Netweb Technologies India Ltd — Q4 FY26

Netweb Technologies India Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=ulCzSNvLiB8 Published: 9 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to Net Web Technologies Limited Q4 FY26 earnings conference call hosted by ICA Securities. 0:12 12 seconds As a reminder, all participant lines will be in the lesson only mode and there will be an opportunity for you to ask questions after the presentation 0:19 19 seconds concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on a touchstone phone. Please note that this conference is being recorded. 0:31 31 seconds I now hand the conference over to Miss Simanayak from ICICA securities. Thank you and over to you ma'am. 0:39 39 seconds Thank you. Good afternoon everyone. On behalf of ICIS Securities, I welcome everyone to Network Technologies Q4 FI26 0:48 48 seconds call. We have the pleasure of having with us the senior management team of Netware Technologies led by CMD Mr. 0:55 55 seconds Sanjay Lodha full-time director Mr. 0:57 57 seconds Naven Dodha CFO Mr. Ankit Kumar Singhal Chief Sales and Marketing Officer Mr. 1:03 1 minute, 3 seconds Vid Vikram Chief Strategy Officer Lupul Kadia and head of Yoto's advisers the IR adviser to network technologies Mr. 1:12 1 minute, 12 seconds Sanji Sanjetti without further delay I'd like to hand over the floor to Mr. Sanjay Sanjay over to you sir. 1:20 1 minute, 20 seconds Thank you Shima. Good afternoon to all the participants. Before I hand over the call to Mr. Sanjay Rodha for the opening 1:27 1 minute, 27 seconds remarks I would like to draw your attention to the safe harbor statement in the earning call presentation. I request each one of you to go through 1:36 1 minute, 36 seconds the presentation thoroughly before the Q&A starts so that you are aware of the same. Thank you and over to you Mr. Lo. 1:46 1 minute, 46 seconds Thank you Sema and Sanji. Good [clears throat] afternoon and warm welcome to all of you to Net Technologies Q4 financial year 26 1:55 1 minute, 55 seconds earnings call. We are pleased to announce that Netup Technologies delivered a landmark year with a revenue 2:02 2 minutes, 2 seconds of revenue from operations reaching 21,836 million in financial year 26 reflecting a strong year-on-year growth of 90%. 2:13 2 minutes, 13 seconds This record annual performance underscores the strength of our business model and accelerating demand for high-end computing systems in India. 2:22 2 minutes, 22 seconds For Q4 financial year 26, revenue from operations stood at 7,737 million growing at 86.6 2:31 2 minutes, 31 seconds yearonear demonstrating strong execution momentum as we close the year on a high note. PAT for the quarter stood at 7 70 2:39 2 minutes, 39 seconds 76 million representing 65.7% year-on-year growth with a PAT margin of 2:46 2 minutes, 46 seconds 9%. For the full year, PAT stood at 258 million up by 80.9% year-on-year with a PAT margin of 9.3%. 2:57 2 minutes, 57 seconds These results reflect not just topline momentum but discipline margin sustained across our businesses. 3:05 3 minutes, 5 seconds The defining highlight of financial year 26 has been the performance of our AI segment which grew by 459.6% 3:13 3 minutes, 13 seconds year on year. This growth was result of years of focused in-house R&D enabling us to design and manufacture some of the 3:22 3 minutes, 22 seconds world's most powerful latest generation AI systems combined with discipline planning and execution of large 3:30 3 minutes, 30 seconds strategically significant national scale orders. AI systems contributed 43.4% of 3:37 3 minutes, 37 seconds our total operating revenue in in financial year 26. A transfer transformational shift from a revenue 3:44 3 minutes, 44 seconds mix that firmly positions our nets uh our total operating positions net at the center of AI infrastructure built out. 3:54 3 minutes, 54 seconds The other two core segments HPC and private cloud continues to exhibit robust demand reinforcing the breath and resilience of our technology portfolio. 4:05 4 minutes, 5 seconds The performance is direct reflection of network's unwavering commitment to in-house design and manufacturer of 4:12 4 minutes, 12 seconds nextgen high-end computing systems. This fully aligns with global phenomenon of sovereign compute infra needs which is 4:19 4 minutes, 19 seconds very well addressed by networks net and countries maker India vision. 4:24 4 minutes, 24 seconds We take immense pride in creating significant impact in strengthening India's emergence as a credible global 4:32 4 minutes, 32 seconds hub for high technology manufacturing which will benefit the nation for decades to come. 4:38 4 minutes, 38 seconds Beyond our own performance, we believe India stands at the threshold of generational opportunity in artificial intelligence. With the world's largest 4:47 4 minutes, 47 seconds pool of digital users, a fast maturing data ecosystem, the major boost to indigenous foundation models and 4:54 4 minutes, 54 seconds decisive policy momentum through India AI mission supported by make it India. 4:59 4 minutes, 59 seconds The country is posed to emerge as one of the most prominent AI economies of the world. Center to this visor is 5:07 5 minutes, 7 seconds government's clear focus on sovereign AI infrastructure ensuring that 5:13 5 minutes, 13 seconds the compute data and models powering India's digital futures is built owned and operated within the country. The 5:22 5 minutes, 22 seconds buildout of indigenous AI compute is no longer aspirational. It is a strategic national imperative tied directly to 5:30 5 minutes, 30 seconds economic compet competitiveness, data security and technological self-reliance. 5:37 5 minutes, 37 seconds As India's only fullstack domestic provider for high-end computing systems, NetApp is uniquely positioned to power this transition. 5:46 5 minutes, 46 seconds Our strate strategy remains firmly anchored on our three growth pillars. 5:51 5 minutes, 51 seconds HPC, private cloud and AI systems supported by our established technology leadership in high-end computing system space for large order pipeline. 6:00 6 minutes As we step into financial year 27 from a position of strength with a firm order book of around 2100 crores and a L1 6:09 6 minutes, 9 seconds inclusive or order book of 2400 crores day one of financial financial year 27 6:16 6 minutes, 16 seconds we already have on our books the more than what we had built for all of last year. We see a long runway of growth 6:25 6 minutes, 25 seconds ahead. We remain committed to investing in R&D, manufacturing depth and talent to ensure India's AI ambition are built 6:33 6 minutes, 33 seconds on strong foundations and that network continues to create durable long-term value for all our stakeholders. I now 6:41 6 minutes, 41 seconds request Ankip to take through the financials. Thank you. 6:46 6 minutes, 46 seconds Thank you, Mr. Loa. Good afternoon, ladies and gentlemen, and thank you for joining our earnings call. Before we uh 6:54 6 minutes, 54 seconds 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 by that now you have 7:03 7 minutes, 3 seconds had the opportunity to review our earnings presentation in press release. 7:07 7 minutes, 7 seconds While our CMD has already discussed the macro outlook, I will elaborate on the financial performance providing a more detailed analysis. 7:16 7 minutes, 16 seconds First on the quarterly numbers, our operating income for Q4 FI26 stood at rupees 7,737 7:25 7 minutes, 25 seconds million showcasing a growth of 86.6% YI. Our adjusted operating IBDA for Q4 7:33 7 minutes, 33 seconds FY26 stood at rupees 1,8 million showcasing a growth of 71.8% 7:41 7 minutes, 41 seconds Y. Adjusted IBIDA includes the impact of marktomarket losses on certain payables 7:48 7 minutes, 48 seconds against which corresponding hedging gains were recorded as per accounting standard. MTM losses are recognized 7:56 7 minutes, 56 seconds within expenses while related hedging gains are classified under other income to better reflect the operating 8:04 8 minutes, 4 seconds performance. Hedging gains of rupees 52.4 4 million have been added back to IBIDA to the extent they offset the NDM losses on the same underlying payables. 