Thank you. We will now begin the question-and-answer session. The first question comes from the line of Deep Shah with 360 ONE Capital. Please go ahead.

Yes. Hi. Thanks for the opportunity and Sanjeev and Deepak, congrats on great set of numbers. A couple of bookkeeping questions first. If you could highlight the organic revenue growth given that 2S was there from 1st of May, that is one. Second, so I appreciate the comment that you made on -- in your opening remarks about cash flow improvement. Now you also explained in the past as to the accelerated investments that we have to make leading to a benign cash flow relative to EBITDA. So if you could give some more color as to maybe a ballpark figure where you expect this to be or the causes why you expect this to improve given the order backlog suggests that we will actually have to make a lot more investments this year? And is that assessment correct? So that's second. Third, if I look at our order backlog and say, for a moment, I exclude projects, which would be longer term in nature, I still see a 38% kind of increase in our order backlog, if I look at managed services, maintenance contracts and products, which is of c ourse very small. So my question here really is that do you think you are being slightly conservative when you guide on '27 numbers? Or is it that you're expecting a lot of growth to maybe start in 3Q and 4Q and which is why the numbers will flow in '28? These are my questions. Thank you.

Okay. So I will start taking one by one. So the organic revenue. So out of the total INR1,719 crores of revenue we have done for this year, the inorganic, which is that 2S has contributed around INR60 crores of revenue. So all the balance revenues are inorganic -- sorry, are all organic revenues. So INR60 crores came from the 2S Brazil acquisition because it was like two months and first quarter of them, which is basically the June quarter is normally weak for them because they are into a networking and the Cisco partners and all those things. So they contributed INR60 crores. On the cash flow side of it, so when -- so one is that I'm talking about the operating cash flow. When I'm saying operating cash flow is basically that there will be involvement in the working capital and all those stuff. But from an investment perspective, our investment in the talent, our investment in the people and all those things to secure this type of order book and to increase to

convert the pipeline into orders and to hiring, let's say, the best world-class people and all those things, that is largely done. We will continue to obviously hire more people and all those things. But right now, it looks like that from operation, our cash flow will be positive and then the cycle of the cash flow will automatically pick up with the growth what we are looking at in this year. On the, let's say, order backlog side of it, you are absolutely right , Deep, is that most of the growth is coming with all the execution of these projects by, let's say, end of the quarter 3 and quarter 4, and it will spill into the next year. So that will go -- let's say, the growth will spill into FY28 with the order backlog what we have because, see, a lot of execution is also dependent on the customer. We have received -- like, let's say, this order what we have announced, we have received that order from another hyperscaler. Now that order, we were talking -- we are talking since so many days. And the real -- the work on the ground, the hiring and all those things will start, but the work on the ground will start only from November onwards. So from -- and that -- and then again, it will scale up. So it is not like that, that you receive the order and you start working tomorrow because these are not smaller orders, smaller contracts . They are large sites. They are gigawatt plus sites. They are not like a smaller site. So, there is a lot of deployment and all those things which happens on that. So because of that, the growth will be -- growth when we will project about FY28, you will see that there will be a growth over the current year. So let's say, current year, if we grow between 22% to 25% or around, let's say, 25%, then the next year growth of FY28 will be over and above those numbers. And that is why it doesn't look like very, very conservative to us in terms of the numbers what we are projecting at between INR7,800 crores to INR8,000 crores.

Yes. This is very clear. So actually, you answered my follow-up question to the extent that you clearly suggested that the reason this year numbers aren't conservative is that some of the order backlog or rather a large part of order backlog would actually flow in FY'28. Is that assessment correct? I'm just asking for absolute clarity.

Correct. Correct. That is correct. And that is why -- that is why when you see our order backlog when we have given a guidance for order backlog, that is we are saying US$1.3 billion to US$1.4 billion, and that is why we will end up with an order backlog. I may say and probably Sanjeev will add more on that. The order backlog may be a little bit conservative because we will add more orders between, let's say, November, October to March when we will burn these orders what we are getting right now out of the 950. So probably that number may be higher, and then we will -- I think we will be having a full clarity after when we announce the quarter two results, and then we will see that how we can have more clarity and more speaking on that.

Yes, Deepak, very clear. Thank you so much and all the best.

The next question comes from the line of Vivek Choraria, an Individual Investor. Please go ahead.

Hi, Sanjeev and Deepak, nice to chat with you.

Hi, Vivek.

I just wanted to touch on the non -data center part of the business because most of the growth that we are talking is coming from that piece. Is the non -data center piece sort of just treading along? Or are you expecting growth? Or is it a case that we are classifying some orders as a data center? I just wanted some clarity on that.

