NETWEB

CIN : L72100HR1999PLC103911 PAN NO : AABCN4805A GST NO : 06AABCN4805A1Z3 Date: 23.01.2024 To, To, BSE Limited The National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, “Exchange Plaza”, Bandra – Kurla Complex, Dalal Street, Fort, Bandra (EAST), Mumbai – 400 051 Mumbai – 400 001. NSE SYMBOL: NETWEB BSE Scrip Code: 543945 SUBJECT: EARNING PRESENTATION ON THE QUARTERLY FINANCIAL RESULTS Dear Sir/ Madam, Please find enclosed herewith the Earning Presentation on the unaudited standalone financial results for the quarter ended December 31, 2023 Kindly take the same on record. Netweb Technologies India Limited [Formerly Known as Netweb Technologies India Private Limited] Plot No. H-1, Block-H, Pocket No. 9, Faridabad Industrial Town, Sector-57, Faridabad, Haryana 121004 Tel. No. : +91-129-2310400 Website : www.netwebindia.com E-mail : complianceofficer@netwebindia.com India’s Leading High-end Computing Solutions (HCS) Provider Q3FY24 - Earnings Presentation January 2024 BSE: 543945 NSE: NETWEB Bloomberg: NETWEB:IN Safe Harbour Statement This presentation may contain certain “forward-looking statements” within the meaning of applicable securities laws and regulations, which may include those describing the Company’s strategies, strategic direction, objectives, future projects and/or prospects, estimates etc. Investors are cautioned that “forward looking statements” are based on certain assumptions of future events over which the Company exercises no control. Therefore, there can be no guarantee as to their accuracy and readers are advised not to place any undue reliance on these forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. These statements involve a number of risks, uncertainties and other factors that could cause actual results or positions to differ materially from those that may be projected or implied by these forward-looking statements. Such risks and uncertainties include, but are not limited to; growth, competition, acquisitions, domestic and international economic conditions affecting demand, supply and price conditions in the various business's verticals in the Company’s portfolio, changes in Government regulations, laws, statutes, judicial pronouncement, tax regimes, and the ability to attract and retain high quality human resource. Agenda About Netweb Technologies 1 Quarterly Key Highlights 2 Key Investment Highlights 3 Growth Drivers 4 Annexure 5 About Netweb Technologies India’s leading Indian origin, owned and controlled OEM in the space of High-end Computing Solutions (HCS) ● Offers a full stack of product and solution suite with comprehensive capabilities in designing, developing, implementing and integrating high Business Tailwinds ►► performance computing solutions ● Collaborates with various technology partners such as Intel Americas, Inc, AMD, ‘Make in India’ Policy & ‘PLI Scheme’ of the Samsung India Electronics Private Ltd, Nvidia & Seagate India Private Ltd GOI ● Develops homegrown compute and storage technologies, deploys Import Licensing on Servers, Laptop, & supercomputing infrastructure to meet the rising computational demands of Tablets from Nov 2023 by DGFT* businesses, academia, and research organizations Overview ● Compliant with the “Make in India” policy of the Government of India ‘Make AI in India & Make AI work for India’ initiative of the GOI ● One of the few OEMs in India eligible to participate in and seek incentives in terms of both the IT Hardware PLI and Telecom and Networking PLI schemes Growing demand for cloud-based services and network switches ● Established in 1999 with manufacturing facility located in Faridabad, Haryana and 17 offices located across India Upgrading network to 5G technology driving 5G ORAN Q3 FY24 Financial Metrics Accelerator / GPU 300+ Supercomputing 4000+ based AI systems & Revenue from Operation: ₹2,534.0Mn systems installed Customers: Govt. (50.8%) vs Non-Govt. (49.2%) enterprise workstations Op EBITDA Margin: PAT Margin: 10.1% 13.5% Supercomputers listed eleven 50+ Private cloud & HCI 3 times in the world's top 500 installations ROCE1: 32.1% ROE2: 