8:15 8 minutes, 15 seconds Our operating IBIDA for Q4 FI26 stood at rupees 966 million showcasing a growth 8:21 8 minutes, 21 seconds of 63% YI. Profit after tax for Q4 FI26 stood at rupees 76 million showcasing a 8:31 8 minutes, 31 seconds growth of 65.7% YI with with a margin of 9%. Now moving on to the annual numbers. Operating 8:40 8 minutes, 40 seconds income for the full year FI26 stood at uh rupees 21,836 million showcasing a grow showcasing a 8:48 8 minutes, 48 seconds growth of 90% while wire adjusted operating for FI26 stood at 8:56 8 minutes, 56 seconds rupees 2,91 million showcasing a growth of 82.4% 4% YI operating IBIDA for the 9:05 9 minutes, 5 seconds full year FI26 stood at rupees 2848 million showcasing a growth of 79.11% 9:13 9 minutes, 13 seconds Y profit after tax for the full year FA26 stood at rupees 258 million 9:20 9 minutes, 20 seconds showcasing a growth of 80.9% Y with a margin of 9.3%. 9:27 9 minutes, 27 seconds Now I would like to throw some light on key balance sheet ratios. Return on equity stood at at a healthy 32.9% while 9:36 9 minutes, 36 seconds return on capital employed for the same period was 37.5%. 9:42 9 minutes, 42 seconds The gross fixed asset turnover ratio stood at 33.2% times as on 31st March 2026. Our cash 9:53 9 minutes, 53 seconds conversion cycle as at March 2026 stood at 84 days. Receivable days improved 9:59 9 minutes, 59 seconds from 114 days in December 2025 to 86 days in March 2026 reflecting stronger 10:08 10 minutes, 8 seconds collections. in 20 days increase from 60 days in uh December 2025 to 86 days in 10:15 10 minutes, 15 seconds March 2026 primarily on account of buildup of raw material stock both uh to the support the execution of large 10:24 10 minutes, 24 seconds strategic orders and to secure adequate inventory of key inputs in light of surging global demand of AI compute infrastructure. 10:34 10 minutes, 34 seconds Our balance sheet strength is reflected by us being a zero net debt company. The 10:40 10 minutes, 40 seconds company had net free cash of rupees 833 million as on 31st March 2026. 10:49 10 minutes, 49 seconds The net cash generated from operating activities was rupes 1,715 million for the financial year 2026. 10:58 10 minutes, 58 seconds The board has recommended a dividend of 3 rupees per shares subject to shareholders approval. 11:05 11 minutes, 5 seconds Our strategic road map and growth priorities remains on track supported by a huge demand for high-end computing 11:13 11 minutes, 13 seconds solution, a healthy order book and a solid pipeline. We are positioned to deliver consistent revenue and profitability in the upcoming fiscal 11:22 11 minutes, 22 seconds year. Looking ahead, we remain confident of sustaining strong momentum and and are guiding a growth revenue growth of 35 to 40% over the next couple of years. 11:34 11 minutes, 34 seconds With this, I'll now hand over the call to Sema. 11:43 11 minutes, 43 seconds Thank you very much, sir. We will now begin the question and answer session. 11:48 11 minutes, 48 seconds Anyone who wishes to ask a question may press star and one on that touchstone telephone. 11:54 11 minutes, 54 seconds If you wish to withdraw yourself from the question queue, you may press star and two. 11:59 11 minutes, 59 seconds Participants are requested to use handset while asking a question. 12:04 12 minutes, 4 seconds Ladies and gentlemen will wait for a moment while the question queue assembles. 12:12 12 minutes, 12 seconds First question is from the line of Reno from IFL Securities. Please go ahead. 12:19 12 minutes, 19 seconds Yeah. Hi uh good afternoon team and congratulations for um the good performance. Um so the first question is um while we had alluded to the fact that 12:28 12 minutes, 28 seconds sequentially execution will be broadly flattish. Um can you uh throw inputs in terms of despite significantly higher 12:35 12 minutes, 35 seconds share of organic growth coming in from the base business our gross margins technically have not improved and margin sequentially were broadly at 12 and a 12:43 12 minutes, 43 seconds half%. Um so what has constrained uh the margin expansion despite um significant jump up in um based business revenues this quarter? 12:55 12 minutes, 55 seconds So uh Reu just a couple of thing one that uh it is not that the strategic orders have been lagging behind it's 13:04 13 minutes, 4 seconds just that they spilled over to the next quarter. Okay. So we are on track on that and we end we enter the new financial with a very strong order book 13:12 13 minutes, 12 seconds of about 2100 plus about 350 crores of the L1. So we enter with 2400 which is 13:19 13 minutes, 19 seconds more than uh the last year's revenue. As far as the margins are concerned I think you need to see the margin adjusted of 13:26 13 minutes, 26 seconds the uh adjust adjusted of the forex loss and gain. So actually we've done better 13:34 13 minutes, 34 seconds than the last quarter and that is reflective of uh how the margin is proceeded to be and it is within the guidance. 13:43 13 minutes, 43 seconds Sure because I was looking at the gross margin level uh which uh sequentially um does not show um improvement there. Um 13:51 13 minutes, 51 seconds understand that's point number one and um point number two um so how are we looking at the pipeline um of order flows both for the base business also on 14:00 14 minutes the strategic business we haven't heard of um any meaningful large order wins or L1 in the last couple of quarters um so 14:07 14 minutes, 7 seconds how is um the order pipelines from um the private service providers as well as from the direct government orders uh for 14:16 14 minutes, 16 seconds the AI infrastructure here actually if you really see what I said in my commentary very very clearly uh 14:23 14 minutes, 23 seconds basically the the way the business is looking to me is really fabulous actually really speaking I'm showing a order book of around basically 2100 14:32 14 minutes, 32 seconds crores but if I if I add the L1 it is 2400 crores which is more than the order more than my revenue current year's 14:39 14 minutes, 39 seconds revenue I think that itself is a very very solid uh thing if you really see at the beginning of the year we are 14:46 14 minutes, 46 seconds entering a year with a very very too heavy and too robust first order book already. Okay. So, whatever has to be added will be added and plus so as to basically organic business is growing. 14:57 14 minutes, 57 seconds That means that our run rate and our other business is growing. The company is not dependent on strategic orders as I have always been telling you that 15:04 15 minutes, 4 seconds primarily the company is running primarily on its own organic way and it's growing in its organic way. The strategic orders we are announcing as and as and when it is coming. We have 15:13 15 minutes, 13 seconds lot of discussions. you are aware about the kind of AI demand which is happening not only in India but across the world. 15:20 15 minutes, 20 seconds Okay. And basically and it seems like it will go on for at least next 18 to 24 months. So we have a huge basically 15:27 15 minutes, 27 seconds pipeline wherein basically lot of opportunities are there and I think there is there will be no drift of orders actually really speaking. 15:37 15 minutes, 37 seconds Got it. So basically X of strategic order orders of almost 16 16 a.5 billion uh the base order book today is about 5 15:44 15 minutes, 44 seconds billion rupees um and including the L1 orders it should add up close to 900 crores or 9 billion if I am right in 15:52 15 minutes, 52 seconds terms of numbers. Uh does that broadly order book? So I think the total order book if you look today is 2100 crores 16:01 16 minutes, 1 second plus about 300 to 24 plus 100 crores is the order book including L1 and to that 16:07 16 minutes, 7 seconds you add 4,400 crores of pipeline. So that will stack up to let's say uh about how much? 16:15 16 minutes, 15 seconds 6 and a half thousand. 