I'll take that. So yes -- so clearly, the hyperscale cycle is larger at this time. The non-hyperscale enterprise will grow at modest double-digit 10% odd. Combining, we are putting at 25% odd at this time. The cycle for the enterprise, Vivek, will follow. The data center infrastructure is not being built to be consumed on its own. The impact of the data center infrastructure would come through a lag when the infrastructure will start to dramatically change downstream airport infrastructure, hospital infrast ructure, bank infrastructure. So, this is being made for them. This infrastructure is being made for what? It's being made for drive efficiency, experience for end users like you and me and our workplaces, right? So we're expecting -- we are beefing up, seeing large-scale projects also coming through in our infrastructure on the enterprise side. For example, when we do data center infrastructure for a bank, that's our bank business. That is not a hyperscale gigawatt. That's 10 megawatts, 20 megawatts. Still large. Many years ago, it was 2 megawatts. So it will have that. The entire network infrastructure to connect will change. A case in point, just to give you an example so that you'll understand, if the headend changes, if you were to see a 4K HD video, you need a device downstream that will support that. So if the headend changes, which is in this case, is a massive infrastruc ture for data center, the consumption actually, the inference is happening at the end user, passing through an airport, getting into a hospital, going to a consumer store, ordering food, it is coming, right? So, we are bullish on that as well, but it will come through a lag. So, a standard double -digit growth in that side, maybe 10%. We are focused on 300 customers, as Deepak called out. But we are catching the hyper cycle on the AI build -out. And we expect as we move forward that we will see our momentum on the enterprise also catch up with a lag.

Sanjeev, just a word on the TPS business. I mean, our growth -- I mean, our revenues have jumped up, but so have the EBIT losses. Is it a matter of scale after a point at which we will start delivering positive numbers?

So our product business also, we're expecting in the current year to be able to grow in the range of 20 -odd percent. It's a matter of scale. We have again narrowed down our focus on only

mission-critical infrastructure in that space. We are doing a lot of products. We inherited through historical. So, we are now focusing on visualization products, which we call KVM, our Emerald product. And we are seeing strong momentum. We will see through in the coming quarters, the spike in that as well. We're investing in next-generation AI-led products in that space. So yes, to that extent, I expect the growth this year catching up, ballpark around 20% range, still lagging our overall growth plans, but highly accretive. But as we move from there, every dollar that comes in as we move into next year and years beyond, we'll become accretive overall here.

Just one last question, Sanjeev. I mean, the growth that we are projecting in the Q2 -- I mean, the ask for the H2 will be almost like a 30% to 40% growth year -on-year and even quarter-on- quarter. Are we confident? Because we've been talking about some delays in execution. I mean, what gives us the confidence that Q3, Q4, we should start getting demand?

So, no delays -- So, no delays on execution from that perspective. Enough backlog coming at the opening of quarter one to push through -- to push us through if you calculate the order backlog plus the booking goal and the revenue projections, the math will work out. So, we're expecting to grow each quarter sequentially year-on-year going forward.

All right. Thank you, Sanjeev.

The next question comes from the line of Nandan Arekal with JM Financial Limited. Please go ahead.

Yes, hi team. Congrats on a great set of numbers. Hello, am I audible?

Yes.

Yes. Congrats team on a great set of numbers. So, my question is on margins. We expect to end the year at 10% EBITDA margin, and I think we have given a guidance of 9.3% to 9.4%. So, does that mean maybe Q2, Q3, we'll see slightly depressed margins and then we expect the operating leverage to kick in? And also just a thought on what will be the gross margins you're building in for the data center orders?

So, I'll take that. So, I think -- yes, so I think our goal remains 10% and over. That's what Deepak called out. So as we look at the overall year, we expect our -- as we move forward, our Q4 to be in that range or more. But we also continuously are lookin g at as we scale this business up in the current year with the order backlog. We are looking to invest in talent and training. We are getting into a very large-scale, build-out of multi -billion dollar backlogs. This project execution also requires some investments in training. So, we are being cautious on that. But having said that, at-scale, we expect that we should be able to deliver at 10% or more.

But I think it's better to factor in what we are planning to invest and therefore, guiding where Deepak had guided at about 9.3%, 9.4% (inadvertently stated - 9.4% to 9.5%: to be ignored) at this time. But I think we remain focused on that to get to 10% at-scale, more than 10%.

Got it. That was clear. Okay. On the order backlog, right, so currently, I think the blended average where you have indicated at around 18 months, so based on your -- the pipeline and what will get executed and what you see coming in, in the next few quart ers, so what do you expect like the average tenure would be by the end of this year?