25.3% supercomputers *Notification No. 26/2023 dated 03.08.2023 – GOI, Ministry of Commerce & Industry Note: 1Return on Capital Employed annualized ; 2Return on Equity annualized; Snapshot of Our HCS Offerings India’s leading HCS provider with fully integrated design and manufacturing capabilities (A) High performance computing (Supercomputing / HPC) (B) Private cloud and hyperconverged infrastructure (HCI) systems ● Bespoke, and tailored with specialized hardware designs and architecture ● Private cloud and HCI offers hyper-converged capabilities i.e., combining ● Cater to varied customer specifications compute, storage, and network' to build: Simplified Cluster Cluster Private & Cloud Cloud Deployment Management HCI Hybrid Cloud Tools Native Storage (D) High performance storage (HPS/Enterprise (C) AI systems and enterprise workstations Storage) solutions ● Address standalone parallel compute-intensive applications, ● Centralized repository for business-critical information that machine learning, deep learning, and support CF-CAD-CMD provides data sharing, data protection across multiple computer Applications. systems Unified High IOPs Machine Deep Storage Storage Learning Learning Parallel File Scalable to System Storage Exabytes (E) Data Centre servers (F) Software and services for HCS offerings ● Designed to reduce the complexity of managing critical and heavy ● Cloud Managed Services – These are the partial or complete workloads. management and control of a client's cloud platform, including ● Servers are advanced Al powered that allow intelligent and efficient data migration, maintenance, and optimization processing and storage Cloud 5G related AI, ML & deep Low rack space High energy High in-built Wide accelerator/ solutions services learning as a service consumption efficiency Storage GPU support *Source: F&S Report; Management Commentary “We are happy to announce that the company achieved its highest ever quarterly revenue and profits in the current quarter. It is also pertinent to note that revenue from AI systems and enterprise workstations segment increased by ~340% YoY. Operating income increased by 41.9% YoY and 74.8% QoQ, reaching ₹2,534 million in Q3’FY24. Gross profit was at ₹551 million, registering a YoY growth of 20.2% and a QoQ growth of 40.8%. Gross profit margin was 21.8%, down from 25.7% in the corresponding quarter of the previous year. Gross profit margin for our business needs to be seen on an annual basis, as we deal in high-end compute segment where in the margins may vary quarter to quarter. Gross profit margin for 9 months ended Dec 23 stood at 25.4%. While Operating EBITDA for the quarter increased by 9.9% on YoY basis to ₹342 million, it increased by 78.0% on QoQ basis. The operating EBITDA margin for the quarter was at 13.5%. Profit after tax (PAT) for the quarter increased by 20.0% YoY and 71.8% QoQ, reaching ₹260 million, and the PAT margin for the quarter was at 10.1%. In recent months, adoption of Generative AI models have expanded rapidly, integrating widely across various industries and signaling a dynamic evolution in our approach to work and life. Notably, India's substantial potential is evident in recent developments, highlighting the country's capacity to seize opportunities in this evolving landscape. This is promising for the expansion of our diverse product offerings. Our business pipeline and order book is strong, reflecting continual growth. We are pleased to inform you that we have received the prestigious order from VSSC (ISRO) for their upcoming supercomputer, envisaged to be the largest for the Department of Space, valued at ~₹1,477 million. Continuous improvements in our capabilities, along with the expansion of our operations and product portfolio, positions us favorably for sustained growth while retaining our technological leadership. “ Sanjay Lodha, CMD Agenda About Netweb Technologies 1 Quarterly Key Highlights 2 Key Investment Highlights 3 Growth Drivers 4 Annexure 5 Quarterly Key Highlights Profit and Loss Summary ₹ in millions Gross Operating Cash Operating Income PBT PAT Profit EBITDA Profit 2,534.0 551.4 342.5 351.5 260.1 278.2 Growth (YoY) 41.9% 20.2% 9.9% 21.0% 20.0% 22.7% Growth (QoQ) 74.8% 40.8% 78.0% 74.0% 71.8% 67.9% Margin 21.8% 13.5% 13.6% 10.1% EPS/CEPS (in INR)* 4.76 5.09 *EPS and CEPS are diluted & non-annualized Quarterly Key Highlights (Cont.) Balance Sheet Summary ₹ in millions Net Debt/ Equity Net Debt/ Op. EBITDA* 0.35 0.30 Particulars Dec’22 Mar’23 Sept’23 Dec’23 0.40 0.41 Equity Share Capital 56.6 101. 