Summary
Netweb Technologies India Limited - Q3 FY26 Earnings Call Summary Monday, January 19, 2026 4:00 PM
Event Participants
Executives 5 Ankit Kumar Singhal (CFO), Hirday Vikram (Chief Sales and Marketing Officer), Navin Lodha (Whole-Time Director), Sanjay Lodha (Chairman and Managing Director), Sanjeev Sancheti (IR Advisor)
Analysts 8 Akshay (AK Investments), Aman Soni (Nvest Analytics Advisory LLP), Anand B (Ksema Wealth Private Limited), Chi-Ho Wong (Pictet AM), Nishant Gupta (Kotak PMS), Onkar Ghugardare (Shree Investments), Raman KV (Sequent Investments), Sandeep Shah (Equirus Securities), Seema Nayak (ICICI Securities), Shashank Jha (SB Capital), Vinay Menon (Monarch Capital)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Operating Income | ₹804.9 crores | +141% YoY, +165% QoQ; driven by execution of large strategic order worth ₹450.4 crores. |
| Operating EBITDA | ₹97.9 crores | +127.1% YoY, +115.4% QoQ; margin stood at 12.2%. |
| Profit After Tax (PAT) | ₹73.3 crores | +146.7% YoY, +133.2% QoQ; margin at 9%. |
| 9M FY26 Revenue | ₹1,409.9 crores | +92% YoY; AI systems contributed 48% of 9M revenue. |
| 9M EBITDA Margin | 13.4% | -40 bps YoY; lower margins due to strategic deal mix. |
| 9M ROE / ROCE | 30.5% / 41.3% | Reflects high capital efficiency and capability-led business model. |
| Cash Conv. Cycle | 69 days | Significant improvement QoQ; inventory days maintained at 60 days. |
| Net Free Cash | ₹190.08 crores | Zero net debt position maintained as of Dec 31, 2025. |
| Organic Order Book | ₹525.8 crores | Core pipeline remains robust; L1 position at ~₹300 crores. |
| Strategic Order Book | ₹1,733.6 crores | Total strategic pipeline following partial execution in Q3. |
Geographic & Segment Commentary
AI Systems: This segment contributed 64% of Q3 revenue and 48% of 9M FY26 revenue following the execution of a ₹450.4 crore national significance order. Growth is driven by the India AI Mission and increased demand for GPU-based compute infrastructure.
HPC & Private Cloud: Both segments witnessed >20% YTD growth despite appearing muted in Q3 due to the high base of strategic order execution. Management noted sustained demand from supercomputing initiatives and the booming domestic datacenter market.
Company-Specific & Strategic Commentary
Manufacturing Capability: Management clarifies the company is “capability-based” rather than “capacity-based,” with existing facilities sufficient for revenues up to ₹2,500–₹3,000 crores without major CAPEX.
Supply Chain Resilience: Despite global shortages in Flash and HBM (High Bandwidth Memory), Netweb maintained delivery timelines through proactive planning and priority access via OEM partnerships.
Talent Acquisition: Headcount has increased from 240 at IPO to over 600, with an R&D team of 100+ focused on indigenous hardware and software stack development.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Organic Revenue Growth | 30% - 40% CAGR | Targets sustainable growth over the next 2-3 years based on robust order book. |
| Strategic Order Execution | One-third of total | Management targets executing 33% of the ₹2,184 crore strategic order pool by end of FY26. |
| Margins (Strategic) | -200 bps at PBT level | Strategic orders are priced competitively to secure long-term positioning. |
| CAPEX | Minimal | No major capacity expansion required until revenue crosses ₹2.5k-3k crore threshold. |
Risks & Constraints
| Risk | Context |
|---|---|
| Supply Chain/Component Costs | Global surge in AI demand has caused price hikes in DRAM and HBM; Netweb mitigates this through fixed-price alignments for new orders and deep supplier ties. |
| Currency Volatility | Exposure to imported components; mitigated by a hedging policy covering 60% of payables with current MTM gains of ₹2.8 crores. |
| Concentration Risk | Large strategic orders can create quarterly volatility in revenue and margin profiles, as seen in the Q3 AI spike. |
Q&A Highlights
AI Mission & GPU Demand
- Question: When will further orders from the ₹10k crore India AI Mission be placed? (Nishant Gupta)
- Answer: Two procurement types exist: GPU services through CSPs (started) and on-premise infrastructure (yet to start). Netweb is participating in the former and expects the latter to gain momentum as government spending accelerates (Sanjay Lodha/Hirday Vikram).
Margin Sustainability
- Question: Will margins remain in the 12% range for the next few quarters during strategic deal execution? (Vinay Menon)
- Answer: Strategic orders carry roughly 200 bps lower PBT margins. Excluding these, the core PAT margin remains near 9.9%–10%. The final mix will determine quarterly blended margins (Sanjeev Sancheti).
Business Model Clarification
- Question: What is the role of Netweb in the AI ecosystem versus chipmakers? (Shashank Jha)
- Answer: Netweb is an OEM/Manufacturer. It buys GPU chips (e.g., from NVIDIA), integrates them into indigenously designed motherboards and server stacks, and sells the complete high-end compute solution to customers who then capitalize it (Sanjay Lodha).
Competitor Technologies (ASICs)
- Question: Is there a risk from ASICs (Google TPU/Amazon Trainium) replacing NVIDIA GPUs? (Sandeep Shah)
- Answer: Netweb is technology-agnostic and not “married” to one provider. The company has access to roadmaps 18 months in advance and is capable of designing for any architecture that gains market adoption (Sanjay Lodha).
Key Takeaway
Netweb Technologies delivered a record-breaking Q3 FY26, with revenue surging 141% YoY to ₹804.9 crores, primarily driven by the accelerated execution of a ₹450.4 crore strategic AI compute order. While the large deal mix compressed EBITDA margins to 12.2%, the company’s 9M performance remains strong with a 92% YoY revenue growth and ROE of 30.5%. Strategically, the firm is transitioning from a high-end server provider to a pivotal player in India’s AI Mission, leveraging its R&D capability to handle latest-generation chipsets like NVIDIA’s Blackwell. Management maintains a positive outlook with a 30-40% organic CAGR guidance, supported by a total order book exceeding ₹2,200 crores and a zero net debt balance sheet. Looking ahead, the focus remains on executing one-third of the strategic order book by FY26 year-end while navigating global component shortages through proactive supply chain management.
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