Q1 25/26

Aug 13, 2025

Summary

Q1 revenue fell 3% YoY as equipment delays deferred project work, while EBITDA and PAT rose. Management maintained FY26 margin guidance and targets $1 billion in orders and $700 million in year-end backlog, with revenue momentum expected from Q2.

Ladies and gentlemen, good day, and welcome to the Q1 FY 2026 earnings conference call of Black Box Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the companies as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sanjeev Verma, Whole Time Director and CEO of Black Box Limited. Thank you, and over to you, sir. Good morning, everyone. I hope you are all doing well. On behalf of Black Box Limited, I would like to welcome you to our Q1 FY 2026 earnings call. I will start with an overview of our business performance and then our CFO, Deepak Bansal, will walk you through the financials. We have already uploaded the results presentation, and I hope you had a chance to review it. It is great to connect with all of you again. Over the past five years, we have transformed Black Box from a loss-making entity into a profitable cash-generating business with a strong balance sheet. With the turnaround complete, FY 2026 and onwards is about accelerating growth, scaling revenues, and capturing market leadership. While the year began at a slower pace, we have seen solid traction in key accounts and are actively engaged in multiple high-value opportunities. This quarter, we retained the order booking momentum similar to Q4 FY 2025 and booked orders worth $176 million, with most of the deals, nearly two-thirds, being high-value deals. Some of the notable order wins during the quarter included a very large project in the U.S. from a leading financial services giant, as well as a workplace solution engagement from one of the world's largest OTT player for their operations in Latin America. The company also secured two significant data center orders in the U.S., one from a global hyperscaler and another from a top-10 global colocation provider. Other key wins included a workplace solution project in the U.S. for the top-tier city transit authority, a combined connectivity infrastructure and networking order from a prominent public services organization, and a large networking deal from a reputed 200-year-old research university in the U.S. Our backlog at the end of Q1 FY 2026 was at $518 million, up from $504 million at the end of FY 2025. We are confident of reaching $700 million of backlog by end of this fiscal year. We are also targeting to book orders worth $1 billion in FY 2026. As mentioned by us in the previous quarter, our order book will continue to grow as we implement our new GTM with experienced leadership and business teams now in place across verticals and horizontal solutions. This will set the stage for FY 2029 target to reach $2 billion in revenues with an expanding order book. Strategically, we continue to reduce our long-tail low-value accounts, which has reduced to less than 1,000 at the end of Q1 FY 2026. We expect demand for our services to remain strong, with a sufficient headroom at the back of AI-led overall growth, which will require refreshed new deployment and retrofit of technology infrastructure. Backed by our solid market positioning and proven capabilities, we are confident in achieving our growth target for FY 2026. With that, I now hand over to Deepak, our CFO, for the financial updates. Thank you, Sanjiv. Hello and good morning, everyone. As you would have seen, revenue for the quarter stood at INR 1,387 crores, down 3% year-on-year, impacted on account of client-driven delays in equipment procurement due to the ongoing tariff situation, which pushed out revenue recognition and affected operating margins as well. Given the focus on getting large size of orders and our focus on high-value customers, the average lead time from order receipt to first revenue recognition is now extended to around four to six months. Hence, you will see revenue increase from our robust order bookings only post Q2 of FY 2026. There is also a small impact from the reduction of the long-tail low-value accounts. EBITDA for the quarter grew 1% to INR 116 crore compared to Q1 of last year, essentially remaining flat. While EBITDA margin improved by 30 basis points year-on-year to 8.4%, they were lower compared to Q4 of FY 2025 due to lower fixed cost absorption in quarter one. Fixed costs generally would range around INR 310 crore to INR 320 crore per quarter. Fixed cost absorption will be better in the coming quarters as revenue increases. Our guidance of 9%-9.2% EBITDA margin in FY 2026 remains intact. Profit after tax rose 28% year-on-year to INR 47 crore from INR 37 crore in quarter one FY 2025 with margins increasing by 80 basis point to 3.4% year-on-year, primarily driven by a reduction in exceptional expenses and lower taxes. In summary, we delivered year-on-year growth in both EBITDA and profit after tax, highlighting our operational efficiency and margin resilience with a strong order book, healthy cash reserves, and a reinforced go-to-market strategy. We are confident of delivering on our growth ambitions for fiscal year. I would now request the moderator to open the floor for questions. