Ladies and gentlemen, good day and welcome to Netweb Technologies 3Q FY 2026 earnings call, hosted by IIFL Capital Services Limited. 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 the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Renu Baid from IIFL Capital Services Limited. Thank you, and over to you, ma'am.
Thank you. Very good afternoon, everyone. On behalf of IIFL Capital Services, I welcome the team of Netweb Technologies for the Q3 FY 2026 earnings conference call. Today, we have with us from the management senior team represented by Mr. Sanjay Lodha, Chairman and Managing Director, Mr. Navin Lodha, Full-Time Director, Mr. Ankit Kumar Singhal, CFO, Mr. Hirday Vikram, Chief Sales and Marketing Officer, and Mr. Sanjeev Sancheti, Head of Uirtus Advisors and IR Advisor to Netweb Technologies. Without much time, I now like to hand over the call to Mr. Sanjeev Sancheti for his opening remarks. Thereafter, Mr. Lodha can take over. Thank you, and over to you, sir.
Thank you, Renu. 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 call presentation. I request each one of you to go through the presentation before the Q&A starts so that you are aware of the Safe Harbor Statement. Thank you, and over to you, Mr. Lodha.
Thank you, Renu and Sanjeev. Good afternoon, and a very warm welcome to all of you to the Netweb Technologies Q3 FY 2026 earnings call. We are proud to state that Netweb has delivered a record-breaking quarter, achieving its highest-ever income and profit. Quarterly revenues stood at INR 8,049 million, registering a strong growth of 141% year-on-year and 165% quarter-on-quarter. The company reported an operating EBITDA of INR 979 million in Q3 financial year 2026, reflecting a strong year-on-year growth of 127.1%, while a profit after tax reached INR 733 million, marking a robust 146.7% growth year-on-year. During the quarter, Netweb successfully executed a large strategic order valued at INR 4,504 million, reaffirming its position as India's largest OEM in high-end computing solutions.
As communicated earlier, this implementation is of national significance, aimed at strengthening India's AI compute infrastructure. In this context, we would also like to give a broader industry update.
As many of you may be aware, the global supply chain, particularly for the flash memory and storage, is experiencing a strong demand by the rapid acceleration of AI adoption worldwide. This surge has led to industry-wide price increase, along with tighter availability. However, owing to our proactive supply chain planning and long-standing partnerships with key technology providers, we have managed these situations very effectively and continued to support our business requirements without any disruptions. With the execution of this order, the AI system segment contributed to 64% of Q3 financial year 26 revenue and 48% of nine-month financial year 26 revenue. We would like to emphasize that alongside the accelerated growth of AI, our other two core segments of HPC and private cloud are also witnessing strong and sustained demand.
This exceptional performance underscores Netweb's steadfast commitment to in-house design and manufacturing of next-generation systems fully compliant with the Make in India initiative and highlights our contribution to India's emergence as a global hub for high-tech manufacturing. Our order book is very robust, with an organic order book at INR 5,258 million and a strategic order book at INR 17,336 million. This order book, along with a strong pipeline, positions us for strong, sustained growth over the next few years. Netweb's continued focus on its three strategic growth pillars, HPC, private cloud, and AI systems, is enabling us to capitalize on strong industry tailwinds. Supported by these core strengths, we continue to remain the technology leader in the high-end computing system space. I now request Ankit to take you through the financials. 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 and the year gone by. I trust that by now you have had the opportunity to review our earnings presentation and press release. While our CMD has already discussed the macro outlook, I will elaborate on the financial performance, providing a more detailed analysis. Our operating income for Q3 FY 2026 stood at INR 8,049 million, showcasing a growth of 141% YoY and 165% QoQ. Our operating EBITDA for Q3 FY 2026 stood at INR 979 million, showcasing a growth of 127.1% YoY and 115.4% QoQ, with a margin of 12.2%.
Profit after tax for Q3 FY 2026 stood at INR 733 million, showcasing a growth of 146.7% YoY and 133.2% QoQ, with a margin of 9%.
