Netweb Technologies India Ltd. (NSE: NETWEB) Q1 2026 Earnings Call dated Aug. 01, 2025
Corporate Participants:
Unidentified Speaker
Renu Baid
Sanjay Lodha
Navin Lodha
Ankit Kumar Singhal
Hirdey Vikram
Sanjeev Sancheti
Analysts:
Unidentified Participant
CA Garvit Goyal — Analyst
Shubham Agrawal — Analyst
Akshay — Analyst
Anand — Analyst
Vinay Menon — Analyst
Srinivas — Analyst
Sandeep Shah — Analyst
Anuj Kashyap — Analyst
Karthik Soni — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the NetWeb Technologies Q1 FY26 earnings call hosted by ISL Capital Services Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the 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 the conference over to renu Beth from iFil Capital Services Ltd. Thank you. And over to you ma’. Am.
Renu Baid
Thank you. Viren. A warm good afternoon everyone. On behalf of IFL Capital, we like to welcome you to the 1QFY26 earnings conference call of NetSep Technologies India Limited from the management team we have with us, Mr. Sanjay Loda, Chairman and Managing Director Mr. Naveen Lodha, Full Time Director Mr. Ankit Kumbar Singhal, Chief Financial Officer Mr. Riday Vikram, Chief Sales and Marketing Officer and Mr. Sanjeev Sancheti Citrus Advisors LLC, the IR advisor to NetWeb. Without taking much time, I now hand over the call to Mr. Sanjayti. Thereafter Sanjay sir can open with his opening comments. Thank you.
And over to you Mr. Sanjaythi.
Sanjeev Sancheti
Thank you Renu. Good afternoon to all the participants. Before I hand over the call to Mr. Sanjay Lodha for the opening remarks, I would like to draw your attention to the Safe harbor statement in the presentation. I request each one of you to go through that presentation before the Q and A starts so that you are aware of the same. Thank you. And over to you Mr. Noda.
Sanjay Lodha
Thank you Renu and Sanjeev. Good afternoon and warm welcome to all of you to NetFit Technologies Q1 Financial Year 26 earning call. We are pleased to report yet another strong quarter continuing our growth momentum.
Revenue from operations grew by 102% year on year to 301 crore in with our operating EBITDA rising by 127% year on year to 448 million and packed increasing by 100% year on year to 30 crores. The result reflects the strength of our business model, disciplined execution and robust demand across our four segments. Additionally, in the quarter gone by, we successfully executed a large AI order in the critical defence sector. This deployment contributed to key national initiatives reinforcing India’s strategic capabilities and underlying the growing role of AI in safeguarding national interest. India’s AI ecosystem is evolving rapidly fueled by strong enterprise demand, adoption of domain specific LLMs and SLMs and government led initiatives in aimed at building sovereign digital and compute capital.
With integration of AI into digital public infrastructure and rollout of AI mission, the rise of indigenous compute and edge ready genius cases, the nation is entering into a transformative phase. These shift underscores the growth need for trusted high performance system and network is well positioned to support this evolution with a focused approach across three growth pillars High performance computing, Private Cloud and AI systems. AI continues to be a major growth driver this quarter contributing 29% of the operating revenue with a 300% year on year growth highlighting growing enterprise adoption across the sectors. Reinforcing our progress in this space, we launched Skylars AI in Financial Year 25, a unified composable GPU orchestration platform that enables rapid deployment and optimization of AI infrastructure.
Skylars AI strengthens our capabilities in AI systems and contributes to India’s vision for becoming the AI factory of the world. With a strong order book, expanding product portfolio and continued investments in capability building, we remain confident of sustaining our growth trajectory in line with our medium term guidance. I now request Ankit to take you through the financials. Thank you,
Ankit Kumar Singhal
thank you Mr. Lodha. Good afternoon ladies and gentlemen and thank you for joining our earnings call. Before we open the floor for Q and A, I will provide a brief overview of the financial performance for the quarter and the year gone by.
I trust that by now you have had the opportunity to review our earnings presentation and press release. While our CMD has already discussed the macro outlook, I will elaborate on the financial performance providing a more detailed analysis of the quarter. Our operating income increased by 102% on yoy basis reaching rupees 3012 million. In Q1FY26, our operating EBITDA for Q1FY26 increased by 127% reaching rupees four hundred and forty eight million. While the operating EBITDA margin for Q1FY26 was 14.9%. Profit after tax for Q1FY26 grew by 100% yoy reaching rupees 305 million while the PAT margin stood at 10.1%.
Return on equity for the Q1FY26 was 22.4% while return on capital employed for the Same period was 30.6%. Our balance sheet strength is reflected by us being a zero net debt company. The company had net free cash of Rupees 475.2 million as on 30th June. We remain focused on our strategic roadmap and growth priorities with encouraging momentum in the year so far supported By a strong order book and a healthy pipeline, we are well positioned to drive consistent revenue and profit growth in the current fiscal. With this, I now hand over the call to Renu Bhai.