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Deep Shah from B&K Securities. Please go ahead. Yeah. Hi, good morning. Thanks for the opportunity. So first question is on the commentary that you gave that revenue growth was impacted due to delays in clients' equipment ordering. This is unlikely to change in the near term, right? So what gives us the confidence to stick with that guidance? Because the revenue guidance effectively implies that an 18%-19% kind of growth is needed in the balance nine months of the year, to achieve our 2026 guidance. If you could just give some more context, that would be useful. Yeah, I will take that. Yes, in the short term, I think with some of the ultimate uncertainties still prevailing on tariffs, we expect there will be some delays. Some of them are baked in because from a backlog perspective, it is cyclical in nature. So if it was two months, it is now three months or four months time. We expect it to ease post October, hopefully, but we are not sure. Having said that, I think currently we are looking at where we stand in terms of order backlogs and our burn rate. We expect that the burn rate would be better because we have baked in last three, four months of order book that has come through that has not gone into revenues. Also our pipeline currently as we stand today, getting into the middle of quarter two is much robust. We expect our order book to continue to rise as we get into quarter two. It is impacting our revenues positively for quarter three and quarter four. It is a kind of a cyclical coming at the back. To answer your second question, we expect our revenue outlook momentum to track between 15%-20%. In fact, order will track more than that going forward each quarter from here. So we have still remained positive with respect to our guidance as Deepak alluded with respect to also EBITDA impact and also from an order book perspective of exiting the year closer to INR 700 crores. We are currently at INR 520 crores odd. So we remain robust. The work that has gone through the last five, six months, starting our order backlog this quarter, getting into next quarter, we understand we need to track at least 15%-20% and we are positive that we will be able to deliver that. Right. This is useful. Second question is for Deepak. Deepak, in our press release we mentioned EBITDA of INR 116 crores, but if my understanding is correct, this includes INR 11 crores of Forex gain. Is that understanding correct? Yeah. There are three type of Forex normally in the business. One is that which is on a translation side of it that passes through the OCI, which doesn't hit the P&L as such. The second type of thing is a cash flow hedge, which is when you hedge your currency for different moments. On that, it comes under the line below the EBITDA. The third type basically is when we have the inventory because we deal in multi currencies. We deal in almost like 19 currencies in our operations overall. On that, when we have the inventory accounts receivable and accounts payable and the consumption pattern and the revenue pattern on that happens, and primarily that happens in our product business and all those things. Every quarter when you book it on a transaction level, there is a currency difference every day which happens depending on that. That is if you see consistent every year, it can be positive, it can be negative every quarter, every month and all those things. That is part of the EBITDA only because that is an operational related thing. Because of the accounting GAAP requirement, we show it as a different line item, but otherwise it's related to the operational thing, which impacts our inventory valuation and our accounts receivable and payable when the customer pays the money or we pay to the vendor, or when we consume the inventory, when we sell the inventory. Right. But Deepak, it is really difficult to forecast this number, right? When you give your estimates or guidance for 2026 or for any year, should we think that this guidance that we have given of 9.2% margins is exclusive of all of these impacts? Because as you said, right, that it could be positive in some year, negative in some year, and it is not really in our control. No. You are right. Technically, the currency is not in our control. The planning of the inventory and the planning of the receivable and payable is in our control, and that is how we plan. So this quarter, when we saw that the currency is going in the right direction, we planned our inventory to consume in a way that we take benefit of that. It is in our control to plan that, how we are consuming, from which country and which currency we are passing on that inventory to consume. That is why it becomes more like, because that is the real money which is coming. It is not like that is just an accounting thing. It is a real money which flows us with respect to the collection or with respect to the inventory consumption in terms of the margin. When we forecast this 9.29%, that includes some of these strategies. Because in the business, you apply all these strategies when you are delivering the material to the customer or anything, where you will try to do all these things. When the currency is going down or something like that, then also you will do a different type of thing. You will consume the currencies. If I have a material sitting in a Switzerland warehouse, I will sell that if the Swiss franc is doing better than the euro. Right. Understood. Just one more follow-up. This quarter, we saw some 40% increase in purchase of stocks. Anything to call out here, or it is just a timing difference? It's a timing difference. Because we continue to purchase the inventory and sell. Because of the tariff things on our TPS side of things, we little bit purchase more to basically store the inventory in U.S. to reduce the impact of the tariff because on the China goods, whatever we have purchased in Taiwan also because Taiwan, when they put the higher duty initially, we ordered the material to come in advance to consume in the next quarter