Our operating income for nine months FY 2026 stood at INR 14,099 million, showcasing a growth of 92% YoY. Our operating EBITDA for nine months FY 2026 stood at INR 1,883 million, showcasing a growth of 88.7% YoY, with a margin of 13.4%. Profit after tax for nine months FY 2026 stood at INR 1,352 million, showcasing a growth of 90.1% YoY, with a margin of 9.5%. Return on equity for nine months FY 2026 was 30.5%, while return on capital employed for the same period was 41.3%. Our cash conversion cycle as of December 2025 stood at 69 days, reflecting significant improvement compared to the previous quarter. Our balance sheet strength is reflected by us being a zero-net debt company.
The company had net free cash of INR 1,900.8 million as of 31 December 2025. Our strategic roadmap and growth priorities remain on track, supported by strong year-long-term momentum, a healthy order book, and a solid pipeline.
We are positioned to deliver consistent revenue and profitability this fiscal year. With this, I now hand over the call to Renu Baid.
Yeah, we can now start with the Q&A session.
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 Seema Nayak from ICICI Securities. Please go ahead.
Hi, congrats on a great quarter. So my first question is, can you tell us the timeline of execution of strategic deals? Is it the same as before, or are there any changes? And second is regarding the HCI and HPC segment growth, which have been rather slow in this quarter. So what has caused this muted growth, and how is the growth planned going forward?
So basically, our guidelines on the execution of the strategic order remain the same. Basically, we had guided that one order should be executed by Q4. Actually, it got preponed to Q3. So basically, you already saw that. And we target to basically target to do at least one-third of the order this year, basically overall. So guidance remains almost all in the same lines. As regards to the second question on muted growth of basically our HPC and private cloud segment, I completely think that's basically I think that's not true because basically the growth of both the segments has really been growing constantly. But what happens is, since basically since there is a large order execution, so on a QoQ basis, we could yeah.
So basically, what happens is in our kind of business, it becomes very difficult to measure anything on quarter-on-quarter basis, actually, because basically we have very large enterprise and government customers. So order execution, since basically, as I mentioned to you, since the last strategic order, I had not guided that it will be done in Q3, it should be pulled into Q3. The same way, basically, Q1 quarter-on-quarter, it can vary. But overall, basically, both the segments that you might have seen in the Q1, Q2, and the overall ninth-month results are very robust because all those areas are really demanding. Like basically, supercomputing is growing at a good way, and private cloud, again, the data center market is booming.
So I just like to add here, Sanjeev, so if you look at the YoY growth, then these two segments have done over 20%. And there will be some quarters where some segment will do better and some segment will be lagging behind. But overall, I think these three segments will continue to grow at a very strong pace, as we have guided earlier. Of course, we have to remove the strategic order and then see the growth of the AI segment.
Thanks. My next question is regarding exceptional items. So many companies have announced costs from implementation of new labor codes. So any reason we have not announced?
So, Seema, there is no material impact of new labor codes on our financials because as per the new labor codes, there is a revision in the wages definition, and we were already compliant on the structure that new labor codes have kind of clarified. So that's why there was no impact on us.
Got it. Thanks and congratulations.
Thank you.
Thank you. The next question is from the line of Nishant Gupta from Kotak PMS. Please go ahead.
Hi, sir. Thanks for the opportunity. Congratulations for a good set of numbers. I had just one question, more of a strategic question as such. How do you foresee the budget for AI mission evolving coming quarters as the initial allocation orders were only for INR 4,500 crores and 10,000 GPUs? When do you think further orders would get placed, and what would be our win percentage within that? Thanks so much.
The government focus is phenomenal on AI, actually. As you might be aware, recently, the new AI Impact Summit is being held from 17th to 20th of February, where Prime Minister himself is supposed to be sharing the stage with NVIDIA CEO. Okay, so basically, there's a lot of focus and impetus from the government on the AI side of it, and AI mission has been there, and basically, we have always been saying that AI mission will basically roll out, and you already started seeing it roll out, actually, so as I have been telling continuously, there are two parts of AI mission, actually. One is they will be taking GPUs on lease from the CSPs and then offering it to the startups and basically various kinds of bodies who are working on citizen-centric services so as to enable those kinds of development.
The second part will be wherein the government will be clearly buying the GPUs for their own basically own data centers and all. The second set of things are yet to come, but the first has just started. So there is a lot of pressure on the government also to increase their spending. And I think there are phenomenal planning and phenomenal execution going on in that case. And plus, basically, there is a lot of assurance, and there is a lot of the statements from the government clearly indicate that they are ready to even offer more money. So I don't think money is a challenge, but primarily, the spending has started, and I think it will gain momentum as the time passes on.