16:16 16 minutes, 16 seconds 6 and a half thousand. Yeah. So that's a total including pipeline and order book. 16:21 16 minutes, 21 seconds Sean no I was just referring to the base orders excluding strategic. So strategic orders in the backlog is about close to 16 16 and a half billion and if I knock 16:29 16 minutes, 29 seconds that off from the 64 billion order book including L1 then today we have close to 800 right 16:37 16 minutes, 37 seconds yeah you are right you're saying that um got it so base business should be on track for 30 35% Kaggle growth that we 16:44 16 minutes, 44 seconds have uh been suggesting yeah basically I think seeing the order book you yourself will get that conviction 16:51 16 minutes, 51 seconds right and on the operating margins uh do we think cost headwinds and the current environment you have been fully able to pass through and EITA margins of 13 13 17:00 17 minutes and a half% um are they sustainable going forward for 2728 and what would be your headline of 17:08 17 minutes, 8 seconds guidance for fiscal 27 on revenue eida margins and keep so basically it will remain almost all 17:15 17 minutes, 15 seconds the same and I will let Ankit answer it yeah so re know so on the operating IDA margins we are guiding 13 to 14% % uh if 17:24 17 minutes, 24 seconds you understand that the there is a high topline growth and we are still sustaining the Iba margin. So that primarily gives the validation and the 17:33 17 minutes, 33 seconds resilience in the margins we are maintaining. So uh in this way all if if you see with this growth the leverage is 17:41 17 minutes, 41 seconds already embedded in the margins. So that's why we are uh guiding this 13 to 14% uh range for next couple of years 17:50 17 minutes, 50 seconds and on the revenue growth and on the revenue growth we are guiding 35 to 40% uh growth 17:59 17 minutes, 59 seconds and capex for fiscal 27 what are the plans there? So with the current capeex we are able to sustain the growth. There 18:08 18 minutes, 8 seconds is no capeex expansion uh uh no significant capex is expected in this financial year 27. So there will be the 18:17 18 minutes, 17 seconds routine capeex that will be coming across. 18:21 18 minutes, 21 seconds Okay. So we can expect the 2025 cr of base spending will continue. Yeah more or less. 18:30 18 minutes, 30 seconds Got it. Sure. Um, thanks much sir. I'll get back in the queue with more questions. Thank you and all the best. 18:37 18 minutes, 37 seconds Thank you. 18:40 18 minutes, 40 seconds Next question is from the line of Siman Nayak from ICS Securities. Please go ahead. 18:47 18 minutes, 47 seconds Uh, hi uh congrats on good organic growth. So how will the timeline for execution of the remaining strategic 18:54 18 minutes, 54 seconds order will uh pan out? That's my first question. And uh second question is regarding data center growth which has 19:01 19 minutes, 1 second uh slowed down. So can you share the reason behind it? Are we seeing increased competition here? And uh what will be the target cash conversion cycle for FI27? 19:12 19 minutes, 12 seconds Yeah, these are my questions. 19:15 19 minutes, 15 seconds Question strategic order. So basically strategic quarter timeline basically 19:22 19 minutes, 22 seconds it's as definitely as we have mentioned it I think it is expected it will be done quarter by quarter and we expect 19:30 19 minutes, 30 seconds that within the next three quarters I think we expect it to be done okay as far as the strategic order is concerned and the next question was next question 19:39 19 minutes, 39 seconds was the data center degrow yeah the basically I think you need to see it uh ma'am actually very clearly there are three pillars of growth 19:47 19 minutes, 47 seconds actually which we have basically just go don't go by the name the first is the HPC that is supercomputing that's already growing and that has been always 19:55 19 minutes, 55 seconds been around 30% of our business but since this year AI became 43% of our business till it's 24% of our business so it's not grow it's not stagnating 20:04 20 minutes, 4 seconds it's growing but basically since AI is AI is growing much faster actually the actually the data center in our case is the private cloud and please understand 20:13 20 minutes, 13 seconds that we basically so these are the three pillars first is HPC second is private cloud and third is AI and private cloud is the data center business which used 20:22 20 minutes, 22 seconds to be around 30 35% of the business that is showing as 24% because again because of the AI AI was 15% has become 43%. So 20:30 20 minutes, 30 seconds that's the reason you're saying that number but re in reality it is growing at a good momentum definitely not growing as good as AI but definitely 20:37 20 minutes, 37 seconds it's growing at a good momentum the data center which you're saying there is no degrowth the data center servers which you're saying that's not a focus area for us because you're not into box 20:46 20 minutes, 46 seconds selling it was only some marginal 5% of the business and it's around that so we don't even track it our business if you see totality more than 95% comes from 20:54 20 minutes, 54 seconds these three segments HPC private cloud and AI systems third Third question was the cash conversion cycle. 21:02 21 minutes, 2 seconds So yeah so simma so uh our cash conversion cycle typically operates from 90 to 110 days. Now uh this this is 21:12 21 minutes, 12 seconds something which cannot be projected for next year at least but we we would like to say that the range will remain like 21:19 21 minutes, 19 seconds that. There will be some uh increase in the inventory days projected for this year also. So but we will uh stay within the range of 90 to 110. 21:30 21 minutes, 30 seconds That's what we feel. 21:34 21 minutes, 34 seconds Got it. Thank you and all the Thank you. 21:42 21 minutes, 42 seconds Next question is from the line of Harendra Singh from Blackstone. Please go ahead. 21:48 21 minutes, 48 seconds Uh yeah hi. Uh uh so my question is basically on the India AI demand. So India is somewhere around uh 1 1.5 21:57 21 minutes, 57 seconds gawatt current and by 2030 the country plan is to grow up to 9 gawatt. So uh uh 22:05 22 minutes, 5 seconds I uh so uh first question is uh the way the industry as a country we are going to grow from 1.5 gawatt to 9 gawatt uh 22:13 22 minutes, 13 seconds do you see your industrial growth in in in line with the current uh country expectation and second question is a lot 22:22 22 minutes, 22 seconds of hyperscalers like Amazon Microsoft they are going very aggressive in the country and they are building up more than one gawatt 22:31 22 minutes, 31 seconds capacity in Hyderabad Mumbai. So uh like I saw Yota as your one of the customer. 22:38 22 minutes, 38 seconds Are you focused on hyperscalers or or like do you have any growth plans uh uh going into directly hyperscalers rather than the collo collocation providers? 