Black Box Limited (BBOX) Q3 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Q3 and 9 months FY26 Earnings Conference Call of Black Box Ltd. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinion, and expectations of the company as on the date of this call. These statements are not the guarantee of future performance and involve risk and authorities that are difficult to predict. As a reminder, all participants' lines will be in listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded. I now hand over the call to Mr. Sanjeev Burma, whole-time director and CEO of Blackbox Ltd. Thank you, and over to you, sir.

Good morning, everyone, and thank you for joining us. On behalf of Blackboard Limited, I extend a warm welcome to our Q3 and nine-month FY26 earnings call. I'll begin by sharing an overview of our business performance, after which our CFO, Mr. Deepak Bansan, will take you through the financial highlights. Starting with our Q3 performance, we are pleased to report. Revenues of 1,660 crore for Q3 FY26, representing growth of 11% year-on-year and 5% quarter-on-quarter. For nine months FY26, our revenue stood at Rs. 4,631 crore, reflecting a growth of 5% value-wise. The growth was primarily driven by higher-order execution during nine months FY26, compared to the corresponding period last year. From a forward-looking perspective, the business momentum continues to remain encouraging, and this confidence is driven by a healthy and expanding order book, improving pipeline visibility, which together positions us well for sustained growth in the coming quarters. For nine months FY26, the company booked orders worth $626 million. The company continues to maintain strong order momentum and remains confident of achieving its FY26 order booking guidance of approximately $1 billion, thereby entering FY27 with a strong traction. Supported by sustained order wins, the order backlog is now expected to exceed our earlier estimate and reach around $800 million by the end of March 2026, which is approximately $100 million higher than the earlier estimate backlog of $700 million. Reflecting a growth, This increase reflects continued customer demand, validation of our investment in go-to-market talent, providing strong revenue visibility for the upcoming period. The incremental $100 million addition to the 526 closing order backlog is expected to be driven by two key factors. Approximately $40 million to $45 million relates to revenue that was initially expected to be recognized in FY26, but has shifted due to temporary customer-level delays and supply chain constraints. As this challenge is gradually normalized and execution progresses, this revenue is expected to flow in FY27. The remaining $55-60 million is expected to be driven by incremental order within Q4. Supported by improving traction across key verticals and strengthening customer pipeline.

The project order book witnessed a role.

Ladies and gentlemen, the line for the management has gone disconnected. Please stay connected. Meanwhile, I connect the line. Ladies and gentlemen, the line for the management has been reconnected. Thank you for your patience. Sanjeev sir, please proceed.

Thanks, Sanjit.

The project order book witnessed a robust growth reflecting an upside of $37 million at $195 million in Q3 FY26 compared to $158 million in Q2 FY26. The performance is driven by the company's continued focus on securing large, high-value contracts, particularly in data center segment, which remains the key goal driver. From the quarter gone by, we have seen an extended project execution timeline due to industry-wide shortage of fibers and related accessories. While investments in data center segment have begun to show encouraging traction and order inflow momentum remains strong, revenue realization from these projects has shifted to subsequent periods due to supply chain and infrastructure-related constraints. The data center ecosystem is currently witnessing heightened industry gravity, which has resulted in shortages across several critical inputs, including optical fibers, cables, GPUs, racks, etc., power infrastructure, and funding access. This is not only impacting the data center industry, but the entire digital infrastructure industry where these materials are used. These constraints have delayed project commencements as well as exhibition timelines. Such strong demand and hyperactivity in the industry has led to temporary supply chain challenges, leading to extended exhibition timelines. However, it is temporary in nature, and once the supply chain condition normalizes, the backlog which is currently extended due to this will be executed and flow into revenues. Owing to such delays in execution timeline, our orders which are supposed to be executed in this quarter has flown to subsequent quarters. Therefore, we have revised revenue guidance from the expected range of INR 6,750 to 7,000 crores. To now, INR 6,325 to INR 6,375 crores. The division revenue reflects EBITDA of INR 555 to 575 crores and a pack of 220 to 230 crores in FY26. During the quarter, the company secured notable order wins including multiple large data center orders. The company also secured multiple orders from the U.S. public sector. Further strengthening its presence in institutional infrastructure projects. Additionally, the company won a significant order from a leading Indian internet company and secured a large order from a prominent bank in Australia. This order highlights company's expanding global footprint, deep client trust, and growing momentum across priority markets. Overall, the near-term revenue realization has been impacted by industry-wide supply and execution constraints. A strong order book and deal wins, healthy pipeline, and sustained demand environment reinforces our confidence in growth through FY27 and beyond.

Ladies and gentlemen, the line for the management has been disconnected. Please stay connected. Meanwhile, we connect the management. Thank you. Ladies and gentlemen, we have connected the management to the conference call. Thank you for your patience.