So the tenure for large -scale projects, Deepak, alluded about 24 -36 months. I had told earlier the goal for this year for order booking, and that's showing in our current forecast as well and guidance is 50% more than the last year ballpark in the range of $1. 3 billion, $1. 4 billion (inadvertently stated - US$1.4 billion to US$1.5 billion: to be ignored). So, that's what we are planning to book, and we are well on our track to do that or exceed that at this time, right? To earlier point that Deepak said, some of these orders require preplanning from when they start to burn into revenues. So yes, we will end up the year after you do the calculation of where we opened up and book and take about INR8,000 crores, we'll open up a very, very healthy backlog that will possibly cover the growth for next year pretty much from the backlog itself. It will be very, very evident, right? So yes, from a data center margin perspective, I think it remains accretive for us at this time . As I said, I think we continue to focus on our operating margin for 10%. At-scale, we believe it will be equally accretive, if not better.

Well, congrats and all the best.

The next question comes from the line of Mohammed Nameer with Eiko Quantum Solutions. Please go ahead,

Yes. Hi. Thank you for the opportunity. I have just one bookkeeping question about the tax rate. Our tax rate is currently low. And going forward, what will be the tax rate?

So, tax rate currently is lower primarily because of our past operating losses, carryforward operating losses we have in the various geographies. So, tax rate is dependent on the revenue mix on the different geographies and the consumption of the past oper ating losses in terms of how we consume them. So at least for next, let's say, next -- for FY27 and FY28, I'm expecting it to be in the range between 10% to 15% and after that, it should regularize to around 20% type of levels.

Okay. And one more question about the other income part. The other income is negative. Why is it so?

Sorry, what is negative?

No, it doesn't look negative to me. Wait. Let me look at it. I didn't saw a negative number on the other income. Other income is INR4 crores positive. I don't know where you reading this one.

Okay. Thank you.

Yes.

The next question comes from the line of Vivek Seth, an Individual Investor. Please go ahead.

Hi. Thank you for the opportunity. My query is that yesterday, you received the order from a hyperscaler, AI data center order. So, just wanted to know how much of the order is your integrated products? And how much of the part is the service part?

No products, 100% services.

100%. Okay. Thank you so much.

The next question comes from the line of Keshav Bharadia with Wallfort Financial. Please go ahead,

Hi sir. Congratulations on a great set of numbers and thank you for the opportunity. Sir, just one question from my side, since a lot of our growth plans hinge on the hyperscaler and data center segment, by any chance that there is some moderation at the h yperscalers' end in terms of data center capex, does that put us at a risk of order cancellations? Or do our growth plans change in that scenario?

Good question. So, I think the overall scale of spend is gigantic. I think the overall spend for the AI infrastructure over the next four years is about US$1.6 trillion, an average US$400 billion. And each time some of the hyperscalers comes out and announce the results, they add up the capital expenditure. So, I think we have taken over a very fairly small slice at this time of that from our -- within our addressable market in that, that we have, right? So, we don't see in our current conversation, the current pipeline. On the contrary, we are seeing speed with respect to new projects getting announced at this time. So, can something dramatically change? No, I wouldn't be, wanting to predict that, but from our current conversation across multiple hyperscale, colocation customers within a hyperscale, the multiple sites. Within the hyperscale multiple geos, we are seeing what's happening in India. The advantage, of course, for Black Box remains that we are present with customers not only in one market, but other markets. We have not started to even harness the markets in India, which we are planning to do. So, I don't see from our perspective, our growth getting hampered. Should there be a shift of a hyper A or hyper B or some site getting delayed or some site getting reva mped, I think we're talking about a massive spend.

And to that extent, I think our goals are well set from that perspective. And as I told earlier, we expect also this hyperscale to start to fire downstream enterprise spend because everything around that place will change, be it the network, be it connectivity and so on and so forth. So, we'll possibly get into a cycle of a dual engine start ing fiscal '28 and beyond. So, this is a structural shift cycle. It is not a technology spend, just a buying compute. This is how the economies will operate. This is about keeping economies ahead. So overall, when we calculate that and where we want to play and what is our goal of going forward of being at US$2 billion, I think we are well placed and we are well on track.

Great, sir. And just a follow-up to that. So, we see a lot of capex happening in India as well with the tax holiday and many global hyperscalers also coming here. So, have we explored any opportunities here? And as well as, is there an opportunity maybe on the semiconductor side because you see a lot of capex happening here in Southeast Asia as well. So is that potentially a segment we could tap into in the coming years?

