Netweb Technologies Q2 FY27 Earnings Call: Revenue, PAT Grow ~4x YoY, Order Book At Rs. 2,629 Cr

Netweb Technologies India Ltd held its Q2 FY27 earnings call on October 24, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Record Quarter: Revenue and PAT Both ~4x YoY

• Revenue of Rs.1,323 crore — highest-ever quarterly revenue, up 335.7% YoY and 61.4% QoQ in Q2 FY 2026-2027; operating EBITDA of Rs.197 crore (+334% YoY, +63.7% QoQ) at a 14.9% margin.
• PAT of Rs.137 crore — up 348.8% YoY (10.2% margin); CFO stated revenue and PAT both grew ~4x YoY in Q2 FY 2026-2027.
• H1 FY 2026-2027 PAT of Rs.222 crore — already surpassed full-year FY 2025-2026 PAT of Rs.206 crore within six months; H1 revenue reached Rs.2,143 crore (+254.8% YoY).
• ROE of 31.4% and ROCE of 38.6% — in Q2 FY 2026-2027, reflecting the impact of QIP proceeds on the capital base.
• Zero net debt achieved — net cash of Rs.14 crore as of September 2026; Rs.767 crore of QIP proceeds utilized, with ~Rs.403 crore unutilized.
• Operating leverage questioned — an analyst noted H1 revenue up ~2.5x YoY with PAT/operating margins flat in percentage terms; management reaffirmed its commitment to maintain EBITDA and PAT margins despite scale of growth.

Rs.2,629 Cr Order Book, Rs.11,152 Cr Pipeline, ~60% Strike Rate

• Order book of Rs.2,629 crore — as of September 30, 2026, up from ~Rs.2,400-2,500 crore in Q1 FY 2026-2027 despite Rs.1,300+ crore of Q2 billing; plus an L1 position of Rs.653 crore (management estimated ~Rs.3,100-3,200 crore including L1).
• Active pipeline of ~Rs.11,152 crore — value of business opportunities under pursuit as of Q2 FY 2026-2027; management pegged conversion ratio/strike rate at ~60%, but noted conversion happens gradually and the full FY 2027-2028 order book cannot be confirmed upfront.
• Rs.1,200 crore raised in Q2 FY 2026-2027 — first capital raise since listing in July 2023; management cited strong investor response.
• 449 new customers added in H1 FY 2026-2027 — new customers account for 8-9% of the revenue book; a pool of 25-30 customers keeps rotating into the top 5/top 10 slots, so management says the business is not actually concentrated medium-term.
• SBI and IDFC First Bank appear as customers for the first time — in the Q2 FY 2026-2027 presentation; CMD Sanjay Lodha affirmed BFSI could emerge as a significant growth driver, citing data sovereignty and localization trends, without quantification.
• AI-led order sizes range Rs.5 crore to Rs.1,000 crore — in the current FY 2026-2027 demand environment, with demand buoyant from both government and private/enterprise bodies and a major thrust from private bodies ("no more primarily a government play").
• Yotta, E2E and CDAC confirmed as customers — CMD Lodha said all named parties are "very much in the order book" and in the funnel, though customer-specific order quantities are not disclosed.

AI Systems at 58.4% of Revenue; Taiwan R&D Sub and Vera Rubin Roadmap

• AI systems revenue of Rs.773 crore — 58.4% of Q2 FY 2026-2027 revenue (YoY growth stated as 1,068%, with 68.1% also cited); HPC at Rs.248 crore and private cloud at Rs.245 crore.
• 100% fully owned Taiwan subsidiary — for R&D only, to hire locally available design engineers and be near technology providers whose main R&D centers are in Taiwan; management explicitly does not intend to become an ODM or a "box pusher."
• Vera Rubin commercial offering planned by January 2027 (Q4 FY 2026-2027) — design work has started, first system to be set up at Netweb's India facility soon; launch timing intended to match worldwide rollout; management did not explicitly confirm whether Vera Rubin is already in the order book.
• Current product roadmap expected to serve for at least the next 2-3 years — from Q2 FY 2026-2027, per CSMO Hridaya Vikram on Chinese memory chip traction (CXMT/YMTC); architectural changes toward these technologies "are not moving swiftly."
• Multi-model architectures don't require server changes — Netweb achieves better token economics through full-stack solution design (compute, interconnect, storage, cloud stack) aligned with NVIDIA chip reference architectures.
• Physical AI and quantum in initial development stage — exploratory R&D investment (quantum simulators/emulators, digital twins); management declined to give specifics, monetization timeline or opportunity sizing (period unspecified).