Yes, I could just clarify one small thing. So in the earlier case, correct me if I'm wrong, in the earlier case, it was the order was placed for 10,000 GPUs and 4,500 odd crores. And in that, I believe we have won 2,170 odd crores of strategic order, which you had announced last quarter. Now, has this entire 4,500 odd crores tender been released and orders been placed, or we are still left with certain orders being placed within that 4,500 odd crores?
Yeah, I would have let Hirday answer that question, but basically, let me give you a brief, and maybe Hirday can take it up from there. So basically, this was INR 10,000 crores was the value. Okay, and the number of GPUs was not specified, actually. Okay, the first thing is that. And second is that basically, they are not offering the INR 4,500 crores. The GPU order has not come as yet. Basically, it will come in a different way, actually. Maybe Hirday, if you can explain and elaborate that.
Yes, I'll do so. So basically, there are two sets of procurements which are happening right now. One is that they have to build the GPU. They want to render the GPU services to the internal CSPs. That is one effort of procurement by the government of India. Second procurement is that what you are referring to, that they have to do the procurement for on-prem infra, which we have to build using GPUs. So that is yet to start. So what we have been executing so far, or what we have shown as the strategic orders, what we have picked up, that is pertaining to the first type of procurement, what they have done. So second is yet to start. I hope this answers your question.
Sure, that's helpful. Thank you so much.
Yeah.
Thank you. The next question is from the line of Renu Baid from IIFL Capital Services Limited. Please go ahead.
Yeah, thanks for the opportunity, sir. So my first question is, recently, obviously, we've been hearing a lot about the shortages in memory chips, especially for DRAM and HBM. So A, what is the share of DRAM, HBM in our bill of materials? And how are you seeing the shortage of these chips impacting or having a potential impact on your execution timelines and margins, given that most of our orders are fixed price in nature?
So basically, as regards to basically the BOM, normally, we don't share the BOM, actually, that basically the percentage of a component in a BOM. And actually, it varies also as per the user requirement, as per basically what they need and what is their application and all that. So it is not fixed as such. But definitely, memory and flash and storage is a substantial part of the BOM. There's no doubt about that. But answering the question on the other side is that basically, as we all are aware that there have been huge shortages and huge price jump, and all this is happening because of the AI demand actually surging worldwide. This is not a domestic event. This is an international event wherein basically the AI demand is surging like anything.
So the manufacturing capability of memory and other things are not able to cope up, and that is resulting into shortages and price hikes. But you see that even that was happening, but still we have performed. All our deliveries and our performance has been preserved. We have grown. Our revenue has grown by such a huge number. That has only happened because basically our supply chain planning has been very, very effective. And since basically you have to understand one thing, that the industry is experiencing shortages in flash and memory, but we manage this challenge effectively through proactive supply chain planning and strong technology partnership. Our focus on high-end niche solutions rather than box pushing allows us to maintain deep and long-term relationships with key suppliers, which gives us priority access to critical components such as storage and memory.
For new orders, pricing will be aligned with the prevailing market dynamics at the time of the order placement. This approach ensures transparency while allowing us to continue delivering reliable high-performance solutions despite ongoing supply constraints. So it's very clear that basically we are minimally impacted, and I don't think this will impact either our profits or our delivery timeline. Hello?
Yeah.
Hello.
Thank you, sir, for this. The second question is, if we look at the organic growth, excluding the strategic order execution, which was done in the current quarter, was slightly soft, just about 6% YoY, so if you can share some inputs in terms of how is our capacity lined up to sustain the organic growth momentum in 30%-40% CAGR range, which we have been highlighting over a longer period timeframe, and were there any specific issues in terms of delivery deferments or other elements which impacted the organic growth in the particular quarter, and what would be our guidance on the organic growth side for the annual fiscal 2026 and 2027?
I'll answer the last question first. As we have been guiding all along that our growth will be at 30%-40% CAGR, we still maintain that on the organic side, and we will basically if you see the order book, that will all give you the confidence. It's 525 crores primarily on the organic side, plus L1 is around 300 crores. That makes it around 800 crores. So basically, the order book is really full, and we have a very good order book on the organic side. That gives me the confidence that it will continue at the same way. Your other question was primarily on the supply, basically on the manufacturing capabilities or the capacity. So we have always been saying that we are not a capacity-based organization. We are a capability-based organization.