I apologize for this bit again. On the strategic front, we are pleased to announce that Blackbox has signed a definitive agreement to acquire 2S, Universis Technologica, a leading resilient IT infrastructure and cybersecurity integrator, and a Cisco partner subject to certain concerns and approvals. With over 30 years of experience, 2S serves 650-odd customers across enterprise networking, Cloud, cybersecurity, and managed services backed by Advanced Networking and Data Center and Collaborative Technology Certifications. The access is K's black box presence in Brazil, largest growing market in Latin America, and is expected to add, I know, 500 crores of revenues in FY27. The transaction is expected to close by end of current fiscal year. This aligns with our strategy to grow the business to $2 billion for fiscal 29. With that, I would now like to hand over the call to our CFO, Mr. Deacon Gunson, who will take you to the financial performance.

Thank you, Sanjeev, for the detailed business overview, and good morning, everyone. I will now take you through our financial performance for quarter three and the first nine months of FY26. Starting with revenue performance, revenue for quarter three FY26 stood at INR 1660 crores, registering growth of 11% year-on-year and 5% quarter-on-quarter. For the first nine months of FY26, total revenue stood at INR 4631 crore, which is a growth of 5% year-on-year. Looking forward, growing order book, enhanced pipeline visibility, strengthened execution momentum, and regional expansion are expected to drive sustained growth in the quarters ahead. Moving to profitability, EBITDA for Q3, FY26, stood at INR 147 crore, representing growth of 10% year-on-year and 3% quarter-on-quarter. EBITDA margins remained stable at 8.9% during the quarter, despite higher employee-related costs on account of investment in go-to-market talent. Better fixed cost absorption and a balanced business mix help sustaining the margins. For the first nine months of FYI continue...

Ladies and gentlemen, the line for Deepak, sir, has been disconnected. Please stay connected. Meanwhile, I connected. Ladies and gentlemen, the line for the management is being reconnected. Deepak, sir, please proceed. Thank you.

Yeah, apologies for this. For the first nine months of FI26, EBITDA stood at INR 406 crores, reflecting year-on-year growth of 6% with margins at 8.8%. Looking ahead, we will continue focus on disciplined cost management, pricing discipline, and continuously optimizing our product mix. With ongoing operational efficiency and cost optimization initiatives, there remains further potential for incremental margin expansion as strategic priorities continue to execute in the quarters ahead. Profit after tax for quarter three FY26 stood at INR 50 crores, while PACT for nine months stood at 153 crores. Pat during the pre-period was primarily impacted by a one-time exceptional charge of approximately INR 6 crore relating to changes in employee benefit provisions arising from the implementation of the new labor code. Excluding this impact, underlying profitability trends remain stable. As revenue growth accelerates, that expansion is expected to outpace top-line growth, driven by a margin normalization, improved revenue quality, and greater contribution from high-value opportunities. As highlighted by Sanjeev earlier, the company continued to witness strong order momentum during Q3 with order bookings of 232 million. The total order backlog stands at 601 million as of December 2025. Based on the current order flow trajectory, we expect to significantly exceed our earlier backlog target of 700 million and cross 800 million by end of March 2026. Supported by this strong momentum, we remain well positioned to deliver our full year FY26 order booking target of $1 billion. To conclude, strong order points, an expanding backlog, proven execution capabilities, deepening client relationships, and a healthy pipeline continue to reinforce our growth outlook. As temporary customer-level delays normalize and project execution progresses, the revenue is expected to flow into FY27, strengthening our confidence in delivering an even stronger performance in the coming year. The proposed acquisition of 2S in Brazil represents disciplined and strategically aligned capital allocation that enhances both our growth and profitability profile. We are expecting to add around 500 crores of revenue in FY27 and expect to complete integration and synergy within 90 days of closing. This acquisition strengthens our long-term shareholder value while our balance sheet remains well positioned to support disciplined organic and inorganic growth. With that, we would now like to open the floor for questions.

Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch phone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of C.A. Garvit Goyal from Scream. Alfa, please proceed.

Hi, am I audible?

Yes, you are audible. Please proceed.

Good morning, sir. First question is on the order book. We are having around 5,400 CR order book as of today, and we are guiding for INR 7200 CR order book as on F826N. This is a huge gap, sir, because a part of this order book, which we are having right now, will get executed in Q4 also. So, what is giving you the confidence of getting these big orders, sir, because almost one and a half months are already gone, and you have not made any order receipt filing as well. So, is it like we are adding the order book of newly acquired company in our projection?

Okay, so I think Sanjeev, it looks like Sanjeev is not audible, but I think this was it. Okay, so I'll just answer that. So, first of all, no, we are not taking the other book from newly acquired company, point number one. This call is now being recorded.

Am I audible? Can you repeat, sir? Can you repeat? I think I missed it.

Okay, I'll just repeat that. I said first answer to the first question is, are we taking the order book for newly acquired business? The answer is no. The second is we report order book backlogs, booking and backlogs only at the end of the quarter. So you have a current backlog. What we can derive from that is we're expecting a very large order booking in quarter four, which is currently in progress. Order booked up until now, or one that will be booked, are not reported in general. It will be reported when we close the quarter. So our confidence will be able to meet our $1 billion order booking is very high. So therefore, the order booking for quarter four is going to be significant to be able to give us the backlog that we're expecting now. To move from an earlier estimate of 700 million to 800 million. So clearly, we are in the fray to win some very large contracts in quarter four.