and all those things. But now Taiwanese duty has again come back to the lower levels now. As such, there's not much impact on that. But we are planning basis what is happening right now on an uncertainty type of thing. Understood. This is super useful. All the best. Thank you. Yeah. Thank you. Thank you. Our next question is from the line of Abhishek Kumar from JM Financial Limited. Please go ahead. Yeah. Hi. Good morning, and thanks for the opportunity. I have a couple of questions on your outlook only. First, I just wanted to understand when you say that you expect $1 billion of order booking in FY 2026, is it corresponding to the $176 million inflow that we did in Q1, that cumulatively you expect to reach $1 billion in FY 2026? That is correct. Basically, as a cumulative order booking for the year, starting at 176, when you track 200, 250, 300, we will get a cumulative of $1 billion for the year. You are correct, Abhishek. Okay. That is very encouraging. And you have mentioned $2 billion-plus pipeline. That means very strong win ratio for us to do that. So we have the visibility, the positioning that we have in terms of where we stand in those deals today to hit that billion. What is giving us the confidence that out of $2 billion pipeline, we can hit $1 billion? $2 billion is a point in time. If you consume or you burn or you pick up orders for $200 million, you have to replace it by pipeline. So the pipeline should actually grow from 2 to 2.1, 2.2.5. It is a point in time. It is taking into account that what will burn, which is what we will win. That does not mean that we have $2 billion static pipeline. After you get $250 million worth of orders, it should replace that through a pipeline. So it is absolute number that should remain constant or move up, basically adding. If you look at from a percentage win ratio, I think we have a significant pipeline at a given point of time corresponding to a quarter. If you are looking at $250 million, you are looking at 12%. So it is a very heavy pipeline. Of course, all of them will not close in this next nine months. Some are longer lead times. But a robust pipeline, the current engagements on larger deals combined, and our ability to continuously improve the pipeline through the go-to-market transformation that we are doing, we are seeing good engagement. All put together, we believe, we are confident of an absolute booking of $1 billion, exiting $700 million of backlog. We think we need to move the backlog from the current 520 range as we move forward to open a better backlog so that we start the FY 2027 with a better note. Okay. Second, I think it is mentioned that now because we are chasing larger contracts, the lead time has increased to four to six months. I think this is the first time we have mentioned this. Does that mean now that the orders that we have won recently, the conversion or the revenue recognition will only happen in the second half, so therefore, we might have a soft Q2 as well? We expect our Q2 to be much better than Q1. We already have a backlog which is delayed burn, so we will impact all of that in Q1. Otherwise, it could have been even better. We expect the Q2 to be impacting, and the orders that we are booking as we speak will impact probably Q2 going back to Q3. It will just continue to push forward. But no, we expect Q2 to be much better. Understood. I will come back in the queue. I had another question, it just slipped my mind. I will come back in the queue. Thank you so much, and all the best. No problem. Thank you. A reminder to all participants, anyone who wishes to ask a question may press star and one on their touchtone telephone. Our next question is from the line of CA Garvit Goyal from Nvest Analytics Advisory LLP. Please go ahead. Hi, good morning. Am I audible? Yes, sir. You are audible. Yes. Please go ahead. Sir, my question is on the tariff front only. I remember in last quarter we spoke on this topic, and you mentioned that you will be having a limited impact as far as the tariffs are concerned. And you cited that most of our revenue model is based on some on-ground services. And secondly, our OEM products, that too will not be affected much because these are getting purchased locally. So what is the scenario now? Why we are saying in this quarter our revenue is getting affected because the customers are delaying the purchase on account of the tariff environment? I am not able to understand this thing. Can you please put some color on that? I will take it and maybe Deepak can allude to that. When we said the tariff wouldn't impact us from a perspective of our margin and profitability, I said because it is a pass-through for us from product side. I think it is not going to impact or if it costs us more, I think we need to pass that. That is a take on that impact of tariff. But from a customer perspective, his cost of purchase is going to go up. There is a delay for larger projects, which includes some products. Of course, we are largely services-led to make a decision on certain things. We are expecting the tariff for some countries to become better. That is on the customer side. We are a small part of the customer overall CapEx. They are having a delay in their overall CapEx. If they are building a data center, if they are building a large infrastructure like airports, we are part and parcel of the larger CapEx program. If they are delaying some decision-making, it is not because they are delaying only for us, they are delaying a larger CapEx. They are taking time to see whether they want to spend that money or they are impacting us on the other purchases. There is a general delay, not