Yes. That's a good question again. So yes, we keep on evaluating the markets and the spend. Of course, India will go through a hyper investment cycle. We are seeing that as well. But even if you look at the current build -out, U.S. is currently at 67 around that gigawatt of already being commissioned and used, going to 233 gigawatt. India is going from 1 to 5 to 6 at this time. So naturally, from a spend perspective, 70%, 80% is around in the U.S. So, we'll continue to remain focused in the U.S. to scale. We have built a team around those capabilities. But we continue to look at markets, and that's the advantage for Black Box. So as that starts to mature, we are into Europe at this time in conversation. We are looking at India's potential as well, clearly interested as much to see where it can add value and be accretive for us from a shareholder perspective. The opportunity, of course, has no meaning until you can create profitable opportunity from that perspective. So, we are clearly glued in reformatting o urselves to see what we can do in India and the Asia market and so on and so forth. Coming on the semiconductor side, now we are looking at not being a semiconductor or manufacturer or builder from a perspective of being a partner on the compute side. From a perspective of the overall stack for technology, we have connectivity , network; compute and storage is a natural extension for us. We continue to do that for enterprise customers. Hyperscalers are a little different. So yes, there is an opportunity. As a management team, we continue to evaluate the adjacencies. It is adjacent to us. It can open up additional addressable spend or TAM for us. So, we are evaluating that. But currently focused on where we see hyper growth and where we are engaged at this time. But clearly, from a strategy standpoint, we look at adjacencies and the overall quantum of what we can do. So, we'll evaluate that as well.

Great, sir. And just one last question, if I can put in. So, sir, what would be potentially a distinctive moat between us and our competitors when it comes to bidding for new orders? And I mean, what is our right to win against the others? And is there a potential risk from IT

companies to also provide such a service? I just wanted to understand. I know definitely that we have that customer mix since a long time. But what differentiates us from the other? And how is the competitive intensity in this kind of industry?

Yes. So, I think I'll answer it in 2, 3 parts. One, of course, you can grow in -- from a growth perspective, there are 3 distinctive ways to grow in. One, of course, participating in growth. So, you just ride the bus because there's a growth happening. So, see whether you can be at that growth level. Second, of course, you take share because you have to compete and there's only 10% growth and you want to grow at 25%, so you have to take somebody else's share. That's the only way to grow. The third, of course, you can acquire, right? So if you look from -- keeping the acquisition separate, that's a separate goal. I think first, let's look at what we can do to participate in growth, right? So, when we talk about US$400 billion worth of spend on that, 10% of that possibly is addressable from that perspective. That's about US$40 billion, and we're trying to do about, say, US$1 billion just for argument's sake. I think the idea is to be getting considered and have the wherewithal to be able to be considered and bid, right? These are not our competing bids that you can quote 5% less and win. That's not how hyperscalers operate. By that logic, anybody can quote 10% and want to win that. You have to win because you have capability, ability to spend, stay put, train and so on and so forth, right? Those are what we have built over the last several years' time and therefore, being considered. As we move forward, we believe that our push rate will be reducing and we'll have pull rates. So, we are now getting invited more than we saw before because we executed several hundred megawatts, close to a gigawatt by now, right, to do that. So, I think ability to execute at scale, ability to expand and train, these are the essential factors. This market did not exist 3, 4, 5 years ago. So therefore, execution at scale for anybody doesn't exist, right? It was largely operated by small mid-market players locally, which is the fiber world. So, I think from that perspective, the number of players who can operate at scale are limited. The number of people who -- customer -- companies who can operate at scale and globally are even more limited. And from a perspective of where we are, we talked about possibly the only Indian company who has the ability to now do this at scale, right? So, I think moat is what? Moat is scale. Moat is capability. Moat is the relationship and execution already done. But more importantly, participating in that. Now, coming to take share, I think from that perspective, will there be some competition? Of course, you can't be the only one playing. That's not going to happen. But I think we believe our right to win as we move forward and continue to -- it is evident from our order books. It will even become more evident as we go forward. So, a combination of what we have an opportunity, ability to scale, as I told in my earnings call, only opportuni ty doesn't mean much. We believe we have built a very robust execution capability. So it's pretty simple. If you look at construction in general and if you look at the Indian market and if you're starting to build a very large construction or a bridge or a dam, only few people are invited to do that,

right? And there are possibly 2,000 construction companies in India. Only because you know construction, you won't be constructing a dam. So, that's pretty much how it works here, right? So, we believe at our scale, ability to execute, our relationship over the last 2, 3 years, our training, I think we are well placed to participate and win this massive once -in-a-lifetime infrastructure cycle. It is like the railroad of 1930s, right? So, we ought to be there and put our heads down and just make sure that we are able to execute better, and we are doing it.

Perfect, sir. That's helpful. Congratulations again, and all the best for the future.

Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for the closing remarks.

Thank you, everyone. If you have any further questions, you can reach our Investor Relations Head, Purvesh Parekh or SGA, our Investor Relations Advisors. Thank you so much.

Thank you, sir.

Thank you.

Thank you. Ladies and gentlemen, on behalf of Black Box Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.