Can you put some more color on that? Like what are those areas and how much, maybe we have not booked yet, but how much in first one and a half months we are at advanced stage four?

So we are in a very advanced stage, a large part of the infrastructure, including a very large data center project from hyperscaler, including a very large infrastructure effort projects, so very large, both from a long-term and critical perspective and also large projects. Upward of $350 million is the expectation to book to be able to get to what we are asking from a backlog perspective. And we are on track.

So, if these orders are very large orders, so are you seeing any, like, is it possible that there can be some delays, maybe on account of any procedural delays, or are you seeing any kind of difficulties in closing these order books by IP26 end?

No, we will, as I said, as I repeated earlier, we expect to close the FY26 with the order booking of 1 billion. So we will be having a robot quarter four to deliver that number and opening that lock. Thank you, sir.

And regarding the new expectation, while you mentioned about the top line, what are the operating margins of that company, sir, and what are the debt levels do we have?

Because we need to take that.

Yeah, yeah, yeah. So, the company which we are acquiring in Brazil, which is 2S Innovation Technologies, that company, we will be adding close to around 500 crores of the revenues out of it in FY27. And we are expecting to generate a beta run rate of around 50 crores post-integration and synergies. And we are expecting integration and synergies to be done in the 90 days of closing. So, what is the second part of your question?

Current debt levels in the company, sir.

So, there is no debt in the company. We are acquiring company at the zero debt, zero cash levels.

And what are the net margins, sir? Net profit they made on 500th year top line?

Roughly around, they make close to around 45 crores right now, but with the synergies and all, we are looking to make 50 crores, save it around next year on that.

No, no, I am asking about the net profit, sir.

Net profit, because there is no debt and all those things, because they would have made earlier some net profit. But from our perspective, we look at the EBITDA when we are acquiring the company, because we are not acquiring anything else below the EBITDA, because there is no depreciation and the tax is also, they have some carry forward losses and all those things. So to start with, they will not have any loss. So we have to calculate, obviously, based on the opening balance sheet when we acquire them fully, that what's going to be the tax carry forward and all those things. But right now, we are acquiring it basis the EBITDA. And the acquisition will take, obviously, 19, well, will take end of this quarter to get close.

Understood. And one last question regarding the delays in the supply chain that you highlighted in the PPT. Can you put some more color on it exactly? What is the issue? How is it impacting Blackbox exactly? And were we not aware of this issue in the last quarter? Because in last quarter, we were very much confident regarding execution and reporting the profitability growth from Q3 onward. And then suddenly this happened. So, you also mentioned that we will be executing the orders that we have currently built up in the book, sorry, that we are currently having, the orders in FY27. So, are you seeing these supply chain issues getting resolved now, and do you believe that, or do you believe that this will continue for two quarters from here?

I'll take that. Okay. So, I think, yeah, some of the activities, specifically in infrastructure projects, AI-led projects, more specifically data center, has extremely heightened up. As we speak, we support some of the MAG-7, the 957 customers in the U.S., with large order pipeline, already one, and the process of winning, which I already answered. If you are following the recent trends, specifically for connectivity and infrastructure, most specifically for fiber, there has been a tremendous demand for fiber, and there's a queue to get that, to be able to do that. More recently, one of the hyperscalers announced a very large investment. Interestingly, in a fiber company, close to $6 billion, to secure their fiber needs to build data centers. We support our customers. So some of the things are unpredictable and not really timed because the surge in demand has been extremely, extremely high. We expect that we have already passed through that, but will this continue? If the demand continues to rise the way it is, there is a constraint specifically for connectivity infrastructure, network infrastructure, most importantly. Fiber and cables, which is required. We are a services company. We require to be on a site to provide our technical services and deployment. So there has been a shortage of that, and if you look at the public domain more recently, it is in the domain that there has been all of a sudden humongous surge. You know, so that's the reason. We expect this to gradually ease out. We've already lost a quarter, as I said, $40-$50 million of backlogs that have been burned. What we expect when we get into fiscal 27, a project business is not a quarter-and-quarter business, but we are turning it into an annuity-mode business with our pipeline. So, expect with our pipeline and our audibles being strong, we

should catch it up over the course of the next fiscal year, and therefore, our guidance and our confidence for the next fiscal year, starting with a very good audit backlog,

gives us confidence that we continue to grow organically in a significant manner.

So, when you say, these things are getting normalized, is it like Q4 will also be getting infected because of this? Is that understanding correct?

So, Q4, already we have debated in the guidance at this time.

Right, and what about Q1 next year? When you say gradually this will get resolved, what is the correct interpretation?

We will be giving a guidance for the full year after the quarter ends. We will have a better view when we give our guidance for the next 15 years. As of now, opening up a very strong order book is a positive sign for us to be entering into fiscal 2017.

Thank you very much.

The next question is from the line of Jyoti Singh from Aryan Capital Markets Limited. Please proceed.

