Netweb Technologies India Limited, a leading provider of high-performance computing solutions, has reported robust financial results for the first quarter, showcasing significant growth across key metrics.

Strong Financial Performance

The company's revenue from operations surged by 102% year-on-year to Rs. 3,012.00 million in Q1. This impressive growth was accompanied by a substantial increase in profitability, with operating EBITDA rising by 127% year-on-year to Rs. 448.00 million. The EBITDA margin for the quarter stood at 14.9%. Profit after tax (PAT) also saw a remarkable 100% year-on-year growth, reaching Rs. 305.00 million, with a PAT margin of 10.1%.

AI Systems Drive Growth

A key highlight of the quarter was the exceptional performance of Netweb's AI systems segment. This division contributed 29% of the operating revenue and experienced a 300% year-on-year growth. The company successfully executed a large AI order in the defense sector, underlining its capabilities in critical national initiatives.

Segment-wise Performance

Netweb operates across three main segments:

1. High-Performance Computing (HPC)
2. Private Cloud and Hyper-Converged Infrastructure (HCI)
3. AI Systems

While all segments showed growth, AI systems emerged as the star performer. The company's management has revised its guidance for AI's contribution to total revenue, expecting it to reach around 22% by the end of the fiscal year, up from the previous estimate of 20%.

Order Book and Pipeline

As of the end of Q1, Netweb's order book stands at Rs. 230.00 crore, with additional L1 (lowest bidder) orders of Rs. 460.00 crore, totaling approximately Rs. 700.00 crore. The company's pipeline is robust, valued at around Rs. 4,000.00 crore, with an expected conversion ratio of 60%.

Client Mix and Sector Contribution

For the quarter, government orders contributed 60% of the total revenue, while enterprise clients accounted for 40%. The space and defense sector saw significant growth, with its contribution rising to Rs. 83.40 crore, marking a 283% year-on-year increase.

Launch of Skylus.ai

During the quarter, Netweb introduced Skylus.ai, a unified composable GPU orchestration platform designed to facilitate rapid deployment and optimization of AI infrastructure. This launch aligns with India's vision of becoming a global AI powerhouse.

Management Commentary

Sanjay Lodha, Chairman and Managing Director of Netweb Technologies, commented on the results: "We are pleased to report yet another strong quarter, continuing our growth momentum. The results reflect the strength of our business model, disciplined execution, and robust demand across our core segments."

Outlook

Netweb Technologies maintains its revenue growth guidance of 35-40% for the fiscal year. The company expects to sustain its EBITDA margins around 14% with PAT margins between 10-10.5%. With a strong order book, expanding product portfolio, and continued investments in capability building, Netweb remains confident in its growth trajectory.

The company's focus on high-growth areas such as AI, coupled with its strong presence in government and enterprise sectors, positions it well to capitalize on the increasing demand for advanced computing solutions in India's rapidly evolving technology landscape.

Netweb Technologies has reported a significant boost in its Artificial Intelligence (AI) business during Q1, marking a substantial growth trajectory for the company. The tech firm's AI revenue saw a remarkable 300% year-over-year increase, now accounting for 29% of the total operating revenue.

AI Business Expansion

The company's AI segment has shown impressive performance, with a successful execution of a large AI order in the defense sector. This achievement has led the management to revise its AI segment contribution guidance upwards from 20% to 22% of the total business.

Client Diversification

For the first quarter, Netweb Technologies' AI systems revenue demonstrated a balanced mix of government and enterprise clients:

Revenue Outlook

Netweb Technologies maintains an optimistic stance on its overall growth trajectory:

• Revenue Growth Guidance: The company reaffirms its revenue growth guidance of 35-40%
• Export Revenue: Expected to be 5-6% for the current year, with projections to reach around 10% within 2-3 years

Financial Performance Expectations

The company has provided insights into its anticipated financial performance:

• EBITDA Margin Guidance: Maintained at around 14%
• PAT Margin Guidance: Projected to be between 10-10.5%

This strong performance in the AI segment, coupled with a positive outlook for overall revenue growth and export expansion, positions Netweb Technologies as a notable player in the tech industry. The company's success in securing defense sector contracts and its growing enterprise customer base underscore its potential for sustained growth in the AI market.