NSM 2.0 and CDAC/India AI Empanelment as Structural Tailwinds

• Targeting more than 50% of the NSM 2.0 outlay — management noted it is a five-year program, so the outlay will phase in gradually rather than come in one go (period unspecified); NSM 2.0 gives weightage to Indianization and local manufacturing.
• NSM 2.0-related orders could start coming in from early 2027 — management concurred with the analyst's suggestion on the Q2 FY 2026-2027 call.
• CDAC has rolled out a request for empanelment on behalf of India AI — to empanel CSPs who will ultimately offer the targeted GPU count; Hridaya Vikram said demand is "definitely not going to stop at 10,000" GPUs (period unspecified).
• India AI issuing a fresh RFP at prevailing market rates — per Hridaya Vikram, GPUs under the earlier India AI RFP were utilized but international per-hour GPU rates have risen; CSPs have the option of placing orders on Netweb, which will deliver as orders are placed — this is not CDAC deploying the clusters itself.
• Netweb already in touch with the CSPs — many already served by the company, plus certain new players in the empanelment; management said this is definitely going to result in more pipeline addition.
• India AI Mission cited as a major structural tailwind — management cited government bodies, public institutions and large enterprises increasingly treating computing infrastructure as strategic, prioritizing in-country data/workloads and AI token economics.

EBITDA Discipline Intact; Inventory Build Intentional

• EBITDA margin guidance of 13-14% for FY 2026-2027 — slightly exceeded in H1 FY 2026-2027, but management cautioned this should not be quoted/extrapolated for the full year; operating EBITDA margins expected to remain around 14% (period unspecified).
• Gross margin decline is a deal-mix function — CMD Lodha said gross margin is difficult to monitor quarter-on-quarter and should be assessed on a full-year basis; management guides on EBITDA instead, and very large deals create operating leverage as overheads don't grow proportionally.
• Cash conversion cycle at 94 days in Q2 FY 2026-2027 — receivable days improved to 62, inventory days at 117; CFO anticipates the CCC will operate in a 90-110 day range going forward (period unspecified), vs FY 2025-2026 at 84 days.
• Rs.1,900 crore inventory is intentional — built solely to support the order book and secure execution given supply chain, demand and lead times that have gone up; CFO said there will "definitely" be churning but did not explicitly confirm execution within Q3-Q4 FY 2026-2027.
• Employee costs up over trailing 5-6 quarters on three drivers — per CFO Ankit Kumar Singhal: annual increments flowing into Q2 FY 2026-2027 costs, variable pay/incentive provisioning scaling with quarterly growth, and higher headcount (up 120+ employees YoY vs Q2 FY 2025-2026).
• Negligible ESOP cost currently — the pre-IPO ESOP tranche vested fully in FY 2025-2026; ESOP cost will hit employee benefit expenses whenever new ESOP schemes are distributed (timing unspecified).
• ~Rs.350 crore free cash vs higher BSE balance sheet figure — CFO attributed the gap mainly to Rs.400 crore of unutilized QIP proceeds (not countable as free cash), longer-tenor FDs/bank deposits, and certain bank guarantees and deposits.

Rs.4,000 Cr FY27 Target Reaffirmed; 30-40% CAGR Stance Unchanged

• Rs.4,000 crore revenue target for FY 2026-2027 — CMD Sanjay Lodha reaffirmed the target on the call, versus the ~Rs.400 crore base at the time of IPO (~10x).
• 30-40% CAGR guidance sustained for at least the next 2-3 years — from FY 2027-2028 onwards, citing robust AI demand and Netweb's technology innovation in the Indian AI ecosystem; when pressed on whether 50-60% growth was achievable from pipeline conversion, Lodha declined to revise: "I cannot give a guidance on a guidance. My guidance stands where it is."
• 2H FY 2026-2027 shape not quantified — with the bulk of the strategic order of around 22 billion executed, Lodha declined to give a half-on-half split, saying the order book itself gives an indication and leaving the calculation to analysts.
• Standard execution timeline of 10-16 weeks — for any order generally, per Lodha, not specific to the current order book.
• No fundamental AI demand concerns, per management — Lodha said rising scrutiny reflects "investor related concerns," not sector fundamentals; memory prices have risen 200%+ (as of Q2 FY 2026-2027) without dampening demand, and his personal view is rising cost of capital will not deter demand.
• AI "has just started" — per Hridaya Vikram, with token consumption going up and significant headroom; Lodha framed depth as 25+ years in super computing, 10+ years in private cloud and 15+ years in AI. On potential competition in India in its space, management said it has "no idea" — no competitive landscape visibility was offered.