22:48 22 minutes, 48 seconds Thank you. 22:50 22 minutes, 50 seconds So basically first thing is that India mission you know is based on many pillars actually there are five or seven pillars out out there actually really 22:58 22 minutes, 58 seconds speaking and government you know that prime minister's focus is very very clearly on the basically India has to become a leading uh country for 23:07 23 minutes, 7 seconds providing AI solutions actually so the government has been very clearly focusing upon it has been working very hard and have been trying to bring AI on 23:16 23 minutes, 16 seconds the forefront for the country so that India leaves an impact track to the world on the on the on the the AI space actually and so that is going on very 23:24 23 minutes, 24 seconds well in track government's current spending budget they are even ready to expend expand that also if they're able to do it so it's really the budget is 23:33 23 minutes, 33 seconds not the main criteria there the criteria is how fast they are able to spend the money and how fast they are able to get in the new infrastructure so there are 23:41 23 minutes, 41 seconds two parts of it as we have been telling you telling every time that one is basically government is trying to basically rent out GPUs from various new 23:50 23 minutes, 50 seconds cloud providers like Yota and others and uh basically another is that government is trying to set up their it's their own infra so setting up their own infra is 23:59 23 minutes, 59 seconds taking time but definitely that process has also started but in the meantime basically they are trying to take it in the RF model they are trying to take 24:06 24 minutes, 6 seconds GPUs from various kind of neo cloud providers so that is going on on track and that's happening very clearly and the government's own demand is also 24:15 24 minutes, 15 seconds there so as regards your particularly on the on the side of what is the kind of spend is happening is basically it's a 24:22 24 minutes, 22 seconds large amount they they were talking about 10,000 GPUs which became 25 25,000 GPUs now they are even ready to go up to 24:29 24 minutes, 29 seconds 100,000 GPUs also so government's focus is very clear very clearly they want to create AI infrastructure in the country 24:37 24 minutes, 37 seconds so all the AI startups and all the all the people who want to work on AI they don't feel the pinch of it and the GQs are made available to them so that they 24:46 24 minutes, 46 seconds can really do their work if if you got a chance you might have even seen the success of India AI summit the kind of traction it got the kind of people who 24:54 24 minutes, 54 seconds attending it it was only targeted at 100,000 people but more than 700,000 people really attended it and the kind of basically the prime minister himself 25:03 25 minutes, 3 seconds was there for 3 days so you can very well understand the kind of focus and attention they are trying to give it as regards your uh question basically 25:11 25 minutes, 11 seconds primarily that are we targeting hyperscalers at this point of time my my answer is that At this point of time we are not targeting really hyperscalers 25:20 25 minutes, 20 seconds because India is a market in which basically still is not a hyperscalerdriven market. It's primarily more of a sovereign and those kind of 25:27 25 minutes, 27 seconds market actually it is currently it is but definitely if hyperscalers come and if they are interested we can definitely bid for them we can definitely work with 25:35 25 minutes, 35 seconds them but at this point of time we are not targeting hyperscalers and I don't feel the hyper India is a hyperscaler market they are trying to set up large 25:43 25 minutes, 43 seconds data centers it's still these are in green field projects they will take time so as to basically come up maybe hbe can add 25:50 25 minutes, 50 seconds yes I think uh you have already covered all the details and as As far as you know demand is concerned Harinda I can definitely tell you the way the you know 25:59 25 minutes, 59 seconds investments are going up especially from the government side and now the enterprise in investment has also started coming in. So it it clearly 26:06 26 minutes, 6 seconds paves the way for us and we find a lot of headroom for us to grow and as you rightly mentioned that the currently the the capacity which India holds in terms 26:14 26 minutes, 14 seconds of data center that is anyways going to go up. So that clearly shows that you know there is no d in you know as far as the demand is concerned. So we we 26:22 26 minutes, 22 seconds definitely want to you know uh encase the opportunity and this is what we are doing. So you can find a you know lot of good quarters coming our way. 26:35 26 minutes, 35 seconds Yeah. 26:36 26 minutes, 36 seconds Uh uh thanks uh so uh that these are the two questions. So the way the industry and the AI industry is changing. So a 26:43 26 minutes, 43 seconds lot of companies like TCS they have they have come up with a companies like hyperval where they are serving these hyperscalers providing them colo 26:52 26 minutes, 52 seconds services where uh they are making huge 50 55% of margin in in future if you see growth in into these business and and 27:01 27 minutes, 1 second happy to see you in other other uh areas also where which are more profitable and you can add value because you are contributing to major part of the the 27:09 27 minutes, 9 seconds the items which goes into the data Yeah, all these initiatives really add to our business actually all the basically you 27:18 27 minutes, 18 seconds see all these we call them global service providers actually or basically gsis like PCS, Infosys and basically 27:25 27 minutes, 25 seconds Vipro and all these. So basically they they are all evolving and they are all developing different kind of products so as to service the AI workload. So all 27:34 27 minutes, 34 seconds these basically offer us more opportunities and all these are our customers or our probable customers. We are under NDA so we cannot disclose 27:42 27 minutes, 42 seconds which customer what they are trying to do but all these definitely add because they need AI infrastructure they need the AI stack and everything which needs 27:50 27 minutes, 50 seconds to be done on that basis on that they offer the services to the customer so more and more AI workload is coming to them and so that AI workload delivery is 27:58 27 minutes, 58 seconds there so definitely that's a good business opportunity for us yeah thank you thank you 28:05 28 minutes, 5 seconds thank you ladies and gentlemen in order to ensure that the management is able to address questions from all the participant in the question queue. 28:13 28 minutes, 13 seconds Please restrict yourself to two questions per participant. Should you have a follow-up question, please rejoin the queue. Next question is from the 28:22 28 minutes, 22 seconds line of Ak from AK investments. Please go ahead. 28:26 28 minutes, 26 seconds Hi sir, first of all, congratulations for the greatest great set of number. Uh my first voice is low. 28:35 28 minutes, 35 seconds Hi sir, am I audible? Yes. 28:39 28 minutes, 39 seconds Okay. Uh so uh my first question is regarding the promoter stell uh in the quarter 4. So the promoter have uh 28:46 28 minutes, 46 seconds nearly sold the four person st. So what was the reason for the same and do we expect any further dilution in the promoter holding going forward? 28:55 28 minutes, 55 seconds Yeah. So I think uh first answer the second question first we are not going to dilute uh we we this this sale was 29:03 29 minutes, 3 seconds done in the month of February. We have we are not going to dilute for 20 months from there. So that's already 29:10 29 minutes, 10 seconds confirmed as ST sale of course it was done because there was there was some there was a liquidity there was limited 29:17 29 minutes, 17 seconds liquidity so by text sale uh we have been able to increase the liquidity of the stock 29:24 29 minutes, 24 seconds okay okay sir and uh sir my second question is regarding the presentation uh so there is one line in the presentation that we have commissioned 29:33 29 minutes, 33 seconds the new state-ofthe-art production uh facilities spanning across 15,000 square foot. Uh so is this the new manufacturing facility that we have 29:42 29 minutes, 42 seconds commissioned or if yes then how much capacity or how much incremental capacity does it bring? 29:48 29 minutes, 48 seconds This yes this is a state-of-the-art uh manufacturing facility which we have set up and you know the largely the target was to you know start manufacturing the 29:56 29 minutes, 56 seconds range of those systems which we had not been manufacturing earlier and now as you can see that we have introduced the new architecture of uh you know our 30:03 30 minutes, 3 seconds latest generation systems as well. So keeping that in mind this facility has been set up and you'll be happy to know that with this facility we'll also be 30:11 30 minutes, 11 seconds designing the complete range of liquid cool systems as well and now you know the idea was to increase the density per rack in our case and that is what we 30:18 30 minutes, 18 seconds have you know this facility has helped us and now we'll be able to scale even beyond you know 150 kilowatt per rack 30:25 30 minutes, 25 seconds kind of an architecture. So this facility was very important for us. So that was in there uh you know in in the process earlier. So now we have 30:33 30 minutes, 33 seconds completed it and we'll be targeting the larger deployments with the help of this facility. 