9 112.1 112.1 Other Equity 751.5 834.8 3,605.4 3,822.6 (0.00) (0.00) Net Worth 808.1 936.7 3,717.5 3,934.8 (0.05) (0.22) Borrowing 296.7 304.0 44.4 142.5 Dec' 22 Mar'23 Sept' 23 Dec' 23 Dec' 22 Mar' 23 Sept' 23 Dec' 23 Lease Liabilities 39.2 52.1 82.6 78.4 Cash and Cash Equivalent 51.8 70.9 127.3 403.6 ROE* ROCE* Net Debt 284.2 285.1 (0.3) (182.7) 71.6% 64.4% 77.6% 68.0% Net Fixed Assets 200.9 251.5 313.7 318.5 Net Current Assets# 879.8 959.9 3,362.1 3,351.0 32.1% 25.3% 22.3% 17.4% Ratios Fixed Asset Turnover Ratio* 21.3 17.7 13.1 19.2 Cash Conversion Cycle* 60 58 108 77 Dec' 22 Mar'23 Sept' 23 Dec' 23 Dec' 22 Mar'23 Sept' 23 Dec' 23 *Dec ’22, Sep’23 & Dect‘23 are Annualized. #Net Current Assets does not include Short-term Borrowing & Cash & Cash Equivalents as they are part of Net Debt. It includes unutilized proceeds from IPO Quarterly Key Highlights (Cont.) Revenue breakup – HCS Offering Launched Network Switches in the quarter, contributing INR ~10 Mn to the Topline Q3 FY24 – Revenue Breakdown by offerings 951 1,004 255 815 681 1%0.4% 1% 586 509 s n 113 o 4% illim 58 6% n ₹ i Q3 FY23 Q2 FY24 Q3 FY24 Q3 FY23 Q2 FY24 Q3 FY24 Q3 FY23 Q2 FY24 Q3 FY24 10% 40% High performance computing Private cloud and hyperconverged AI systems and enterprise (Supercomputing / HPC) systems infrastructure (HCI) workstations 108 38% 150 43 117 72 30 s n 18 o 41 Supercomputing / HPC Systems illim 43 Private cloud & HCI n i ₹ Q3 FY23 Q2 FY24 Q3 FY24 Q3 FY23 Q2 FY24 Q3 FY24 Q3 FY23 Q2 FY24 Q3 FY24 AI & enterprise workstations HPS solutions High performance storage Software and services for Data Centre servers (HPS/Enterprise Storage) solutions HCS offerings Data centre server Software & service for HCS offerings Network Switches Spare & others Quarterly Key Highlights (Cont.) Revenue breakup – Application Industry Q3 FY24 – Revenue Breakdown by application industry 1,103 923 884 s n 580 o illim 401 258 1% n i 19% ₹ Q3 FY23 Q2 FY24 Q3 FY24 Q3 FY23 Q2 FY24 Q3 FY24 Higher Education and Research Information Technology and 44% Information Technology Enabled Services 36% 626 191 475 s n o 278 Higher Education and Research illim 32 18 n i Information Technology and Information ₹ Q3 FY23 Q2 FY24 Q3 FY24 Q3 FY23 Q2 FY24 Q3 FY24 Technology Enabled Services Other Enterprises Space and Defence Other Enterprises Space and Defence *Other enterprises includes BFSI, entertainment and media etc. Quarterly Key Highlights (Cont.) Diverse Customer Base Revenue^ from Repeat Customers Customer Concentration^ Higher education and IT & ITES Research 90.7% Top10 Top 5 77.7% 65.1% 58.7% 57.8% 49.5% 47.1% 48.7% 38.4% FY22 FY23 9M'FY24 FY22 FY23 9M'FY24 256 10.67% Repeat Customers (9M’FY24) Space & Defence Others associated for over 5.07 years using Customer Accretion CAGR* Fiscal 2016 as the base 3.36 years 124 Average top 10 customer age New clients onboarded across diverse (9M’FY24) using Fiscal 2016 as base industries in the 9M’FY24 Note: *CAGR FY20 – 9M.FY24, period 3.75 years ; **9M’FY24 ^As a % of revenue from operations excludes other operating revenue Quarterly Profit & Loss ₹ in millions Particulars​ Q3 FY24​ Q3 FY23 ​ YoY Change​ Q2 FY24​ QoQ Change​ 9M FY24 9M FY23 YoY Change FY 23 Operating Income​ 2,534.0 1,785.6 41.9% 1,449.8 74.8% 4,581.9 3,215.8 42.5% 4,449.7 Gross Profit 551.4 458.9 20.2% 391.6 40.8% 1,164.8 880.6 32.3% 1,206.1 Gross Profit Margin (%) 21.8% 25.7% (394) bps 27.0% (525) bps 25.4% 27.4% (196) bps 27.1% Operating EBITDA​ 342.5 311.6 9.9% 192.3 78.0% 621.1 539.2 15.2% 700.2 Operating EBITDA Mrg (%)​ 13.5% 17.4% (393) bps 13.3% 25 bps 13.6% 16.8% (321) bps 15.7% Other Income 45.1 1.2 3598.4% 30.2 49.4% 79.5 3.8 1991.3% 6.8 Finance Cost​ 18.0 