because of just our products or our tariffs. Two parts to this. The tariff is not going to impact us from a P&L perspective as much since it is a pass-through. The customer is considering a bit of uncertainty with somebody at 25%, somebody at 50%, somebody at 19%, just kept on happening over the month of July and August. Generally, the environment with respect to customer decision-making was largely impacted for overall CapEx spend perspective. Deepak, is there anything else? Yeah. So, you rightly told. So it's a macroeconomic type of situation there in U.S. right now. Let's say I have an order from a customer to execute a project, but that is dependent on two things. One, the readiness of the site, and the second is the availability of the equipment which is required to be deployed where our role will be there and that equipment may be a server or may be a networking equipment or may be cables or whatever it is where our technicians will be deployed to install, manage and all those stuff. Now, if the customer is not getting from their supplier or from OEM or delayed the decision because of a tariff uncertainty and all those things because there was a huge uncertainty on the copper tariff in between and because of that the people imported the copper slabs but not the copper wires and cables and because of that there was generally a shortage of the cables in U.S. which now has started coming up once the administration has come in with the clarity on that. Because of all that, the customers told us that because if there is no material to install then our technicians obviously cannot work there and all those things and because of that we cannot recognize the revenue and that's what I think is the project delayed and that's where the revenue recognition delayed. It is not like that we lost that. It is just the delay because then we will execute it now when the product availability is there and all those things. We have a regular engagement with our customers. We are working with them in terms of the revised timelines on the project and all those things and can we do some change orders with them, this is that and all those stuff on the background, all those things are going on. Understood. When we say Q2 is going to be better than Q1 and we are also maintaining our guidance but on the other hand tariff situation is getting worse day by day, right? No. I will say tariff situation is generally resolved other than India and because China is now extended for 3 months. Other than India, Brazil and few countries, the tariff situation is generally resolved. China is all stabilized now that China will continue to be at the current duty and all those things. I think I will say that the tariff situation is now far better as compared to the earlier. People have now almost like I will say 90% clarity in terms of what is happening. There is not much dependency in our line of business from our IT CapEx and all those things from India. From that perspective, I think there is more certainty now as compared to in the past. If India is going to face a tariff which is incrementally greater as compared to the other countries, don't you think people will be shifting to some other countries at least for the product part? In U.S., the import in the U.S. of the technology products which we are dependent on, whether it is all the OEMs, networking equipments and all those stuff, I don't think that India plays a very contributed role in terms of going to U.S. We don't work, obviously, on the cell phone devices. Cell phone devices from India in U.S., by the way, the duty is zero. From that perspective, all the dependency is on Europe. China, Taiwan is a major dependency in U.S. for our products, what we deal upon. From that perspective, those all things are sorted out. India duty will not impact us. Sanjeev, do you think India duty will impact us from the networking equipment perspective? No, it don't source. I think the license don't source from India is not a network equipment exporter. Yeah. I don't think it will impact that. Understood. As of today, we are pretty much confident about achieving the guidance that we are speaking about, right? Yes. Absolutely, yes. Any kind of risk do you see after the quarter, you mentioned this kind of risk occurred. Any kind of risk are you seeing right now which can stop us from achieving this guidance? All of the known risks from the past are baked in. The future risks, which we cannot see, we cannot see. Whatever we have at this time, be it tariff, be it some delays are baked in. Our pipeline, our current order book, our current order market motion. I think the main way we should get served in some other direction, which all of us do not know, then we do not know that. But leaving that aside, considering there is no other event that we could not answer. We are guiding for the entire question on that. Understood. You mentioned about the newer orders that we are targeting in FY 2026. Can you put some more color, like how much percentage of these orders are going to be from data center and what kind of timelines for these orders to be executed? Our ballpark range, our data center orders within the range of 20%-25% and a little back to that. We are slightly lower over the last couple of quarters on that, so that could be in that range. If you look from a perspective of overall a billion dollars, we expect over $200 million and somewhere in that range to be in that range. With respect to our project timelines, in general, depending when we book the projects, our average project timelines are between six to nine months time. So we will carry forward when we said we want to book that a significant amount of uptick with respect to our backlogs going forward. 