30:39 30 minutes, 39 seconds Okay sir. So currently what is the total revenue capabilities that we uh have from all our capacity. 30:46 30 minutes, 46 seconds So basically actually you'll have to understand the company very well. This is a technology company. This is not a capacity driven company. Actually we are 30:54 30 minutes, 54 seconds capabilitydriven company. We have never said we never work on capacity. Our capacity utilization would be around 65 31:01 31 minutes, 1 second to 70% only. Primarily we are not driven by just a volume sale or something of that nature. You have to understand the basics of the company. Actually the 31:10 31 minutes, 10 seconds company doesn't work on capacity. We work on capability. If if tomorrow Nvidia's new Ver Rubin is coming up as a 31:19 31 minutes, 19 seconds new we are already set up for the partnership for that. Tomorrow if we have to manufacture ver routine based servers and their racks and all that 31:26 31 minutes, 26 seconds they definitely we need to set up something we'll definitely set up but again that will not be capacity based that will be capability based. 31:34 31 minutes, 34 seconds Okay sir. Okay. Uh all right sir and uh thank you so much sir. Thank you. Thank you. 31:43 31 minutes, 43 seconds Next question is from the line of chi Chihu from pitted asset management. Please go ahead. 31:53 31 minutes, 53 seconds Hello. Uh can you hear me? Yes. 31:57 31 minutes, 57 seconds Hey uh Sanjay uh management uh uh congratulation on a good year. Um I have two questions. Um number one uh globally 32:06 32 minutes, 6 seconds we see this aentic AI um phenomenon this year you today driving up. 32:13 32 minutes, 13 seconds Sorry to interrupt you. Your voice seems very low. We are unable to hear you. Can you be uh a bit closer to the mic? 32:23 32 minutes, 23 seconds Okay. Can you hear me? Yes. Can you hear me? Yes. Yes. 32:28 32 minutes, 28 seconds Okay. So, my first question is the u agentic AI impact on the CPU. Uh here today we see a lot of demand uh after 32:37 32 minutes, 37 seconds the uh open claw uh launch. So driving a lot of CPU uh usage. So we saw the Intel 32:44 32 minutes, 44 seconds report a very very strong earnings and outlook. So for net web I think the relationship is on the high performing 32:52 32 minutes, 52 seconds computing uh segment where you sell the CPU server. So last year apparently the AI system is very good but then the HPC 33:02 33 minutes, 2 seconds segment is more steady. My question is because of this agentic AI trend, do you see a much faster acceleration in the 33:11 33 minutes, 11 seconds HPC uh salmon revenue this year and maybe next year? Uh that's my first question. 33:19 33 minutes, 19 seconds So basically telling you chi basically the thanks for your question the agentic AI is definitely again one of the 33:27 33 minutes, 27 seconds factors which is driving the AI actually and as regards your relation between basically agentic AI driving HPC sales I 33:34 33 minutes, 34 seconds don't think that is going to impact I don't think in this current year at least in this geopolitical region what I personally feel HPC in itself is growing 33:44 33 minutes, 44 seconds very well basically you are seeing HPC basically uh has uh growth around it has 33:51 33 minutes, 51 seconds grown by around 31%. Which is not less actually but you are seeing the number low because the AI has grown too much so that is showing it that way but let me 34:00 34 minutes tell you HPC because national NS national supercomputing mission 2.0 zero is already there plus basically adoption 34:07 34 minutes, 7 seconds of adoption of HPC and AI together is also happening across verticals across so if you see the the automo industry is 34:15 34 minutes, 15 seconds using it the basically there's quite a lot of use in the oil and gas and different areas so I personally feel 34:22 34 minutes, 22 seconds that the HQC will keep on growing but definitely AI will grow at a larger pace but as regards your your question on Intel's the current development I feel 34:31 34 minutes, 31 seconds that will take some more time to create an impact to the HPC market growth in India as as what I can understand. 34:42 34 minutes, 42 seconds Okay, understood. Thank you. Uh my second question is regarding the healthiness of the India AI investment 34:50 34 minutes, 50 seconds by the government because I saw some articles saying that uh the investment in the downstream data center uh the 34:59 34 minutes, 59 seconds take up rate is quite low. So that uh some of these uh data center they have to rent it out to the other customers 35:07 35 minutes, 7 seconds outside of the India AI mission. Uh can you from your perspective comment about how healthy is the downstream adoption 35:16 35 minutes, 16 seconds of the Indian AI mission investment by the government? Thank you. 35:22 35 minutes, 22 seconds I see thanks for your question. So as we have explained earlier also so government of India is very clear at the moment that you know they want India to 35:29 35 minutes, 29 seconds become the AI service industry for the world and for that purpose you know this process of India emission has been going on for last you know almost half a 35:37 35 minutes, 37 seconds decade and the process started long back and this mission is very clear that the investments are going on two fronts one 35:45 35 minutes, 45 seconds that they want to basically build facilities through the CSPs and the second is that they want to build the facilities uh on on bas 35:54 35 minutes, 54 seconds So investment outlays whatever has been outlined by government of India so far has been as part of their first uh you 36:00 36 minutes know tranch of investments and that itself clearly signifies the efforts by the government of India and there is going to you know there is anyways 36:08 36 minutes, 8 seconds leaving an impact all over country because enterprises and CSPs all are putting a you know putting their efforts 36:14 36 minutes, 14 seconds to build up the facilities and now going forward the expectation is that the investments are only going to go up from here by by government also and by the 36:23 36 minutes, 23 seconds enterprises. So the opportunity gives us a lot of headroom to grow and we are also you know welcoming the opportunity with you know with open hands and the 36:31 36 minutes, 31 seconds kind of work we are doing and as you can see the new manufacturing facility which we have set up there is also keeping in mind that we wanted to add a new 36:39 36 minutes, 39 seconds capability of designing dense GPU systems which can serve such kind of requirements coming from both the fronts be ESP front or the on-pre requirement 36:48 36 minutes, 48 seconds front of government of India. So we are you know uh absolutely capable absolutely ready to address the requirement. So I think this is quite a 36:57 36 minutes, 57 seconds good opportunity for us and the data center investment also is increasing from the corporate side also. 37:03 37 minutes, 3 seconds People are really interested because they have demand on hand and so they are also trying to government is already buyer. So people are trying to put it takes some time to put up the data 37:11 37 minutes, 11 seconds center investment as you understand that but people are already working there is lot of interest around that if you see the current tax the government taxation 37:20 37 minutes, 20 seconds also which they announced. So they are promoting data centers. So more and more data center investments are coming in. 37:25 37 minutes, 25 seconds So we are very we are pretty sure the kind of basically the demand we are seeing and kind of interest from the government is seeing so things will roll on very well. 37:36 37 minutes, 36 seconds Okay. Thank you. Thank you very much. Thank you. 37:43 37 minutes, 43 seconds Next question is from the line of Sepa from Securities. Please proceed. 