Netweb Technologies India Ltd Q2 FY2026 Concall Summary

Source transcript PDF: https://assets.stockscans.in/docs/ia7ujhwoai03ovs2y1ga8gc1.pdf

Key Takeaways


The AI Inflection

Lodha: "They want to replicate the same thing, which basically -- which happened in the India became the software power of the world. They want to make India to become the AI factory of the world."

Strategic Orders: The ₹2,184 Crore Inflection

Singhal: "So Garvit, so look, these are very large orders, which are -- obviously, these are different from our regular business orders. However, we are keeping and maintaining very healthy and sustainable margins. They can be like 150 to 200 basis points lower at PBT level."

Business Model & Competitive Position

Lodha: "So basically, we are not box pushers actually. If you see our trajectory very clearly, you will see that basically, we build our systems. We have our own software stack and basically -- so basically, it's not primarily a system sale or a box sale."

The Lumpiness Debate

Lodha: "I contradict you, my order book -- basically, my business is not lumpy at all actually. You need to really see and observe my business for at least 3 to 4 years. And you will find that, it is not lumpy at all."

Margins & Balance Sheet


Guidance & Commitments

CommitmentSpecificsTimeline
Organic revenue growth35% to 40%Next couple of years
Strategic order execution~1/3 of ₹2,100 crore shippedFY26; balance in FY27
Operating margin (EBITDA)13% to 14%Sustained, including operational leverage
PAT margin10% to 10.5%Sustained
Strategic order PBT margin differential150-200 bps below regular businessApplies to current and future strategic orders
More strategic ordersOptimistic; will announce as deals become visibleNo specific timeline
Industry vertical breakup disclosureAnnual only; quarterly reporting discontinuedEffective immediately

Key Metrics

MetricQ2 FY26
Operating income₹303.7 cr, +21% YoY
Operating EBITDA₹45.46 cr, +25% YoY, margin 15%
PAT₹31.4 cr, +20.1% YoY, margin 10.3%
H1 FY26 operating income₹604.9 cr, +51.1% YoY
H1 FY26 operating EBITDA₹90.32 cr, +60.6% YoY, margin 14.9% vs 14.1% in H1 FY25
H1 FY26 PAT₹61.9 cr, +49.5% YoY, margin 10.2%
H1 FY26 return on equity22.4%
H1 FY26 return on capital employed30.2%
Organic order book₹493.9 cr as on September 30, 2025
Large strategic orders won~₹2,184 cr, to be executed by FY27; ~1/3 expected in FY26
AI segment revenue contribution25.4% of revenue in H1 FY26, up from 14.7% in H1 FY25, growth of 160%
Revenue growth guidance (organic)35% to 40% for regular business
EBITDA margin guidance13% to 14%
Cash conversion cycle120 days as on September 2025, +9 days QoQ; payable days 70, receivable days 117, inventory days 72
Net free cash₹237.98 cr as on September 2025, zero net debt company
Employee count~600, up from ~240 at IPO approximately 2.5 years ago
Organic funnel>₹4,000 cr, conversion ratio ~60%, conversion time 6–18 months
Exports~5% of total turnover (organic); overall percentage may be lower than 5% for next 2 financial years due to large domestic orders
Enterprise vs government revenue split~60% enterprise, ~40% government this quarter; typically ~50/50 annually