80% of our business is outside of the data center. It includes networking, it includes infrastructure, modern workplace. This also includes our technology products, that is a Black Box product business. What is the size of orders you mentioned as an incremental order? The size of orders, I think we are focused, as we told before, for the last two, three quarters, we have been saying that we have been pivoting from Black Box from a very long list of customers, it is over couple of thousand, to focus customer, focus on larger deals because we believe that's where our focus should be. We are seeing that the contribution in our quarterly order booking pertaining to larger deals over $1 million, over $5 million is much more. As we move forward, we expect that to even go better. The deals with $10 million or more, $20 million or more. That's where the focus has been over the last several quarters, and we are at the right spot at this time to make a win across data center, across infrastructure, across airports, healthcare, in all the verticals that we operate. That's where we have been focused on long-term, larger deal, multi-year annuity. Those are the focus areas, and that's where we see our company heading towards. Good. Thank you very much, sir. Thank you. Thank you. A reminder to all participants, anyone who wishes to ask a question may press star and one on their touchtone telephone. Our next question is from the line of Jatin Deshpande from PKD Advisors. Please go ahead. Hi, sir. Good morning. Can you hear me? Yes, sir, you are definitely. Yes. Please go ahead. My first question was that the data center industry is going through a boom in the U.S., but our numbers aren't rising as fast. What is the reason for that? Also, last call you mentioned that the marginal decrease in revenue, one of the reason was that due to the rationalization of your client base. Is there any specific reason why you need to remove the long-tail clients before you add new larger clients to ensure that the revenue doesn't drop? Also, I'm assuming that tariffs has only come recently, so that is not the reason. So I will answer the first part and Taj will answer the second part in a little bit deeper. So the data center, of course, you see a lot of announcements in the data center. Between the announcements of data center and the time it goes online with project, there is huge lag. So I think if you see announcement of a data center for 2 gigawatts from the announcement to the removal of the dirt, by the time we get to do our work, there is a lag out there. In the last 6 months or so, almost 6, 9 months or so, we have reorganized our focus on the data center. We had one large hyperscaler client which we did not produce enough in the last 6, 9 months. Currently, we are sitting at a very large pipeline and win rate coming forward from that client. But more importantly, we have now won and gotten into other large global multi-location colo provider. We are also in active engagement. So the pipeline from a win ratio perspective, the relationship from that perspective, with other hyperscalers and colocation providers are much better. The closing of a deal for a hyperscaler for the work that we do is a long lead time. Once you get in, you stay for a long period of time as a partner. There is also a dynamics with respect to large hyperscaler as working in collaboration with large general contractors and customer, in this case, hyperscaler and multi-vendor approach. So these will make it little complex. So there is a lead time and lag time from when we start off engaging for larger projects, for the time we get to contracting, and by the time we start delivering revenue from the order book. So there is a time lag. So where we stand today, from our ability to see pipeline conversion, the line of sight is much better and therefore I said, we expect the revenue to send continuous movement both in order book and revenue going forwards. So that is one. The second question, and definitely Deepak will talk about margin. I did not get the question exactly, but maybe Deepak. I can take that. So on the long tail customers, we have already informed everybody that we deal primarily with the large Fortune 500 clients. In every vertical, what we have announced, we want to deal with the top, let us say, 100, 200 customers. That is where I think the biggest penetration is. We used to have more than 2,000 customers 2 years back on a long tail side of it, where the value of the deal, the engagement with the customer is a one-time engagement in the year or 2 times, or the value of the deal is between $10,000-$50,000 and all those things. The cost to deliver that customer was extremely high in terms of the overheads while the gross margin may look okay. But then the SG&A will be higher to deliver that, and that is why we took a conscious call to reduce our long-tail customers. So that exercise is going on. We will continue to see that now we have less than 1,000 customers, in fact, on that long tail thing. Because you cannot suddenly reduce everything, but we are doing a consistent effort to do that. And that's where I think, because last year total impact was between $16 million to $17 million of that on the revenue. This year, we are not expecting that much of impact. This year, the total impact we are expecting in the range of primarily $6 million to $7 million, which is already built in in what the guidance we have given, that is already built in in that. With that, I think our streamlining on the long tail orders will be over, let's