Thank you for the opportunity. So I just wanted to understand, like, because of the delay of order, we have revised our guidance. So similarly, few of our peers are also facing same kind of issues. So is there industry issues that is going on or what is the main issue? And when we will be seeing this order will be coming back. And after this, we also have revised our margin guidance. On a slightly lower side. So when we are seeing those coming back, and apart from this, we have discussed on the acquisition side. So what is the acquisition multiple that we are seeing on our EV by sales? And also, like you talked about on the debt side, so is this real debt funded or internal accrual funded?

Okay, so I will take the first part, and I'll give it to Geeper to take the second part of your work. So I think that in general, as you said, there has been a positive sign with respect to hyperactivity for projects which are AI-led data center infrastructure. Also, AI-led infrastructure and other large manufacturing plants or airport infrastructure, which is where Blackbox focuses on. We are a digital infrastructure company. We believe this is the era for that. I think the anticipated hyperactivity has been more than what we have thought. So there has been a lag pertaining to. And this is a trend across the industry, specifically in North America, because most of the activity for that is currently happening in, actually happening in North America. Other markets, of course, are picking up and announcing projects, but they're still in that. Our current focus was first to build our order book pipeline, ability to win large contracts, ability to build the relationship, and I think we have put up a dedicated theme over the last one year to do that, and that results are showing in our order book. We expect as we move forward that we should be able to burn and melt this order book in a significant manner, providing us growth as we go forward. So this is an industry-wide phenomenon of hyperactivity. We are first capturing our space in that, getting more momentum, more sites, more complex, very complex large projects, so our right to win has improved, therefore we're winning. We will focus on execution at this time, and we should be able to navigate that with our customers as we move forward in the quarter's ahead. You talked on the acquisition.

Yeah, and on there, yeah. And on the acquisition side, I think you asked about what is the value we are paying and all those things. So, we will be paying close to around 275 crores at closing, and this is subject to some working capital adjustments. And then there is additional deferred payments, including earnouts linked to the performance, which we will pay over the next two years. So, roughly, let's say, we will be making around 50 crores of the EBITDA from this. So, from that perspective, we will be paying at closing close to around five, five and a half times at closing. And then on the earnouts and the performance and all those things, at the peak level, if everything, let's say, goes well and all the earnouts and everything gets accrued, including all the deferred payments, then we will be paying another 100 crores for that. But that is subject to, obviously, the performance, and that will be payable in the next two years' timeline, not at the closing. And then this acquisition of 275 crores, what we have to pay, we will be funding it through internal accruals, mix of internal accruals and debt. And we have already told earlier also that we believe in putting our capital prudently. Our ROE and ROC, we want to be 25 to 30% type of range. So we don't want to put capital where we don't generate those type of ROE, and that is why the internal equivalence and the debt mix will be accordingly. We will use it prudently to pay the 275 crores.

Okay, thank you so much, sir. And sir, just wanted to understand this time our trade receivable has increased, I think, 74 crores. So, what kind of DSO we are seeing going forward and currently compared to FY25?

So, you are saying September financials? That's what you are looking at? Yes, sir.

Yes, yes.

So, you are saying on September, the receivables are at 674 crores because what has also happened is that between the March quarter and the September quarter, we had the growth. And, you know, we have some of the invoicing, the students, which happens in our business in the last month of the quarter, which has happened. Which has happened in the month of September because of some of the orders, execution happened in terms and the invoicing happens depending on the OEM supplies and all those things. And because of that, but all these receivables are now come into the same level as soon as because we realize our DSO, normal DSO is close to around 55 to 60 days. That's our DSO. So that will come to the normal level when we look at, let's say, now or at any other period.

Okay, sure. Thank you so much.

Thank you. Before we take the next question, we would like to remind participants that you may press star and 1 to ask a question. I repeat, participants who wish to ask a question may press star and 1 now. Thank you. The next question is from the line of Vivek, an individual investor. Please proceed.

Hi, Sanjeev. Thank you for the opportunity. Sanjeev, we've constantly missed on our top-line guidance, and even in this quarter, we've only put order book to the extent of about $130 million. So, what gives us the confidence that we'll hit a $350 million run rate? And either we're not seeing things clearly on the ground or we're not being candid in our communication with this rate. I'm just confused as to which one of it is it. And my second question on your long-term guidance of $2 billion, that's a tall ask. Even if I consider F530, which you've moved from F529 to F530, in 16 quarters, you'll have to triple your revenue run rate from about $1,700 right now too. 4,500 crores. I mean, I can't spread the message. Can you just help me with that?