12.4 44.9% 6.2 189.9% 33.8 30.7 10.0% 40.7 Depreciation​ 18.1 10.0 81.3% 14.3 26.5% 45.2 24.2 86.7% 36.6 PBT​ 351.5 290.4 21.0% 202.1 74.0% 621.6 488.0 27.4% 629.6 PAT​ 260.1 216.8 20.0% 151.4 71.8% 462.5 364.1 27.0% 469.4 PAT Margin (%) 10.1% 12.1% (205) bps 10.2% (14) bps 9.9% 11.3% (139) bps 10.5% EPS1 (₹)​ 4.76 4.26 11.8% 2.70 76.4% 8.45 7.15 18.2% 9.07 1. Diluted EPS; non-annualised Agenda About Netweb Technologies 1 Quarterly Key Highlights 2 Key Investment Highlights 3 Growth Drivers 4 Annexure 5 Key Investment Highlights 1 4 India’s leading Indian origin owned Long standing relationship with a and controlled OEM for HCS with marquee and diverse integrated design and manufacturing customer base capabilities 2 5 Operates in a rapidly evolving and Track record of financial performance technologically advanced and consistent growth industry with high entry barriers 3 6 Significant product development and Experienced Board & Senior innovation through R&D Management Team *Source: F&S Report Agenda About Netweb Technologies 1 Quarterly Key Highlights 2 Key Investment Highlights 3 Growth Drivers 4 Annexure 5 Growth Drivers Opportunities to realize sustainable growth of the business Strong Topline Visibility Enhanced Capabilties Expansion of Operations Expanding Product Portfolio To capitalize on emerging Increasing investments in Forayed into developing opportunities, will establish Generative AI infra by Govt new product lines, viz., Pipeline# SMT line within 3-6 months & Large enterprises to cater Network Switches and 5G ₹ 32,322 Mn to demand for LLM related ORAN Appliances solutions Partnership with NVIDIA as a select manufacturing OEM for Introduced 5G cloud on L1# latest Gen AI systems to Heavy adoption of Private core and edge for telecom ₹ 3,024 Mn unlock potential of AI and Cloud in the PSU Banks service providers High-Performance computing Increasing demand for HPC in the Oil & Gas sector Plan to introduce ARM based Order Book servers, using RISC ₹ 3,391 Mn Foray into Europe & Middle architecture, optimized for East – plan to setup service newer AI workloads such as network in 4 countries to LLM start with # Pipeline excludes L1, L1 excludes Order Book, all figures are as on 31.12.23 ARM – Advanced RISC Machines; RISC – Reduced Instruction Set Computer Source: F&S Report Shareholding Pattern (December 2023) Non-Promoter Shareholding Key Institutional Shareholders Goldman Sachs Managed Funds FIIs 26.9% Mutual Funds /AIF Tata Mutual Fund 39.5% Banks & Insurance 0.9% 360 One AIF Body Corporate 2.5% 30.2% Others Total Shareholding Nomura Funds 0.2% The Regents Of The University Of California 0.6% 6.7% 7.4% Eastspring Investments India Fund 9.7% Aditya Birla Sun Life Mutual Fund Promoter Group FIIs ICICI Prudential Life Insurance Mutual Funds / AIF Banks and Insurance BNP Paribas Arbitrage 75.4% Body Corporate Nippon Life India Mutual Fund Others Thank You Chief Financial Officer Investor Relations Advisor Prawal Jain Sanjeev Sancheti Email: prawal.jain@netwebindia.com Email: ir@uirtus.in Website: www.uirtus.in netwebindia.com/ company/netweb-technologies/ twitter.com/netwebtech Agenda About Netweb Technologies 1 Quarterly Key Highlights 2 Key Investment Highlights 3 Growth Drivers 4 Annexure 5 IPO Fund Utilization ₹ in millions Total Un- Amount to be Amount Utilized S. No. Objects of the Issue as per Prospectus Funded from Utilized as on Amount as on Net Proceeds 31.12.2023 31.12.2023 Civil Construction 90.0 17.5 72.5 1 Funding our CAPEX Requirements Purchase of Equipment 232.9 38.5 194.4 2 Funding our long-term Working Capital Requirements 1,280.2 484.1 796.1 3 Repayment or Pre-payment of loans 225.0 225.0 - 4 General corporate purposes 112.2 - 112.2 Total 1,940.2 765.2 1,175.1 Quarterly Key Highlights Cash Conversion Cycle Break-up Particulars Dec’22 Mar’23 Sept’23 Dec’23 Receivable Days 96 94 132 105 Inventory Days 54 52 77 79 Payable Days (90) (88) (101) (108) Cash Conversion Cycle 60 58 108 77 Note: Dec ’22, Sep’23 & Dect‘23 are Annualized. Inhouse Design & Manufacturing Capabilities End-to-End Designing & Production of Make-in-India Server