say, on a consistent basis in the current fiscal year. Got it. That was helpful. And sir, can you help me understand your customer on the data center side? So do you directly deal with, let's say for example, Meta, or are you dealing with their vendors? Do you have any preferred vendor position with any of them? Yeah, that's a good question. So we deal directly with Meta, both from a contracting perspective and from an individual perspective. We also deal with Meta's large vendors, mostly master contractors in some cases. So Meta or any other hyperscaler for that matter, utilizes both channels. There are many sites they contract directly. There are many work that they contract with directly. If they're putting up a DAS network, they might contract directly. So in some sites, considering the nature of the site, the way they have contracted the master contractor could be a Bechtel or could be a Hochtief. Pretty much the way you build like an airport or a railway system, right? You might give it to Siemens or somebody else, and they become the master contractor. So they utilize both. So we have relationship with their master contractors that we work with. These are multi-billion dollar large master contractors. We also have to work directly, irrespective if we contract sometimes with a master contractor because that is what they prefer. But the design element, the discussion element is more like a tripartite. We sit in the room with all because each is interconnected. To answer your question, we have both kinds of contracts, directly delivering to Meta in certain sites, in certain geographies. For example, we do a large work for them in Europe. We contract directly in some sites in America, we contract directly. We also contract indirectly if that is what their preference is. Got it. Thank you. And sir, you have guided for a significant inorganic growth through FY 2029. Do you have any plan on how you are going to fund this? Are your internal accruals enough or do you plan to raise any debt or? I will give it to Deepak. Yes. For the organic growth, as such, because for the organic growth, we require just a working capital. That working capital we have the off-balance sheet facilities and I think we should be able to fund it through our internal accruals and all those things. For the inorganic activities, we may have to raise the debt depending on the situation and all those things because normally our philosophy on the inorganic acquisition is that we continue to look for suboptimal or subpar performance type of company which we can get at the lower price where we put our capability to transform those businesses and then we do some type of structure in terms of deferred consideration and pay upfront something and all those things. So right now, we are not envisaging that we will be enhancing the debt of basis debt. But if we find some good asset, which is a large size or something, and if we need to take that in terms of achieving our targets and we feel that that asset is transformable and we can transform it quickly and all those things, probably it all depends on the situation, on the inorganic growth, how that evolves and everything. Got it. Thank you, Zain. All the best. Thank you. May I remind all participants, anyone who wishes to ask a question may press star and one on their touch-tone telephone. Our next question is from the line of Sukrit B. Patel from ICICI Finsec Private Limited. Please go ahead. Good morning to the entire Black Box team. My question is to Mr. Sanjeev Verma. In the last con call, I believe you had emphasized a shift from stabilization to growth, targeting approximately $2 billion revenue by FY 2029. Just an extension to that question. As Black Box transitions from stabilization to growth, how are you thinking about evolving your engagement model with hyperscalers and large enterprises from being a systems integrator to a strategic co-innovator in areas like AI infra, edge computing or sovereign cloud? Are there plans to co-develop IP or enter joint GTM partnerships that could deepen wallet share and create annuity-like revenue stream for the company? Thank you. Yeah. The first part of the question, we are focused on moving from stability to hyper-growth going forward, and we are on the right path to be able to do that. As I called out earlier, we expect our coming quarters to gain velocity and momentum both in order book and revenues going forward. Specifically coming to hyperscalers. The world of hyperscaler is broken into two distinctive parts. One, of course, hyperscalers, they have built their own projects largely at the core. Largely, they build large mega infrastructures. And then, of course, there are various multi-tenant colo providers, which also build and support these hyperscalers largely at the edge. Which means they build in the cities, they build various sites for them and the likes of QTS or CyrusOne or others in that space also partner. In fact, if you look at India, many of the colo providers now are actually a wholesale provider to Google and AWS. The model that they started earlier was different. Now the consumption happens. Coming back to your question from a transactional provider to a strategic one, that is exactly what we are doing at this time, engaging with the hyperscalers that we have. Starting from building their core infrastructure, we do connectivity and networking. We also doing some other work pertaining to data infrastructure and wireless infrastructure. The larger hyperscalers, they buy differently. We don't expect to be selling compute to them. They actually don't like compute from anybody. They're starting to build