So, primarily, basically, we don't need to make any kind of primarily. We don't have any capacity challenges like manufacturing capacity and all that because we have very clearly indicated that up to 25,000, 2,500 to 3,000 crores, our manufacturing facility is almost all very, very sufficient. We don't need to really invest into CapEx and all. So that's not a limiting factor. But what happens is that definitely, once a large order comes in, at some point, some smaller orders get pushed into the next quarter. So that may result into some kind of number kind of changes. So that's the reason I always say that in our kind of business, you cannot see anything on quarter-on-quarter basis. You have to see it at least basically on a year-on-year basis or if not H1H2 kind of a basis.
Even if you ignore the strategic order, on the YoY basis, we have grown over 30% for nine months.
Renu ma'am, you want to ask more questions?
No, I'm done on this side. Thank you.
Thank you. The next question is from the line of Vinay Menon from Monash Capital. Please go ahead.
Hi, sir. Thank you for the opportunity, and congratulations on great set of numbers, so a few questions from my side, sir, that margins have come down for us in this quarter, and we were expecting margins to come down because of the large deal execution. In the next three quarters, we will continue to execute this large deal, so can we expect margins to be in this range for the next two to three quarters?
Let me just take this question. So we have guided that we'll be about 200 basis points lower at the PBT level on the strategic order because obviously, these are very strategic large orders, and that's the way these orders would come. So if you kind of remove the strategic order and do a weighted average, then you will see that we would have done a margin of about 9.9% in the quarter and YTD above 10%. I mean, I think we continue to guide the same. In strategic order, we'll be about 200 basis points lesser on the PBT level. And whatever mix we then achieve every quarter, probably you can be guided by that.
Okay. So just to understand, because we did 15% margins for the last two quarters, and you had mentioned that these are exceptional margins, and the range will still be between 13%-14%. So is that the range we should take for the constant business going ahead?
Yes. Yes. You're absolutely right. Because you can very well understand, if today's market dynamics, if we are able to just take up orders worth INR 500 crores at 200 basis points below, I think we should be complimented for that. Basically, because it's really in this world which is very dynamic and which is really basically all these kinds of solutions are being sold and adopted in spite of everything. So definitely, that helps. That speaks a lot about our company's products and the range of solutions.
Okay. Yeah, completely. Completely, and just two more questions. One is on the cash flow. So first off, we posted 100 crore plus CFO. So for nine months, what's the status, and is there any inventory pile-up for the execution which we'll do for the next few quarters?
Vinay, as far as inventory pile-up is concerned, so all inventory is basically for our upcoming orders and stocking of our critical components. There is no pile-up as such. If you see, our inventory days were maintained at 60 days as of 31st December. Regarding the cash flows, we had positive operating cash flows in this quarter by close to like.
Quarter was INR 33 crores?
Yeah, 33.
Yes, YTD was about INR 134 crores.
Okay. That's.
Yeah. Cash flow from operating activity.
Inventory days itself says that there is no inventory pile-up.
Yes. Yes. No, I just want to understand for Q4 how are we placed so that we can get clarity for the year.
Inventory planning is very good. The supply chain planning has been happening very well. Actually, the technology providers are helping us. So definitely, we are very. I don't think we have anything to worry on the inventory side, actually, realistically.
Okay, and just one last question from my side, sir. You're seeing the way ASICs are coming as an alternative to GPUs, and there is a big risk that GPU demand might just come down in H2 of 2027. And how are we placing ourselves for that? Because we do have a very good relation with NVIDIA, but are we looking to build relations with people who are in ASICs like Google or Broadcom? Is that a plan for the company?
Actually, really speaking, if you really see the kind of today, you are seeing that memory shortages, shortage of storage, and everything is happening because of the AI demand surge. Okay. So my personal feeling is that we are at the tip of the iceberg, actually, really speaking. People may talk about bubble and all, but basically, what my feeling is, definitely, AI has just started. And basically, if you see the demand, the worldwide demand, that answers it very well. Nobody can sustain that. But there is a wishful thinking that we need a substitute. Definitely. So Netweb is a very open company. We are not married to anybody that we have to work with only NVIDIA or somebody else. So we are very clear, and we are always open to working on new technologies. The only thing which we work is that we work on complete technology indigenously.