37:49 37 minutes, 49 seconds Yeah thanks. Thanks for the opportunity and complex on a good execution despite supply chain management issue and its 37:56 37 minutes, 56 seconds impact on the raw materials. Sir, the first question is uh this book guidance of 3540 and margin of 134 38:05 38 minutes, 5 seconds uh both of which is for the base business excluding strategic deal how to consider this guidance. 38:16 38 minutes, 16 seconds So the uh revenue growth 35 he's asking about the VA margin. So it's it's for the overall overall this is the enterprise level guidance. 38:29 38 minutes, 29 seconds Uh but strategic order you are saying in the first three quarters it would be executed. So that itself is a big growth driver for the coming year. 38:40 38 minutes, 40 seconds Mhm. Correct. So the growth has to be higher than 3540. Right. 38:46 38 minutes, 46 seconds So we on the on the we are we are guiding you the best case. Don't worry at all. 38:54 38 minutes, 54 seconds Okay. Okay. So because uh because we we are entering the year with 2400 cr already as a order book. Okay. Including 39:02 39 minutes, 2 seconds the L1 that itself is a robust signal that basically we are entering the year with with the order book which is more 39:09 39 minutes, 9 seconds than the last year's turnover. That is there are more business edition will happen. But you understand that we are not box pusher Sanji G. We are primarily 39:17 39 minutes, 17 seconds more into proactive sellers rather than reactive sellers. So basically we just don't want to become a broad box pusher also. We the always the intention of the 39:26 39 minutes, 26 seconds company has been to engage into more and more value added kind of deals. So if you see my customers also are 50% is 39:33 39 minutes, 33 seconds government 50% is enterprise and enterprise customers are also large customers primarily. So basically those kind of business really takes time to 39:41 39 minutes, 41 seconds completely loop in and get in. So I feel the kind of revenue guidance which we are giving we would like to maintain it at 35 to 40%. 39:51 39 minutes, 51 seconds Okay. Okay. And sir uh in terms of the current inventory level, it is fair to 39:58 39 minutes, 58 seconds assume that uh the current order book to some extent uh can be compensated with 40:06 40 minutes, 6 seconds the current inventory which in turn to some extent uh will help you to maintain margin because the inventory could be 40:14 40 minutes, 14 seconds built at a price lower than the current spot rate. 40:19 40 minutes, 19 seconds I think we will not like to guide on the inventory and the margin actually overall I like to guide you the margins will remain at that same 13 to 14% we 40:27 40 minutes, 27 seconds have we have been always been you see that last year also we performed as per our guidance and we are very sure that we will do it this year also 40:35 40 minutes, 35 seconds okay okay and just last question in terms of export sales any development progress you want to share what 40:43 40 minutes, 43 seconds percentage of revenue it has formed sorry to interrupt Mr. Rasha your voice is breaking. 40:48 40 minutes, 48 seconds I I will I will take this call. I understood I understood Sep G's question but Sep G basically you know the AI 40:55 40 minutes, 55 seconds demand is unbaited. It's very difficult to fulfill the domestic demand itself. 41:00 41 minutes So really frankly speaking we are the focus on exports we are not getting time to do it and currently the worldwide AI demand is invited if we so basically let 41:09 41 minutes, 9 seconds me first suffice the domestic demand then we look into exports. So it will remain around the 5% which we have been currently doing. It will remain around that only. 41:19 41 minutes, 19 seconds Okay. And sir, last question. Apart from Google, even AWS and other hyperscaler are introducing their own chip. So uh in 41:28 41 minutes, 28 seconds this scenario are we geared up in terms of tie up beyond the top three chip providers or manufacturer because if 41:36 41 minutes, 36 seconds this uh scale increases through hyperscaler produce chip design uh can 41:44 41 minutes, 44 seconds you share the progress how we are tying up and making sure that the motherboard design also meet a variety of chip designs. 41:53 41 minutes, 53 seconds So sit this this has been uh you know uh these efforts have been going on at their end for quite some time because 42:01 42 minutes, 1 second you know uh emergence of TPU is not something which has happened just now. 42:05 42 minutes, 5 seconds So we are aware of the progress which is happening on the other side of the market as well and we are open to go in that direction also as long as the 42:14 42 minutes, 14 seconds significant development has been shown and as you know that we have got our in-house design teams also that is the reason we were able to you know take up 42:23 42 minutes, 23 seconds the risk based architecture so fast. So same way we will be able to look at the other opport other uh you know chip makers also as long as there is a 42:31 42 minutes, 31 seconds significant technological advancement at their end which has got an acceptance in the market. So as a design team as an OEM we don't have any reservation to it. 42:41 42 minutes, 41 seconds Okay. Thanks and all the best. Thank you. Thank you. 42:48 42 minutes, 48 seconds Next question is from the line of Vine Menan from Monarch Network Capital. Please go ahead. 42:55 42 minutes, 55 seconds Uh hi sir. Hi thank you for the opportunity and congratulations on great execution this quarter sir. A couple of questions on my side. Uh on the 43:02 43 minutes, 2 seconds component pricing uh are you seeing any kind of softness or are we still looking at component prices being at these levels for maybe the next few quarters. 43:13 43 minutes, 13 seconds So basically really speaking I I I I cannot I I am not supposed to guide on the component pricing on my call 43:20 43 minutes, 20 seconds actually but let me tell you the AI demand is really unbaited. So that that is definitely putting pressure on the components actually really speaking. So 43:29 43 minutes, 29 seconds if it will remain unbaited definitely there will be pressure on the component prices and component supply chains. But basically as as as I have been always 43:37 43 minutes, 37 seconds been saying that that we are proactive sellers we we we we have good projection of what is going to come what is not going to come. So we plan our 43:45 43 minutes, 45 seconds inventories and our contracts our relationship with OEMs really basically are aligning that way. So it doesn't impact us much in case there is a price 43:54 43 minutes, 54 seconds increase and so basically we can always pass on to the new customers. 44:00 44 minutes Okay. Okay. Thanks. And uh just a couple of more things. One is you know we seeing demand move from you know training to inference you know last few 44:08 44 minutes, 8 seconds quarters. So uh that is obviously less GPU dependent and more as uh you know like Sep mentioned maybe TPUs are also 44:16 44 minutes, 16 seconds coming in. So how are we going to get impacted in terms of the demand shifting? Are we going to see more demand with inference demand improving 44:23 44 minutes, 23 seconds or how does the you know economics work for us there? 