their own compute. That's one side. From a long-term partnership perspective, we do provide what we call Day 2 support, which is annuity in nature. Once the work is done, the work is never finished, so you need to support the work that you do. There's always some move or change is going on. So we see 10% of our workforce, somewhere around 10%-15%, will continue to remain to support the Day 2 support. And our endeavor is to be able to do that longer term. When we come down to some of their partners, that is their colocation providers, multi-tenant, the ability to do with them is a little bit more because they do a small format. So we will work with QTS and we work with Digital Realty, we could go up the value chain from Layer 0, Layer 1, Layer 2, and we are also forming partnerships with them. Over the last several quarters, with the investment that we have made and the talent that we have brought in quality, safety, project controls, high-level our engagement now, both with hyperscalers outside of our three largest client that we have is increasing. And our current engagements is across various multi-tenant, various hyperscalers, both from a pipeline perspective, and we expect to be able to become their core strategic partner. To do a project that lasts for one to three years' time, you cannot be a transactional vendor. Black Box is also working with many of these providers in more than one country, and we have tended to expand. For example, we are focused now on Europe and some markets, specifically in Spain, U.K., and other areas. This is the back of our relationship. In summary, we are looking forward to long-term relationship. That is the reason why we are focused on larger and similarly are engaging with larger enterprises as well, for similar nature. Therefore, we have decided not to be able to enter everybody, and that is the reason why we are moving out of the long tail. Most of our engagements are now focused on long-term contracts, either projects or long-term multi-year annuity contracts that we do for several critical infrastructure like airports. We support some of the largest airports in the U.S. That is the initiative. Great. That was good insight. On an ending note, I just want to understand from you, as a CEO of a company, how do you decide where to focus between U.S. hyperscalers and India's digital infra? What is the framework behind those choices from your point of view? From a size perspective, I was told before, we focus on where we believe we will get better yields from the effort that we put. Besides, the market for the U.S. is much larger. Of course, India is a growth country, so we have also pivoted to look at India as a growth market for us this time, but still remains a small portion of the overall business. So we are looking at putting our resources where we believe that we can get volume, and we can also get value. So America can provide value and volume, both. India, of course, has volume coming in, so we are currently engaged with India for larger projects. We recently received and partly delivered a very large cybersecurity project. India is going to build a lot of data centers as well. Many of them are currently in the conceptualizing stage. They are announcing the project, like we are giving around this is billion dollar. Between announcing and the project coming through is a long lead time. But India has been super technical value, right? It is a cost-plus country. So we are doing costs, how to make our cash work better, how to make our capital allocation work better, right? And what yield can we get from that perspective. As a CFO company, we said we are looking to drive hyper-growth, but we are looking to drive hyper-growth that has margin as well. And India, of course, remains very core to our business, both from a growth perspective, but also from a delivery perspective, as you know, we are using India for our Global Capability Center in Bangalore. It will remain a key aspect of our overall success, both from a local business, which we are cautious about because we do not want to deplete our margins, but also from a delivery and a skill standpoint that we utilize in India. We have 500 people supporting our global operations. We expect that to grow as we grow our business. Sukrit, sir. As the current participant is not responding, we have the next participant, Vivek Chararia, an individual investor. Please go ahead. Hi, Sanjeev. Thank you for the opportunity. Sanjeev, our Q4 order booking was in the range of $200 million, if I am not incorrect, Q4 FY 2025. Q1, that has actually gone down from 200 to $176 million. Can you just please explain why are you still confident of booking orders to the tune of $1 billion in that 12 months trailing? Our order booking has in fact gone down, so I am not able to square the two. The second part of my question is, we are almost through the first half of the second quarter. How has order booking been? Because I think growth is what is ailing the company. We have done tremendously well on the margin front. It is the growth part which I need a bit more color on. Thank you. Yeah. I think I will first accept your statement with respect to growth, and that is where the focus is. With respect to our confidence with business forecasting, we have been looking at closing an absolute number of billion dollar starting at 175 or 176 that we were this quarter. We are staring at large bookings coming up that we expect to close in Q2, Q3, and Q4. Many of these engagements currently from a large ticket perspective, which are over $10 million, $20 million, some going up to $50 million, is in the works. That constitutes