Netweb Technologies India Ltd Q4 FY2024 Concall Summary

Source transcript PDF: https://assets.stockscans.in/docs/qy9alm1gt7j7w24ahea02x4k.pdf

Key Takeaways


AI Systems: The Third Pillar

Sanjay Lodha: "India became the software factory of the world. And the India, basically, I the kind of work load and kind of things which are happening that definitely offers the country the same kind of situation."

Order Book & Demand Visibility

Sanjay Lodha: "We want to target the refresh revenue. We want to go and tell them, sir, whatever you had bought has now become obsolete and you can really look at some time."

Nvidia Partnership & Manufacturing

Sanjay Lodha: "I think I have some kind of restrictions on disclosing what exactly we are trying to do there at this point of time."

Competitive Position & Business Model

Sanjay Lodha: "My key USP, will remain the same. One is the maintaining the niche and the other is that that basically end-to-end. We don't want to become a pure hardware company."

Margins, Cash Flow & Capacity

Sanjay Lodha: "Maybe, I don't think there is a huge scope actually there because we don't we don't want to really overcharge our customers. We will basically be maybe some few basis points up. It can happen But, the guidance will be at the same margin levels, approximately 50 basis points going down. Might be there, not more than that."

Product Pipeline & Adjacencies


Guidance & Commitments

CommitmentSpecificsTimeline
Revenue CAGR30-35% top-line growthAt least 4-5 years
Margin bandCurrent margin levels, ~50 bps downside possible, not moreOngoing
AI revenue share15-16% of total revenueNext year (FY25)
AI revenue share~30% of total revenueWithin 5 years
EBITDA margin improvementMeaningful improvementTwo years down the line
Networking switches rampConfident of ramping salesCurrent year (FY25)
ORAN solution readinessProduct readyQ3/Q4 this year
Cash conversion33-35% cash from operationsSteady state
Order book execution~₹411 cr executed4-5 months (16-20 week cycle)
L1 pipeline conversion₹300+ cr converting to order book2 weeks to 3 months
CapEx sufficiencyCurrent CapEx supports ₹1,800-2,000 cr revenue; no major CapEx plannedNext 2-3 years

Key Metrics

MetricQ4 FY24 / FY24
Operating income (Q4 FY24)₹265.9 cr, +115.5% YoY
Operating income (FY24)₹724.1 cr, +62.7% YoY
Operating EBITDA (Q4 FY24)₹40.4 cr, +166.5% YoY
Operating EBITDA (FY24)₹102.5 cr, +46.4% YoY
Operating EBITDA margin (Q4 FY24)15.2%
Operating EBITDA margin (FY24)14.2%
PAT (Q4 FY24)₹29.7 cr, +181.8% YoY
PAT (FY24)₹75.9 cr, +61.7% YoY
PAT margin (Q4 FY24)11.0%, improved from 8.4% in Q4 FY23
Revenue growth guidance30–35% CAGR, sustainable over 4–5 years
Order book₹411.2 cr as of Mar'24, vs ₹71.2 cr in Mar'23
L1 orders awaiting PO>₹300 cr, conversion expected in weeks to 3 months
AI systems revenue growth2.6x YoY, contribution to total revenue rose from 7% in FY23 to 11% in FY24
New customers onboarded171 in FY24
Return on Equity (FY24)29.4%
Return on Capital Employed (FY24)38.5%
Net Debt (FY24)₹(101.7) cr, improved from ₹28.5 cr in FY23, excludes un-utilised IPO proceeds
Cash Conversion Cycle (FY24)69 days
Dividend per share₹2, 100% of face value, first dividend post listing, pay-out ratio 14.9%