Okay. So I think the first thing that's kind of the question is, I think we have guided the booking of a billion dollar per year, and we are holding on to that. So that puts us in quarter four for a significant quarter. So clearly, we are halfway through the quarter. And another half to go. So we are, it's like the thing, we took a billion dollar. So we are, orders in the bag, significantly. I produce one specifically for data center, 700 million dollars, and more to come, right? And these order books, you know, take time. So gradually, if you see for data center infrastructure, we had earlier. So, during the first quarter, we are revamping the team. We got in a new leader, Sean McGuire, an entire team. And progressively each quarter, we have been moving up. Large projects, which runs several hundred million for Hyperscalers and Mag-7, are very complex, and there are only three players. And we are at more sites than before, and more... The companies and before, earlier, you know, we had Meta as a last person, we can never have that. So those are in the bag at this time. The way the order book happens is from a letter of intent to low-level design to limited authorization to proceed to finally a contract. Because these are open projects, green field, massive being spent billions of dollars. So first you are identified, allocated, then you engage, then contracted. So that's how it happens. So, it takes a little bit of time there. So, I think we are almost to the wagon. So, therefore, we are certain for a billion dollars. Now, unfortunately, the expectation was to burn a little bit more, for the 50-50 million dollars more. That didn't happen specifically in infrastructure projects from data center. That is back-ended, and therefore, the opening backlog is going to increase. And that's fundamentally, as I told earlier on the call, if you look around and in the public domain, one of the largest cyber killers actually invested in a fiber company to get the fibers on demand because they can't get enough. We do this fiber project to connect a large scale data center. So we are at the other end waiting to be able for the owner or customer to supply the material because we don't supply the material. We do the design implementation. So we are confident to your question of meeting a billion dollar goal. An opening backlog, which was supposed to be $700 and you would have possibly hit our goal for revenues, has slipped by $50-$50 million. And that's what I quoted earlier. So now from a perspective of $2 billion, there's a very clear path of going there. One, of course, from an organic perspective, we expect if your backlog is going to open up. Thank you. And we expect this momentum. We just started in the development of infrastructure projects and other large-scale projects. This is coming to add significant large-value projects as we move forward into the next year. That's an organic side. So, therefore, a run of $300-$400 million gives you an average of 10-12% goes any which way for the next seven years' time, and that's what we're focused on, large projects. It's complex, very few players. We also expect this to reflect our investments. We are looking at projects now in Europe as well, at the world of winning. So those will inflate. So we expect to order books that we're opening up at 800, booking a billion now to book much more, getting into 27 and beyond. So that's the organic side. And then again, if you look at that, that would take us to close to $1.2 to $1.3 billion. And we have stated we have an inorganic theme. We just started with that as a small acquisition of 500 crores, as you heard today. But we'll drive that pipeline in a systemist manner. We have called out being prudent because we don't want to be, you know, kind of emotional about economics and lose the ROE and the ROCE. We'll focus on that, so it takes time. But we have a significant pipeline as well on that to drive that momentum because we believe at scale, our EBITDA-to-PAC conversion is going to improve significantly, so it will start to add up to our stat as we go in 27, 28, and beyond. So we have a team focus on that as well. So we just had one of them announced, and we can do the focal point. So between organic, 12-15% through a very strong pipeline, order book, infrastructure being done, America is possibly getting into UK and Europe now. We just put up a leader in Europe. We announced India and APAC. We just announced a leader, Samir Bhattar, on the public domain, who joined us. So I think we have clear parts of organic perspective. Inorganic also, we will drive reasonably through our prudent capital deployment. We expect as we move forward, we will have... We will not increase our leverage more than we need to do, right? So, as we can start to bump into 2728, it will be attractive for us. So, we should be able to drive significant momentum in acquisition as well. A combination of both organic, to our pipeline, large infrastructure projects, and our inorganic that we are also driving now. We believe we have a clear path to move forward towards our goal of $2 billion.

Sanjeev, just to labor on that point again, we guided for about 15% growth starting this year. And even now, just in your commentary, you mentioned a 10% to 15% growth. I mean, if you've missed orders this year, ideally, next year, we should be growing much higher, right? I mean, if that order has just been deferred to the next year, shouldn't we be growing about 20% next year? And on the back of the acquisition, your overall revenue ideally should be in the range of 20% to 25%. I mean, just 10% to 12% I don't think gets us to $1.2 billion. We are at a $700 million run rate. I mean, if we end the year at 6,300 crores, that's a $700 million. For us to move from 700 to 1.2 in four years' time, that will take a lot higher than just a 10% to 15% cadre. So at some point, the math has to catch up. So your growth rate starts just stagnating at 10% to 12%, while previously you've not delivered any revenue growth.

Yeah, so I think you're right. I think that this goes a little bit more than 15% or 16%. I think the first fundamental goal for us has been to have enough backlog to be able to go on that. I agree. I think we possibly will do more at this time. But I think what I'm alluding to is I... We have a path of driving organic to large scale projects and order books. So if you look at the order book growth of 50% compared to opening down into last year, we're thinking of currently at the back of the environment that we burn at whatever rate we're expecting. Could we burn more of the $300-$400 million that is lying extra in our order book than when we opened up last year? For possibility, right? But considering we just quoted about some concerns and this probably $50 million worth of revenues, we took that point. But will that improve? And a backlog of $300-400 million should drive... 50-30% more, I agree. But we're taking the view, we'll guide it at the beginning of the year, and that's what I said earlier, we'll guide as we get a view of how we're looking, closing the year, first booking a billion, opening up a million dollars, and then guide as to what we believe we can grow and the possibility are that we could possibly be doing organic more than 15, from that perspective.