44:28 44 minutes, 28 seconds Many thanks for the question. So first of all you know uh as regards you know our readiness is concerned we have always been ready to address the demand 44:36 44 minutes, 36 seconds coming from the training and the infant side both sides of the market and that's the reason you know that was reflected in our uh new introduction of our 44:43 44 minutes, 43 seconds products as well because we have kept on adding those products also which can take care of inference exclusively or even the products which can take care of 44:51 44 minutes, 51 seconds training and inference both. So from the readiness perspective we have been you know uh you know seeing the market development and accordingly only we have 45:00 45 minutes designed our products based on that and secondly as regards you know whether the uh requirement will go up from here or it'll go down. So I can definitely tell 45:07 45 minutes, 7 seconds you that the demand is only going to go up from here. Reason being on one hand the training kind of a work has already been going on in the country and outside 45:15 45 minutes, 15 seconds already and at the same time whatever development has been done on the training side earlier. Now the time is that uh you know inference will also 45:23 45 minutes, 23 seconds generate the additional demand. So I think it is good for us that inference is also taking up you know and uh this is only going to add to the overall 45:31 45 minutes, 31 seconds demand. So I think it is a good situation for us to handle and we are pretty much ready with both the type of products and both the type of solutions which can take care of the requirement. 45:42 45 minutes, 42 seconds Okay. Okay. And just one more thing on the uh the guidance of 35 40% that is inclusive of the AI emission deal which we will execute over the next two three 45:50 45 minutes, 50 seconds quarters guidance is inclusive of strategic. 46:03 46 minutes, 3 seconds So the guidance on the top line is not inclusive of the strategic order. It is the organ this is it is the normal 46:10 46 minutes, 10 seconds or yeah organic order which is about 35%. 46:15 46 minutes, 15 seconds Okay. Okay. That that is helpful. Uh that's all from my side. Thank you so much and all the best. Thank you. Thank you. Thank you. 46:24 46 minutes, 24 seconds Next question is from the line of Puja Sit from Yes Security. Please proceed. 46:31 46 minutes, 31 seconds Uh hi uh first of all thank you uh and congrats for having a good set of 46:37 46 minutes, 37 seconds numbers. Uh I just want a clarification in the strategic order book whatever when you guys check it is comes under your AI segment. 46:50 46 minutes, 50 seconds Yes. 46:52 46 minutes, 52 seconds Uh so as you are guiding us 35 to 40% growth. So could you throw some lights on the segment twice in which segment 47:01 47 minutes, 1 second you are seeing except for uh AI because HPC our whole business that is HPG and HPS uh where I can remove 28% of growth 47:11 47 minutes, 11 seconds uh this year so how we are seeing this further on so I think we we we give guidance 47:18 47 minutes, 18 seconds overall basis too much of detail to be given for a guidance we would like to stick to the guidance on an overall basis. Thank you. 47:27 47 minutes, 27 seconds Uh but sir some sort of uh guidance like uh in which segment you are seeing? 47:34 47 minutes, 34 seconds So basically our all the three segments ma'am if you understand three segments today please understand our core business. Okay you understand our 47:41 47 minutes, 41 seconds business our business is HPC our business is private cloud and AI. Now you tell me which segment will not grow ma'am. I give you a reverse question. 47:52 47 minutes, 52 seconds Basically HTC is a segment which will grow very heavily. private cloud, data center is going unbaited but AI is worldwide grown. So all the three 47:59 47 minutes, 59 seconds segments 95% of business is coming the companies into three three businesses and all the three segments are really growing at a very good pace. So 48:07 48 minutes, 7 seconds definitely that will grow. So definitely HTC and CL but the AI should AI should grow at a at a faster pace but I 48:15 48 minutes, 15 seconds personally feel in future I would like I was guiding that AI should be around 25 to 30%. I can tell you that AI will remain around 35% of my business. 48:24 48 minutes, 24 seconds Balance will be shared equally between the HPC and private cloud. 48:30 48 minutes, 30 seconds Okay. And so one more question as this further we have seen there was a net borrowing has increased about 270 K. So 48:39 48 minutes, 39 seconds could you give a breakdown why this happened? 48:44 48 minutes, 44 seconds So these are largely to to fund the strategic orders that we had been uh these are very short-term borings. These 48:53 48 minutes, 53 seconds are no uh long-term borings and these are primarily to execute the working capital required for any large strategic 49:00 49 minutes orders or at the same time any uh regular orders which are going through and uh this this gets settled in a very short span of time. So I mean you can 49:09 49 minutes, 9 seconds take it that this borrowing is transitionary. Okay. 49:17 49 minutes, 17 seconds Thank you. Thank you. 49:24 49 minutes, 24 seconds Next question is from the line of Mansima Singh City from City Capital. Please go ahead. 49:31 49 minutes, 31 seconds Hello sir, I'm out. Yes, please go ahead. 49:36 49 minutes, 36 seconds Uh sir uh I wanted to know uh regarding our cash conversion cycle like I know it 49:43 49 minutes, 43 seconds already been asked the question but uh how uh the thing is uh uh the cash conversion cycle is more than 100 days 49:52 49 minutes, 52 seconds so don't you think uh with increasing roe and ro you know it'll be difficult for us like we'll be you know that we 49:59 49 minutes, 59 seconds need to reduce the cash cycle drastically for that drastically No, sorry just a minute. So 50:07 50 minutes, 7 seconds I don't think it is 100 days. I think we have shared the presentation. If you would have had a look at the presentation, it is 84 days and 50:14 50 minutes, 14 seconds primarily because of inventory which we have uh you know uh which which we have created an inventory uh for our large 50:24 50 minutes, 24 seconds orders which we are carrying in hand as of date if you can add to that. So yeah correctly mentioned by Sanji sir. So 50:30 50 minutes, 30 seconds it's not 100 it's it's around 84 and uh on the the still the increase is because of the inventory days. If you see the 50:38 50 minutes, 38 seconds receivable days from the last quarter it has significantly improved and inventory days has gone up uh on the on the account of stocking the critical 50:47 50 minutes, 47 seconds components for uh potential and large orders and plus basically we have always guided that our basically our kind of business will remain between 80 to 90. 50:58 50 minutes, 58 seconds So I think this is not a surprise. 51:00 51 minutes Okay. Actually the it was guided here only in the con like more than 120 that's why I was asking it has come down 51:07 51 minutes, 7 seconds 90 to 110 is our standard guidance. So yeah but we have been actually I think it should be okay with that. 51:15 51 minutes, 15 seconds Okay. Okay. And my last second question is regarding our exports. So in uh in the I was uh in the last calls you were 51:23 51 minutes, 23 seconds saying that you were tracking different exports also. So I wanted to know regarding that any pipeline regarding our exports per se. 51:30 51 minutes, 30 seconds So as you could uh you know I hope you you heard our answer earlier also that you know see the kind of market we see 51:37 51 minutes, 37 seconds in the domestic space. So we are right now you know trying to fulfill the demand coming from the domestic market itself because there is a lot of headroom for us to grow address the you 51:46 51 minutes, 46 seconds know you know the overall uh uh you know incremental growth in the market and all that. So first we once we are you know 51:53 51 minutes, 53 seconds able to address the complete market here in India definitely we'll be going out as well but uh you know the priority right now is domestic and uh you know 52:02 52 minutes, 2 seconds since domestic is anyways giving us the required quantum of growth so there is no harm focusing on this but yes you 52:09 52 minutes, 9 seconds know going outside India is definitely you know you know in our pipeline and we'll be focusing on that as well. 52:16 52 minutes, 16 seconds Okay. So my last question like we have a 4,000 K pipeline right? Uh can you tell me what percentage of that can be converted on a safer side in this financial year? 52:26 52 minutes, 26 seconds 60%. 