We design our hardware. We manufacture our hardware or software, everything in India. So basically, it may be Google. It may be anybody else. We are more than glad to work. If there is market adoption and market dynamics desire that, we are fully capable of doing that.
Okay. Thank you so much. Thank you. Thanks for the opportunity. Thank you.
Thank you. The next question is from the line of Akshay from AK Investments. Please go ahead.
Hi, sir. First of all, congratulations for the great set of numbers. Sir, I was just having the question regarding our order book. Our organic order book is strong, and obviously, the L1 combined is around more than 800 crores. But for the strategic order, are you seeing any kind of deal or any big size of order for the next longer term for next one to two years?
Yeah, definitely yes, because there's a lot of discussions going on. There's a lot of activity happening. But strategic orders, we are not guiding as earlier. Strategic orders, we are announcing as we are winning it. So we'll maintain the same stand.
Okay, sir. Thank you. All my other questions have been answered. Thank you and all the best.
Thank you. The next question is from the line of Anand B. from Seema Wealth Private Limited. Please go ahead.
Good evening, sir. Can you hear me?
I can hear you very well.
Yes, sir. Congratulations on a good set of numbers. I have three questions. The first one is regarding your import components, sir, and your hedging policy for that. So do you have a hedging policy for any import, the prices of any import component fluctuations, and just give a sense of what you have in that?
We have a hedging policy for currency fluctuation. The CFO will elaborate.
Yeah. So there is a hedging policy very well adopted. And to talk about it, we also have forward contract as of December end, which close to cover 60% of our payables pertaining to the import payables. So we are very well monitoring the situation on currency and doing the effective hedgings wherever necessary. And just to apprise, there is an MTM gain also, although that's unrealized, but it comes out to be close to 2.8 crore of gain, which is appearing in our other income category.
So we have a clear hedging policy, and obviously, the accounting is done as per the accounting standards.
Okay. Okay. That's good. And second thing, in your first quarter phone call, you mentioned that you have some plans regarding quantum computing. Can you just elaborate a bit on what sort of plans you have in quantum computing? Is it making quantum computers or related to software in quantum computing? Can you just elaborate on that?
Actually, then also I told you, please have some patience. Once we have the complete quantum policy, we will come to you, and we will let you know for basically market interest. At this point of time, for competitive information, we would not like to share our plans on quantum as yet. But definitely, we are working on the background. Once we have it ready to disclose, we will disclose it.
Okay. That's fine. And my third question is, today, you made basically a post saying that, okay, for FY 2026, the top line growth would come to around 2,000-odd crores. So would the revenue go beyond that, or are you still sticking to around 2,000-odd crores top line growth in FY 2026?
As basically as earlier also, we don't guide by the final number, actually. You're already seeing the company growing at a phenomenal rate. So definitely, basically, we will only guide that our growth will be between 30% to 40% CAGR on the organic side. We will still maintain that.
Okay. Okay. Thank you so much.
Thank you. The next question is from the line of Shashank Jha from SBI Capital. Please go ahead.
Hello.
Yes.
Actually, most of the questions have been answered, but I want to actually, sir, understand what exactly you do in AI system. If you get an India AI order, so are you providing GPUs, or are you doing model development? If you are providing GPUs, then why depreciation is not there?
So basically, you will have to understand depreciation is not there. That my CFO will answer you. But basically, what we are trying to do, you need to understand that. We are designing the complete AI server, actually. Okay. Basically, on the NVIDIA and all these people, we work with them. We have access to the roadmaps more than around 18 months in advance, wherein we work with all the new design and architecture. We develop a very efficient product. Then basically, once the design is done, then basically, we buy chipsets from various technology providers, and then we have our own manufacturing capability where we manufacture it, and then we finally sell it. Okay. And once we sell it, basically, that is along with the GPUs. GPUs is only one component of the server. GPUs by itself will not run, actually.
They need to be completely a part of the server, actually. So GPU comes as chip to us. Okay. Then that gets integrated into the servers, and then we sell it to the customer. So the ownership is not ours. Once we sell it to the customer, customer runs it, runs the GPU. Maybe Anand can answer it.
The business model is, when we manufacture servers, we upfrontly sell it to the customer. For customer, it's a CapEx purchase. It may be a CapEx purchase for customer. For us, it's a revenue event.