Jeev, and just for us to get to $2 billion, we can't just rely on the data center, but that is a project business, it's a one-time business, and then we have to replenish the order code completely. What is happening on the managed services and the maintenance contract side, is that by going? For us to get to $2 billion, we can't just rely, because then that will require us to replenish a couple of $100 million every year, which might get tough. And on the data center part, we've been calling out massive activity, but we've barely scratched the surface. I mean, these companies have spent a couple of trillion dollars already, and we've barely acquired the orders, and we're still not executed. So, I mean, I'm just trying to piece the, I mean, can you just give me a broad macro view on how the sales teams are performing, not just on the data center side, but also on the other side.

This order protein of about $230 million every quarter will not lead us to $2 billion.

We'll have to get to possibly a $350, $200, $400 million run rate every quarter. Can you just speak to that, please?

Yeah, so first of all, the $2 billion, I think I just said $700 million is supposed to be inorganic. So even if we look at $1.3 billion, right, I think from a current backlog perspective, we are covered, we'll talk about 60% as we start the quarter of Saturday year, but that's where we are. To answer the earlier question, I think although we are seeing more... Thank you. We still have good over 50-60% of our business, to your point, as you rightly said, from our non-data center business. It includes our bank business. It includes very large business in our airport, which is multi-year managed services airport like Miami, which runs into tens of millions of dollars on Newark Airport. So we are expecting large projects and amity and managed services. We are doing for a very large healthcare to $20 million worth of managed services. We have multi like that. So the answer is yes, we have both. So although if you look at that table, the project bumps up more in a certain quarter, but it's not really a quarter and quarter business. You can get a very large order which will burn over period of time. So we are also focused, the large part of the team is enterprise focused on non-data center, similar business, connectivity, networking, workplace, modernization, and so on and so forth, predictable large scale. We are expecting large scale reference in wireless infrastructure, network infrastructure, so that will continue to happen, run by Jay Renkut that runs it through a large team. Data center, of course, we require a smaller team. We don't require 50 people, 100 people from a scale standpoint. There are only five hyperscalers and maybe 10 multi-tenant guys. So we have a smaller team, but high-performance team that was put in place in fiscal 26, as I told earlier, with Sean McGuire. So we're not leaving away and only focusing on data centers. We're just saying data center is hyperactive. There are very few large-scale complex project institutions. It's time-taking, but a pipeline and an order book of large nature will burn over a period of time for the next two, three, four years' time. When you do a project of $200 million, it takes two and a half years to burn. Of course, we're expected to win another 200 and 400, but the roadmap for that, at least for the foreseeable future... It's there, right? And I think, you know, so we are focused on working on that, then moving to Europe. We have not even come to India at this time, and possibly at some point we will look at whether we want to participate in some of these things in India, when India actually starts to build or deliver those projects. Currently, it's that conceptual MOU kind of a stage. So both the tracks. Non-data center and data center, where we are going to turn a data center pipeline into a project into a more annuity predictable business with large pipeline. Some portion of that will turn into managed services for what we call day-to-operations. So we are looking at both, and we are driving both from that perspective.

Sanjeev, just one last question.

Since we brought the new head of GSI into the company, I mean, the order booking for the last three quarters has basically been

around the $200-$230 million range. I appreciate that once you've set the team in place and with the new go-to market strategy, I mean, at some point, the sales team has to fire. I mean, so what, ideally, next year onwards, what should be the quarterly order bookend? And will that be lumpy nature?

Should we be moving to a different orbit from about a $250,000,000,000 to a much higher?

Because that, I mean... That map doesn't change. We can't be at a $250, $230 million run rate and expect to get a $1.2 billion target in the next three to four years.

I agree. I think you're right. So we will see normal growth in the enterprise sector, which is their business and of course so on, which is more 15 to 20 percent. We'll show hyper growth. So if you booked, we had $100 million booking or $200 million booking in data center the previous year. We're expecting $400 or $600, which is multi-time jump. A combination of both, our goal next year moving into should be upward of 300, 350, every quarter going forward. We are currently at 230, 250. Quarter four, of course, will be much larger and we'll report when we get there. And we have an ability now to be able to see that funnel culminating. Having said that, the enterprise kind of business supporting our bank, first of all, we have to keep those customers going and then we'll see new customers. This is in respect. 12, 15, 20, depending which quarter will end up. But I think we're expecting a significant bump quarter and quarter going forward, similar types, several hundred million dollars in the real estate infrastructure. It's even half the business, 40% of the business, but that didn't exist earlier. So we were doing 230, 180, 200, 250, whatever its number was. I mean, we're right, we're expecting it to turn.

I appreciate that. Have you bitten more than we can chew as far as our $2 billion target is concerned? I mean, I appreciate that even on the inordinate path, with a $50 million acquisition, we still got to cover.

Sorry to interrupt, sir. Vivek, sir, can we request that you can join the team?

I will join. Thank you.

Thank you. Before we take the next participants. Anyone who wishes to ask a question may press star and 1 on their touch-tone telephone. I repeat, to ask a question, please press star and 1 now. The next question is from the line of Disha from Sapphire Capital. Please proceed.