today our pipeline. This pipeline, if you go back 12 months time, of course, we did not report any breakout of pipeline. It still remains $1.6 billion or something in that range, but that is made up of lots of smaller deals as well. We have cleaned that up with respect to what we believe we should be focused on. In summary, to answer where we stand today, our expectation is to have at least 50% of growth in revenue sequentially going forward. We expect some of the quarters to be even larger from a perspective it is involved and within a large hyperscaler deal that we expect to win going forward. Considering a size of $175 million to $150 million deal for a project that lasts for nine months, 12 months or 24 months can skew the win rate much larger from a percentage perspective. When I look at absolute volume perspective as to where we are and take the view of the next nine months, considering we are one and a half months down in this quarter, we are confident of where we will be in bookings this quarter and therefore the revenue coming at the back and going forward. Also what I will see in Q3 and Q4 with respect to the work that is happening of how many engagements are on the table, discussions going on with respect to our contracting, that gives us a positive outlook that we would be able to deliver on and above a billion dollar worth of absolute booking. If we do that, we expect that we should be able to open the backlog, which is now at 520 range. The expectation is that we should open a backlog in the range of 700 odd million going forward to set the tone for fiscal 2027 growth. I have a second question. Since we have reorganized the GTM team and with Jay Venkat to come in as the Chief Revenue Officer, can you speak qualitatively as to what impact you have seen on ground? We have talked about margin and stuff, but I just want you to speak to, as a company, you have been the CEO for a long time. Can you speak qualitatively as to what difference you are seeing on the ground as far as our deal engagement and the win rate difference? Are you seeing a considerable difference if we were bidding for $100 million worth of orders? Is the win rate doubling? Because everything now hinges on us delivering growth. Yeah, a very good question. I will just add up. We do have Jay Venkat, Chief Revenue Officer for North America. We also added, I do not know if you looked at the release with respect to a gentleman called Sean Maguire, came over 2 months back to lead our data center, which is an adjacent business, which is outside of Jay's span of control. He is very focused on data centers. We have two. Coming back to your question, the answer is yes. With Jay Venkat, with his Infosys experience and his team members, which also have come from, which is our vertical heads, there is a dramatic shift with respect to our engagements, quality of engagements. Let me call out, for example, if you look at our consumer and public sector, which we run by Just one last question. Sanjiv, for FY 2026, Vipin in his initial remarks, had sort of alluded to the margin guidance. Our lower end of the top-line guidance will need us to deliver almost INR 1,700 crores per quarter. Should we start to see at least 10%-15% growth from Q2 onwards and then that accelerating as we move into Q3 and Q4? I am sure you can see that we need to start walking that talk. Should we start to expect quarter-on-quarter growth on the top line from Q2 and then that accelerating as we move into Q3 and Q4? Because we are at INR 1,400 crores. Our ask for the next 3 quarters is close to INR 1,700 crores if we are to meet the lower end of the top-line guidance. Thank you. Yeah. I think, as I said before, the statements we expect to move forward in the quarter with a minimum of 15%, going to 20% or beyond to hit that number. We expect that we need to start moving in that direction starting quarter 2, and as Vipin said, to take it from there and keep the momentum at 15% odd or more to be able to catch up the year. I think we are currently intending and cover to track starting from quarter 2. Best of luck, Sanjiv. Thank you. Thank you. Our next question is from the line of Nandan Manjunath Arekal from JM Financial Limited. Please go ahead. Hello, am I audible? Yes, sir. You are audible. Yeah. Thanks for the opportunity. I just want to get some clarity on the exceptional items that have been reported in this quarter. What will be the trajectory of these exceptional items going forward? On the exceptional items, because we are doing some restructuring, continue to do some restructuring and all those things. We are expecting exceptional items in the range of around INR 40-50 crores for the whole year. That is what we have given the earlier guidance also last time on our earnings call. Okay. On a sustainable basis, what do you expect this, when would they stop? I think this year it should be the last unless otherwise something more comes up depending on the economic situation or the macroeconomic situation, something else comes up. But otherwise, this year should be the last for this broader thing. I do not expect that this should go to FY 2027 or something in a larger way. Okay. Thanks. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. Over to you, sir. I would like to thank everyone for joining the call. I hope we have been able to address all your queries on this call. For any further information, kindly get in touch with Purvesh Parekh, our Head of Investor Relations, our Strategic Growth Advisors, our investor relation advisors. Thank you so much. Thank you. On behalf of Black Box Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.