Okay, so basically, you are a service provider here, actually.
No. You are a manufacturer.
We are a manufacturer.
We are a manufacturer.
Go ahead. Go ahead.
Go ahead. Go ahead.
Yeah. So basically, beneath the application layer, we have got the complete stack which we provide. It's not basically that we are a provider of one type of component only. Beneath the application layer, the right-on compute, the interconnect, the storage, and then the complete AI cloud stack, and on top of it, the middleware. So all these things are basically given in the form of a solution by us. It's not basically just that we are supplying the GPU chipset because, as he mentioned, the GPU chipsets will not alone work in the system. So that's the reason it has to be understood as a complete solution which we are providing.
Okay. Then what is your role in data centers? Do you have a different segment?
Sorry to interrupt. Please rejoin the queue for more questions.
But let us answer this question because it will create confusion on our side.
Excuse me, sir, actually, a bit. AI system data centers are related. [Foreign language]
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Thank you. The next question is from the line of Qi Huang from Pictet AM. Please go ahead.
Hi, Sanjay. Management, thank you. Congratulations on the very strong earnings. I want to ask about the constraint because apparently your revenue is growing very fast. You talk about you don't have manufacturing constraint, but do you see any other constraint like labor, talent, and recently after you have done IPO, doing very well? Does that help you for your overall acquisition, talent acquisition strategy? And if that, maybe along that line, can you update how many people you actually have in the company? And maybe on a year basis, how many engineers, how are you doing on the talent front? Thank you.
So thank you for your question. It's a very good question, sir. Thank you for asking such a question, actually. So really speaking, as basically Netweb is a company which is very clearly focused into its niche segments, we don't want to get into any kind of basically box pushing or basically volume manufacturing kind of situation. So we have kept our focus very clear. I think Netweb is successful because of that only. Netweb has kept its focus very clearly into the supercomputing, into the private cloud, into AI. And all the three segments contribute 90% of my business. And all these three segments we are doing for years together. None of these segments started somewhere a few years back. All the segments are more than 10 years old for us.
So basically, the major talent which we faced while we went IPO, actually, I don't know whether I met you earlier or not, but I think I should have told you that basically what happened is that basically earlier when we went IPO, because we wanted to retain our talent and to hire new talent, we were 240 people while we went IPO. Today, we are 600 +. So definitely that thing has been addressed very well because basically it has given us more visibility. Plus basically, so the technical talent is very, very important for us. You know, we are a product company. We are not a services company. So we invest quite heavily on R&D. So R&D talent is very important for us. Our R&D team is around 100 + people, both software and hardware together.
So I think we have been able to definitely clearly come away with the constraint which we had primarily on the talent side, and we are doing very good on that, but definitely, we are always looking for new talent, good talent, so you will always find if you go to our LinkedIn page, you will find a lot of openings actually at all times, actually, so we are always looking for better talent, good talent, so that is definitely an ongoing process, but I would like to tell you that we are much better off. As regards finance and all, basically, really, see, we are a zero debt company. Our debt raising power is phenomenal, but basically we don't need debt actually because we are able to manage our finances very, very clearly.
Our technology relationships also basically helps us so as to handle the supply chain also because we have large technology relationships with three or four major vendors which are also very long-term relationships. These are not any short-term relationships. That is helping us. So currently, even in the situation where the storage and the memories and the shortage, but we get good adequate support. Same way basically with NVIDIA also, we are currently working on the current orders which we are fulfilling are based on Blackwell 200, which is same as any other large OEM doing in the world. So basically in India also, we are trying to do. The India is not at the back. India is at the forefront. We are already working on B300s, GB300s on the latest chipsets. Same way on the Intel side, we are working on the latest chipsets.
Again, on the AMD, we are again working on the latest chipsets. So basically, before the product release, we have access to the roadmaps. We start working. So the niche and the focus always helps us. And on the manufacturing side also, we don't find any constraint really speaking because you saw the growth, but still we are saying that we don't want to increase our CapEx primarily till the revenue of INR 2,500-3,000 crores. So approximately we are very good at that. The other thing basically acquisitions and all, definitely we are looking for acquisitions, but we are looking for acquisitions which can fast up our R&D process because we are basically whatever business we are doing, we are very happy with it, and all the three areas are very, very growth areas.