Yeah, hello, sir. Am I audible?

Yes, Disha, you are audible. Please proceed.

Yes, okay. So, firstly, on this current audiobook that we have, what sort of execution timeline do we see here?

Can you repeat the question, please? I think you were just ranked.

The executive timeline for the order book.

Okay, so I think we have several kinds of order books. The order books includes and with the order books that are recognized relatively over a period of time. If you look at an investor presentation, you will see that. Project backlogs run between nine months to 24 months. For enterprise projects, they usually close within a year. For large-scale infrastructure projects for data centers, depending on the size that might last several years. An average, if you look at it, I think we look at an average of one year, some last for three months, six months, nine months, and two years' time. Large hypercellular projects run over seven years. Enterprise projects usually run between three months to six months' time. And the services are ratedly recognized every month, every quarter, as well as counting.

Yeah, so just following up on what the previous participants are, if you're targeting the $2 billion by 2050, and if you close this year by around, say, the upper end of our guidance, around 675 crores, that would mean that we need a target of around 25 to 50%. But we're only just targeting, I think you mentioned, 12 to 15% growth. So what is the sort of glide path that you see?

No, so we are targeting a CAGR of 30-35% including inorganic to get to our goal of $2 billion, right? So that's what we are looking at. We are looking at 733 and wherever the number lies with respect to our inorganic goal, we will start with that process. As we have called it in a smaller way, but we have larger energy system that as well. Having said that, a larger part of the company is focused on organic growth, which includes our enterprise business and which also includes our infrastructure business, and we feel confident. First thing first, to be able to close the year with respect to what year guided for order booking, open up a strong backlog, continue to push and drive that organic growth. As we primarily look for inorganic opportunities, a combination of goals. Kager of 30% or more, you're not sure of that, should lead us to where we want to go to, to billion dollars, is what I'll go through.

Yeah, so a trigger of 30% will lead to that. So just for the acquisition that we've done, what sort of growth do we see for this company?

Do you want to take that?

Yeah, yeah, yeah. So this company has grown at a CAGR of close to around 20% from last year to this year also in 2025 tentative numbers. So we are expecting at least 12 to 15% growth because Brazil is a very high growth market and we are expecting that FY27, we should add 500 and then from FY28 onward, we should grow at least at a minimum. Bare minimum at 20% levels for this company.

Okay, okay. And just what is this rationale for this acquisition and what sort of synergy do we see here?

I'll take that. Our footprint currently is fairly small, we do about $14-50 million. The company is a fairly large enterprise-focused network integrator, a large Cisco partner, very marquee clients. Addison to what we do, we largely ditch connectivity and heavy infrastructure, so we can crop cells. We expect cells... The second, of course, the company was only present in LATAM, largely Brazil, but has marquee customers, good relationships, with no ability to serve them overseas, and they were serving it to some. Partners and otherwise. So with black box presence in America or Europe or otherwise, we expect some flow of business coming to other markets as well at the back of this acquisition. Third, the seat on the table with us with respect to networking conversation, more specifically from a Cisco standpoint, is much better to have the relationship which could be attractive for our margin going forward. In combination, I think the rattle was to get to scale, because if you are not having scale, if you are doing $12-$15 million in the market, you don't have a seat on the table to large customers' stocks. So we get a seat on the table. We also get an ability to cross-leverage each other in that geography, and also get a leverage to, you know, to be able to serve some of the QS's customers in other geographies that they were not serving. So, we see a multitude of synergies. As you move forward with integration over 90 days, the first thing is to, you know, get into our run rate and then look at combined strength of 1 plus 1 to see how we can make it more than 2.

Okay, okay. And just last question on the margins. I think this time, so obviously because the revenue is deferred and the supply chain issues, we've reduced the guidance. But going ahead with this acquisition as well, how do we see the margin trajectory?

We continue to hold up to a margin guidance. The goal is to move to 10%. We are at 99%. So I think this acquisition or otherwise as well, that scale, we believe, will be margin-accredited, both from an EBITDA perspective and, of course, much better from a PACT perspective. We expect our PACT cager to be significantly higher as we move towards growth of value. Our EBITDA cager will also be significantly higher. I think that the fat conversion will significantly improve at scale because we don't expect, you know, that to be linear. Therefore, a credit from that perspective will be getting 27, 28 and beyond.

So, 10% sort of EBITDA margins can be targeted for everyone?

That's what we're targeting, yes.

Thank you. That's it from my side. Thank you.

Thank you. The next question is from the line of Rohan Navpal from Helios Capital Management. Please proceed.

Okay, thanks for taking my question. So, first question I had is, so this is the seventh quarter in which we've been recording exceptional expenses on revision for rents and foreclosure leases. How much longer do we expect to record these exceptional items?