52:28 52 minutes, 28 seconds 60% financial year. No no that is basically yeah you so generally the conversion is about uh 60% but this will fuel about 1 and a 52:37 52 minutes, 37 seconds half to two years of you know yeah 20 18 to 24 months. So it's not that all of the 60% will happen this year. 52:45 52 minutes, 45 seconds Okay. Right. Okay. for the four we'll take. 52:49 52 minutes, 49 seconds Sorry to interrupt Mr. Seti may please request you to rejoin the queue sir for the followup question. Thank you. Thank you. 52:57 52 minutes, 57 seconds Ladies and gentlemen, in order to ensure that the management is able to address question from all the participant in the question queue, please restrict yourself to one question only. 53:07 53 minutes, 7 seconds Next question is from the line of Watsal Agaral from who is retail investor. Please go ahead. Am I audible? 53:15 53 minutes, 15 seconds Yes. Yes. Yes. Go ahead. 53:16 53 minutes, 16 seconds Yeah. Yes sir. Sir sir given the strong ass position on the balance sheet can you explain the reason behind the increase in the short-term borrowings because it appears counterintuitive sir. 53:28 53 minutes, 28 seconds So uh uh it's not that uh there is a the borrowings have some covenants when we 53:35 53 minutes, 35 seconds borrow the funds we have to maintain the borrowing period for uh some period of time and the these are the numbers basis 53:43 53 minutes, 43 seconds a reporting date. So there are RBA guidelines where the uh the the uh WCDLs are supposed to be maintained for 53:50 53 minutes, 50 seconds certain period of time. So to avoid that that's why it's coming here and uh we do have cash but we cannot settle the 53:58 53 minutes, 58 seconds borrowings uh with them. So they are the commitments which are given to lender in the coordination with the RBA circulars. 54:06 54 minutes, 6 seconds And secondly sir I was just trying to understand the business segment. Can you please explain the difference between the our private cloud business segment and the AI systems business segment sir? 54:19 54 minutes, 19 seconds See we we have talked about it uh in you know the in the earlier quarters also. 54:23 54 minutes, 23 seconds So the difference is just that private cloud is basically catering to a different side of the market wherein you know the where the convergence of 54:32 54 minutes, 32 seconds compute network and uh you know memory happens whereas the AI side of the market AI system is largely taking care of the AI workloads. If you are trying 54:41 54 minutes, 41 seconds to know about what is the difference in the workload type from these two markets then the answer is this. And if you want to know about what is the difference in 54:50 54 minutes, 50 seconds the uh you know from the business side of it that who all are the probable customers from the private cloud and who all are the probable customers from the 54:57 54 minutes, 57 seconds EI system side then my my uh I can basically further explain. I hope I have answered you that you know the private cloud is largely for the convergence of 55:05 55 minutes, 5 seconds compute network you know and hypercon converge in a put together in a single platform that is for the private cloud and SCI whereas AI system is largely meant for the purpose of AI workloads. 55:17 55 minutes, 17 seconds No sir because my question is that for data centers it should be in the AI systems business rather than the private cloud if my understanding is correct. to 55:26 55 minutes, 26 seconds data center as such you know see one thing is very clear that data center is assets which cuts across all the verticals for us product verticles but 55:33 55 minutes, 33 seconds largely data center is largely you know focus around you know uh the private cloud and NCI for us reason being that the data center workloads what we talk 55:42 55 minutes, 42 seconds about are the workloads wherein the convergence of compute with the storage and the you know network put together 55:49 55 minutes, 49 seconds happen so that is basically dealt with dealt in case of private cloud NCI that's the reason we don't count as part of AI system but we counted as 55:58 55 minutes, 58 seconds part of private cloud and that's how these two are related. Thanks a lot. Thanks. Thank you. 56:06 56 minutes, 6 seconds Thank you. 56:08 56 minutes, 8 seconds Next question is from the line of Prager from Wealthw. 56:18 56 minutes, 18 seconds Yeah. So my first question is that uh as per what earlier participant had said that um out of your total uh total 56:26 56 minutes, 26 seconds pipeline 50% would be converted and out of that um some of the orders would be passed on to one two years. So like did I hear that correctly? 56:39 56 minutes, 39 seconds Do we I think basically uh what what we mentioned is uh basically what we mentioned is that 56:47 56 minutes, 47 seconds we somebody asked us that pipeline cut how much time will pipelines be converted. So pipeline is a very very dynamic situation which keeps on 56:55 56 minutes, 55 seconds changing every day. So whatever on the reported rate whatever pipeline is that pipeline normally gets 60% of it gets converted but it takes around 1 and a 57:04 57 minutes, 4 seconds half years around 18 months to get converted all of it all of it total of it okay so just to explain you the conversion 57:13 57 minutes, 13 seconds happens like every day right right what is saying that this pipeline which is sitting today may convert the the 100% 57:20 57 minutes, 20 seconds of may get converted by one and a half year but it will happen in transfers and new pipeline will also keep entering into this. This is a very dynamic thing, 57:29 57 minutes, 29 seconds right? Pipeline someone will convert into order, some will go out of it. New pipeline will get entered. So this is a very dynamic situation. 57:38 57 minutes, 38 seconds Okay. And your order book the amount is 2,400 including the N1. So ideally as per what 57:46 57 minutes, 46 seconds I'm able to understand it like it's like it gets executed in three to six months, right? So the revenue visibility that 57:55 57 minutes, 55 seconds like for this order book is 3 to 6 months only or am I missing something out in this? 58:02 58 minutes, 2 seconds So basically as I our normally our shipping cycle is very different normal our our order cycle is somewhere around 58:10 58 minutes, 10 seconds 10 10 to 10 to 20 weeks we normally ship out. Okay. It used to be 10 to 16 weeks but it can be 10 to 20 weeks. it can 58:19 58 minutes, 19 seconds normally go up but as far as strategic orders are concerned we are not guiding on the execution but basically what I said is that the strate or strategic 58:27 58 minutes, 27 seconds order should go in three next three quarters actually and uh phase wise and as regards the organic order book is 58:34 58 minutes, 34 seconds concerned we feel that within 18 to 20 weeks you should get build out okay I'm sorry can you bifocate the 58:42 58 minutes, 42 seconds strategic order and the your idle order to me I'm sorry like I mean your attachment is 58:49 58 minutes, 49 seconds The presentation you mentioned very clearly 1,600 K is the strategic order. 472 K is 58:57 58 minutes, 57 seconds the organic order and 327 K is my L1 which is again organic. Which is again organic. 59:05 59 minutes, 5 seconds Okay. Okay. Okay sir. Okay. That was all from my s. Thank you sir. 59:11 59 minutes, 11 seconds Thank you. Thank you ladies and gentlemen. We will take this as the last question for the day. I now 59:19 59 minutes, 19 seconds hand the conference over to the management for the closing comments. 59:26 59 minutes, 26 seconds Thank you. Thank you for taking out time and joining us. Thank you so much. Appreciate your interest. Thank you. 59:33 59 minutes, 33 seconds Thank you sir. On behalf of ICA securities, that concludes this conference. Thank you all for joining us and you may now disconnect your lines.