But tomorrow, instead, if we can invest our own engineering team six months to one year to develop something wherein we can get a kind of a we can do acquisition which can speed up that process, that would be good. So we are looking for such acquisitions primarily. I hope I'm able to answer your question.
Okay. Thank you.
Thank you. The next question is from the line of Sandeep Shah from Equirus Securities. Please go ahead.
Yeah. Thanks for the opportunity and congrats on a good set of numbers again. Hirday sir, this is a question to you with reference to earlier question. With Google's GPU and Amazon's Trainium, OpenAI's tie-up with Broadcom, are we also started doing some design R&D on these kind of a platform because as of now, we are in prevalence and partnership with the AMD, Intel, and NVIDIA? So do you believe these hyperscalers, new chips can be also adopted by the enterprises, or this could be more for their internal work?
So thanks, Sandeep ji, for the question. So first of all, I would say that as we mentioned earlier also, for example, for quantum, we are unable to disclose much details at this stage. Likewise, for chip designing, etc., as well, we are unable to disclose too many details at this stage. Maybe we can discuss one-on-one on this front. But yes, as we mentioned clearly that we are working on different technologies already, be it x86 architecture-based systems, be it NVIDIA-based GPU system architecture, or the other probable options which are available. So we are working on all those fronts. But yes, I'm disclosing details at this stage would be too early for us to do it in this call.
Okay. Okay. Fair enough. And just a clarification, our target of one-third of our strategic order by Q4 of this financial year is for the total strategic order size of 2,184 CR, right?
That is correct. That is correct, Sandeep ji. That's our target.
Sanjay sir, is it fair to assume even in fourth quarter, we can have a credit for PLI if government approval comes on within the timeline?
Looks like.
Okay. And last question, any other order pipeline getting created for the strategic orders, maybe for the first type of?
That's an ongoing process, Sandeep ji. That's an ongoing process. There is a huge basically opportunity on our hand which we are constantly working. But as we mentioned, we are not guiding on the strategic orders. We are announcing as we are getting it. So it's still maintained the same.
Okay. And so, last question, fourth quarter is generally seasonally strong for business outside strategic orders. Do you believe same can repeat in this financial year as well?
Your wishful thinking really helps us to think positive.
Okay, sir. Thank you.
Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit your questions to one per participant. Should you have a follow-up question, please rejoin the queue. The next question is from the line of Aman Soni from Nvest Analytics Advisory LLP . Please go ahead.
Hello. Hello everyone. Especially for good set of numbers. Hello.
Aman, can you please speak a little louder?
Especially congrats for good set of numbers.
Thank you.
Sir, with the recent spike in the commodity price, especially copper, is this critical for power transmission and data center infrastructure? How do you see the impact on economics and timelines of AI-led data centers deployment in India? Are you observing any deferment of orders, demand slowdown, or longer decision cycles for customers due to high power and infra cost? Or does the AI-driven demand remain largely insulated?
Sir, actually your question is really interesting, but basically actually I personally feel the copper prices are going up because of the data center demand. Rather than basically copper pricing restricting data center demand, it seems a very, very odd thing actually, really speaking, because the way the data centers are growing, definitely copper prices are really, I think, getting stronger because of that. Overall, metal sentiments are different, but still I feel that's the reason, so I personally feel because the data center boom and the kind of opportunity is there, I don't think copper pricing will really impact or slow down the growth or something. Definitely, it will factor in, basically, the cost will be higher because of electrical components and all. We don't deal in most of them. We also use copper, but our copper use is limited. It's not that much actually.
Primarily, we have some copper use in our servers actually and some components it's being used. But still, I personally feel that these prices, whatever price hike is happening on the copper side of it, the industry is such a basically vast high-technology industry will easily be absorbed and it won't slow it down.
Okay, sir. Thank you. Understood.
Thank you. The next question is from the line of Raman KV from Sequent Investments. Please go ahead.
Hello sir, can you hear me?
Yes.
Sir, I have two questions basically. One is I just want to understand what's the difference between your organic order book and strategic order book? Is there a difference in terms of revenue recognition or the project cost? That's my first question.
Okay. So when we said what is organic, inorganic, there are certain very large possible orders which the company is pursuing business. These will be large orders which generally could be 400-500 thousand crores. We call them strategic orders. There are no difference in the accounting policy, the revenue recognition, etc. On the margin side, larger order will be already guided that these will be about 200 basis points lower at the PBT level. I think that's the difference there. Otherwise, no difference in the accounting treatment, etc. I hope that answers you.
