basically whatever we are guiding, we are overperforming from that.

Basically, you can see the market is going, and the India needs the AI systems, Indian service providers, Indian LLM providers, Indian SLM providers, all of them needs that. At this point of time.

Hence, basically, I think exports is we are not focusing on exports actually. Okay.

Thank you, sir, and sir, best of luck for the future endeavors. Thank you.

Hello. I'm sorry, I was speaking on mute.

Good afternoon, everyone. I was looking at the ethernet switch portfolio of the company, and there are two switches right now based on the Broadcom platform that have a maximum port bandwidth of 100 gigabits.

The first question I wanted to understand was how is the demand for the switches in India basically for maybe higher bandwidths and maybe the NVIDIA Spectrum ASIC? Secondly, what is our product development pipeline for these switches now?

Basically, as the company's objective is not to sell boxes. Basically, we have stopped our focus on selling switches independently.

Switches definitely we are in line with the market actually with the current high-bandwidth switches, but we are trying to use it in our own solutions. Hence, we are not disclosing it as a separate basically product SKU on our basically where our product details are available.

Definitely you are right. The switching is an important component, and basically, we clearly know that, and all these solutions which we are selling like GB300, B300, and all, all are based on the latest architecture, and primarily, the switching is very important, and we are already selling those switches in our solutions.

Sir. Thank you.

Thank you so much.

Thanks. Thanks a lot everybody for taking out time for this call.

Really appreciate, and wish you all the best.

Thank you to ICICI Securities also for organizing this call so well. Thank you, Seema ji.

Thank you.