Homegrown supercomputing systems manufacturer Netweb Technologies is sharpening its focus on AI Systems, High Performance Computing (HPC) and Private Cloud. In an exclusive interaction with Fortune India, chairman and managing director Sanjay Lodha said the company’s continued focus on these segments is enabling it to capitalise on strong industry tailwinds, particularly rising investments in domestic artificial investment (AI) infrastructure.

“Netweb’s sustained execution across AI, HPC and Private Cloud is strengthening our leadership in the high-end computing systems space,” Lodha said.

He said that the Delhi-based company has delivered organic revenue growth of 30–40% CAGR over the years, driven largely by its sharp focus on these segments, which together account for nearly 90% of overall revenue. “HPC has been our foundation for over 20 years, with more than 500 supercomputers installed across India, and adoption in this segment continues to rise,” Lodha said. Private Cloud, supported by rapid expansion in India’s data centre ecosystem, now contributes around 35% of the company’s business.

AI Systems emerge as fastest-growing vertical

AI Systems has emerged as the fastest-growing vertical, with the segment’s revenue contribution climbing from about 5% two years ago to nearly 48% on a nine-month basis, largely driven by strategic government-led orders aligned with India’s ambition to become a global AI hub. Lodha pointed to the ₹10,000-crore-plus IndiaAI Mission as a key catalyst, noting that Netweb executed strategic AI orders worth around ₹400–450 crore during the quarter and currently holds a strategic order book of nearly ₹1,700 crore.

“These large-value projects are classified as strategic orders and are distinct from our organic business,” he said.

Netweb’s order book continues to provide strong revenue visibility. The company’s organic order book stands at around ₹520 crore, with L1 visibility of an additional ₹300 crore, taking organic visibility to about ₹820 crore. Including strategic orders, the total order book is close to ₹2,300 crore, while the overall pipeline is estimated at nearly ₹4,200 crore.

On rising AI revenue concentration, Lodha said the spike is primarily due to strategic orders, while organic AI revenue continues to account for about 20–25%. HPC and Private Cloud together contribute roughly 65–70%, ensuring a balanced revenue mix over time.

Netweb serves a marquee client base that includes ISRO, Infosys and Zoho, delivering mission-critical HPC, AI and data centre solutions to large enterprises and government agencies. While its manufacturing and solution design are India-centric, the company’s global reach is enabled through deep partnerships with leading chipmakers such as Nvidia, Intel and AMD.

The company has also remained largely insulated from global supply-chain disruptions, including shortages of GPUs and advanced chips. “Our strong partnerships with players like NVIDIA, AMD and Samsung, and our solution-driven business model, allow us to plan supply efficiently,” Lodha said, adding that the company does not see any material impact on deliveries or margins.

No impact of new labour codes

Lodha also said the implementation of new labour codes will have “no impact” on the company. “We were already aligned with the revised wage structure well before implementation,” he said, noting that Netweb’s workforce is largely R&D and engineering-led.

On capital allocation, Netweb said it remains a capability-driven business with no major capex requirements until revenues reach ₹3,000–3,500 crore. Cash generated from operations is being reinvested to strengthen its core growth pillars, while the company continues to operate with zero debt.

On competition from global OEMs, Lodha emphasised Netweb’s full-stack, India-centric model as a key differentiator. “We design, manufacture and integrate both hardware and software in-house. Global OEMs typically do not offer end-to-end solutions,” he said, adding that the company’s status as an NVIDIA Elite Partner and its deep relationships with government and enterprise clients continue to support strong pricing power and technological leadership.

Delivers robust Q3 results

The outlook is backed by record Q3 FY26 performance, with the company’s revenue surging 141% year-on-year to hit record high of ₹804.93 crore and profit after tax jumping 146.7% to all-time high of ₹73.31 crore. Growth was led by the AI Systems business, which accounted for 64.2% of quarterly revenue, reflecting accelerating adoption of AI-led compute solutions across government and enterprise customers.

During the quarter, Netweb executed a ₹450.39 crore strategic order, reinforcing its positioning as India’s largest original equipment manufacturer (OEM) in high-end computing. While the execution of such large projects impacted profitability margins—EBITDA margins moderated to 12.2%—management indicated that margin pressure is temporary, with long-term scale benefits expected as volumes ramp up.

Lodha acknowledged that strategic orders typically carry lower margins due to their scale. “We had clearly guided that large strategic orders inherently come with around a 200 basis point lower margin,” he said. Even so, margins remain healthy and among the best in the industry. Adjusted for the impact of strategic orders, Netweb’s underlying operating EBITDA margin stands at around 13.6%, within its guided range, he added.

As of December 31, 2025, the company remainsed net debt-free, with a cash balance of ₹190.08 crore as of December-end, providing flexibility to invest in capacity, technology and future growth opportunities.

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