Understood, sir. Sir, and so if I'm excluding this execution of this strategic order in Q3, my nine-month revenue comes around 1,000 or 1,100 with the current quarter revenue around 400 crores, if my understanding is right. Am I right?
It should be in the same.
More or less.
More or less right.
Yeah.
More or less right.
Basically, on top of strategic order, we are able to do around 400 crores of revenue on a quarterly basis.
No, no, we are not saying that. Every quarter will not be the same. We are not an FMCG company. You understand? So be guided by what we have given for an annual guidance. Quarter -on- quarter, it's not cast in stone that every quarter will be 400 crores.
No, no. I just want to understand whether this business is cyclical or periodic, which in essence basically whether the first half is better in terms of revenue recognition or usually like an EMS company where the revenue flows towards the end of the year. So I just want to understand that from that point of view.
There may be some difference between first half and second half, but quarter -on- quarter, in different years we have seen different quarters doing better. So in some years, we have seen Q3 to be the best. Some years, we have seen Q4 to be best. It is impossible to say.
So basically second half is better?
Second half is better.
Second half is better than the first half.
Oh, okay. And so this INR 500 crores of organic order book, what's the timeline for you to execute these orders on a ballpark figure?
450 is already built, right?
No, no.
525 is the order book.
Organic order.
Yeah. Order book is basically our order book. Billing cycle is 12-16 weeks normally. Okay, on the organic cycle.
How long will this L1 order of around 300 crores take for you to recognize in the order book, convert it to a proper order book?
I think within next eight-10 weeks, it should be there.
Okay. Sure. Thank you, sir.
Thank you.
Thank you. The next question is from the line of Onkar Ghugardare from Shree Investments. Please go ahead.
Sir, I just had one question. With everything looking so positive, what could go wrong with the business? And I'm not talking about the short-term challenges here like chip and all. I'm talking about some long-term issues you could face which could derail the growth of your company.
Really speaking, I'll have to spend a night to think about it actually because basically telling you.
If you can just highlight three, four main points, that would be helpful. Yeah.
One minute. Let me tell you. Basically, if you really see, this is I think the 12th quarterly result which I have presented after listing. You will see consistently every quarter we have grown. Basically, if you really see, basically the growth has been very, very consistent. It's very difficult to do this kind of business because this is just because of our niche and focus. So basically, I think we are not into a volume company or something of that nature. So it's primarily quite good, and overall, we feel we don't find any major kind of any black swan event if it comes tomorrow, if earthquake comes, or basically if something happens to the world and company, we also cannot do anything about it, but overall, other than that, I don't see any major challenge ahead.
Yeah.
Okay. So you are saying that 30%-40% kind of growth, I mean, even if maybe in next two or three years, your base goes up, that 30%-40% run rate is quite achievable. You are saying that?
Yes. At least next two to three years, we are targeting that.
Okay. And are you thinking anything about the capacity addition after INR 2,500-3,000 crore?
Yes, definitely. Some kind of we are capability-based, so it's an ongoing process which keeps on going. So definitely, if that requirement will there, we are fully equipped to do that.
So how much time it will take for you to ramp up that once you start doing it?
Actually, again, these plans are very, very close to the company actually. For competitive information, we would not like to share that.
But just to kind of give you the comfort that business will not be constrained by capacity.
That's true.
We'll do what needs to be done if we have business to be done.
Okay. Thank you, sir. That helps. Thanks.
Thank you. The next question is from the line of Miloni Mehta from Monarch Capital. Please go ahead.
Thank you for the opportunity, but actually most of my questions are already being answered.
Thank you, ma'am.
Okay. Thanks.
Thank you. Ladies and gentlemen, due to time constraint, this was the last question for today. I now hand the conference over to Ms. Renu Baid for closing comments. Over to you, ma'am.
Thank you, everyone, for your patient participation. I would now like to hand over the call to Mr. Sanjay Lodha for his closing comments. Thank you and over to you, sir.
Thank you, Renu ji. Thank you to participants and great partnership and the great trust which you have instilled upon us. We'll do our level best. Thank you so much.
Thank you very much. On behalf of IIFL Capital Services Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.