So, you know, Rohan, we are, let's say, because we are operating multi-geographies, we thought that technically the FY26 should be the last one, but right now, I think from a visibility perspective, I think that at least another two quarters in FY27, we should have these exceptional items, but the exceptional expenses should a little bit go down, Because we continue to pivot and, let's say, identify the opportunities to severe the people wherever we think that it is not required or whatever, and that's what comes into it. And with respect to the rent and all those things, it is more like, so let's say what we are also doing now is that we are not recognizing the overall rent restructuring into one quarter because as per the gap, if I have done a rent restructuring and some consolidation or whatever, I need to recognize during the period of the term of the contract as per the lease accounting. So that is why it is coming like that. So the pattern disrupting is a lower amount as compared to the severance. I am expecting severance amount to come down drastically in going three quarters, but I am expecting that next two or three quarters, still the exceptional items will be there.

Okay, understood. Thanks for that. And then my second question is on demand. So, I mean, we already have a long-standing relationship with one of the large hyperscalers that is committed to a significant amount of capital expenditure this year. So, we have a path to benefit from some of that capex. But from some of the other hyperscalers that have announced even larger amounts of CapEx, how exactly does the sales cycle work in this situation? If someone's announced, say, $200 billion of CapEx this year, is there any way in which we have an opportunity to participate a service some have had spent? Or is it, or will it take a long, a significant part of this fiscal 27 for us? And then we have to effectively, we get to service some of that spend in the next year if the development efforts are successful. I just want to get a sense of the dynamics at play over here.

Oh, I think Sanjeev is dropped.

So I can take this. So basically, you know, like we are dealing with, let's say, one large customer on a hyperscaler, but then we have the other hyperscalers, like we are speaking with two more large hyperscalers who have announced the large project, and also one of the joint venture between the hyperscaler and the large, let's say, the GPT company. We are dealing with them, and the steel cycles typically... Sales cycle typically on this whole data center thing is more like, I will say, three to nine months type of period from a sales cycle. And the decision making is happening. Most of the hyperscalers, it is between hyperscalers and also the general contractors who are getting involved. The decision making happens between them. So there are like a lot of round of interviews and then there are safety practices and then there is a prior experience and all those things. And most of the hyperscalers, it is not on the, it is more like a technical discussion. In all these rounds, the financial discussion is not, let's say, not much. We have to obviously give the financial models and all those things and in terms of margin and all, but it is more like a discussion type of thing, and then accordingly they allocate. So let's say the selection or let's say the allotment of the project is more happening on the technical parameters. The financial parameters for everybody remains almost in the same ballpark numbers.

Okay, understood. So, on the significant surge in CapEx X of the hyperscaler that's already a customer, we would not have as much, we won't be able to service or participate in as much of that. This year, it would primarily be a 2027 story. Is that a fair understanding?

No, I believe I'll take that. So I think we have to be prudent as to where we want to deploy our capital and our resources. So we are focused on six specific markets in America where we focus with this sector. The U.S. has 50 states. Data Center is getting built in 50 states. This is a localized work. Obviously, you cannot have hundreds of resources parked in every place. It's just not physically possible. So, therefore, you choose what you can deliver best because if you do a very complex, large-scale, mighty-scale project, if you don't do well, the chances of getting a repeat becomes low. You can also have a cost overdone. You can have delays. So, you choose your battle accordingly. We have, over the last several quarters, reorganized ourselves as to where we will focus on. Therefore, and those conversations in my meetings with senior management of these hyperscalers or other multitenants, they're clear as to where we are and where we have this trend. So we do not want to be just spraying and praying, right? I think that's one way to do it is too much opportunity means nothing because you'll be bidding for too many things and winning. We'd rather be focused on, as Zipa called out, where we are allocated more on technical strength, resources, capability, safety, and so on and so forth. And the commercial discussion negotiations are fairly, fairly understood fairly well now. It's market-driven labor rates. Your overheads, your margins. Fill it transparently because it's not a fixed cost, fixed scope project. The project changes on the fly because it's a barren land built for two gigawatts, right? So I think it's a different kind of project. So there's an entry barrier. Anybody can't come and bid for this project. It's a long lead time, and if you come out a winner, I think you would be here for long term. So that's what we're trying to build.

And just last question from my end. So we discussed supply chain bottlenecks. There seems to be a certain amount of social and political resistance to the development of data centers in certain states. You have certain builders looking at restricting the build out. Is that impacting us in any way or even at a business development standpoint at this point?

No, I believe, I think, so, of course, there are certain specific states where there's more hyperactivity and so on and so forth, but I think, I don't think we are affected by that. As I told earlier, we are focused around where our winability is higher, focused on our win ratio and stuff like that. So, we're not affected by that.

Okay, that's it for mine. Thank you very much.

Thank you. Ladies and gentlemen, due to time constraints, that was the last question for today. I now hand over the conference to management for closing comments. Over to you, sir.

So, thank you, everybody, for joining the call. I hope we have been able to address all your queries. For any further information, kindly get in touch with Purvesh Pare, our Head of Investor Relations, or Strategy Growth Advisors, our Investor Relations Advisors. Thank you so much.

Thank you. On behalf of Blackbox Limited that concludes this conference, thank you for joining us and you may now disconnect your lines. Thank you.