Renu Baid
Yeah. We can now open the session for Q and A.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question, press star and one on the touch one telephone. If you wish to remove yourself from the question queue you may Press Star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have a first question from the line of CA Garvit Goel from Invest Analytics Advisory LLP. Please go ahead. Hi Anna. Audience Yes Mr. Garvit, please go ahead.
CA Garvit Goyal
And congrats for a decent set of numbers. My question is on the margin front margins are pretty decent in this quarter. So what is the ongoing trajectory for next few quarters in the terms of EBITDA margin?
Sanjay Lodha
The margins basically because the guidance from us on the margin is around 14% and basically our guidance will remain the same actually because basically in quarter sometime margins can be little bit up by few basis point up and down. But overall the guidance of the EBITDA will be around 14% and the PAT will be around 10 between 10 10.5%.
CA Garvit Goyal
So in this particular quarter what is driving the significant margin?
Ankit Kumar Singhal
So I’ll explain Garvet. During the quarter the margin performance was benefited by a favorable mix of small size order and a medium sized AI deal which actually led to an uptick above 14%.
CA Garvit Goyal
Got it. And secondly on the AI part, what kind of trajectory do you see now? Because in this particular quarter our growth for India is very high and you mentioned mainly because of the AI. Right. So how do you see AI as a segment going in next couple of quarters considering the kind of we are seeing in terms of LLMs and all.
Sanjay Lodha
Yeah, Garvey actually you know that basically the traction of AI is not not only restricted to India or something that’s all over the world and India is definitely. India has decided to become the factory of the world and basically government is putting a lot of momentum and a lot of impetus is being provided on that. The industry adoption is really heavy. The more the better you adopt to AI, you increase your efficiency. So that is the real situation actually. So basically definitely if you remember, AI used to be 7% of my business. Last year it became 15% of my business.
But I like to guide that AI will be around 20 to 20 to 20 to 22% of my business. So basically my earlier guidance was around 20%. But I’d like to raise that guidance to maybe 22% because you have to understand segments also growing. The three segments which we have are all growth segments today. There are supercomputing, the private cloud and sci. You see how the data center is growing, you see how an SM 2.0 is coming. So other segments also growing though AI is growing at a better rate. So basically still we feel. I would like to commit that.
Basically I’d like to say that by the end of the year it would be around 22% of the total share will be occupied by AI.
CA Garvit Goyal
Got it, sir. And lastly on the guidance part, this year we were having a guidance of around 30 to 35% growth. But this quarter has been really good for us. Would you like to revise the guidance for this year?
Sanjay Lodha
Actually the guidance we have already said that we are not revising the guidance, but it is 35 to 40% which we have been saying will be definitely growing by that basically. And if you see, I think this is the ninth quarterly result I have presented after the listing and you might have seen that we have been consistently growing at that rate actually without failing even in one quarter. So primarily we plan to maintain that.
Navin Lodha
And also I would like to add. Here that we don’t want to get. Into short term evidences. We will guide once a year and. We’Ll follow through on that.
CA Garvit Goyal
That’s it for my title and all the best for the future. Thank you very much. Thank you.
Sanjay Lodha
Thank you.
operator
Thank you. The next question is from the line of Shubha Magarwal from yes, securities. Please go ahead.
Shubham Agrawal
Hey. Hi. Am I Audible?
operator
Yes, Mr. Yes. Please go ahead.
Shubham Agrawal
Hey. Yeah, yeah, yeah. So in AI system and enterprise workstation I can see the growth is almost 600 million rupees year on year. So can you tell me how much is it from private enterprises and how much is it from a space and defense sector?
Sanjay Lodha
Basically the. If we talk about this quarter, so it’s close to like 23 to 24% came from the government and rest were from the enterprise. In AI system and enterprises you are.
Shubham Agrawal
Talking about or is it total systems?
Sanjay Lodha
Correct.
Shubham Agrawal
Okay, okay. And just similarly for private cloud and hyper.
Sanjay Lodha
Come again? We do not get to get your win.
Shubham Agrawal
Yeah.
Sanjay Lodha
Overall overall revenue from the government this quarter was around. I think 60 was from the government and 50% was from enterprise. Overall revenue overall?
Shubham Agrawal
Yeah, yeah, yeah, I got IT. So in AI system and enterprise growth, so 20 was from government and rest was from Enterprise. That’s what he told. Similarly how much would be from government.
Sanjay Lodha
And I don’t have those numbers. But FCI mostly is Enterprise and hpc. This is the government share is more Overall I can. I can tell you that in the total Turnover Basically of 300 crores, 40% revenue came from enterprise and 60% revenue came from government.
Shubham Agrawal
Okay. Okay. And just one more last question that. Is this government working AI system, is this a repeatable work or is it. A one time order kind of thing?
Sanjay Lodha
Basically most of our because we really don’t work on any kind of business. We work on complete solution deployment. The solution deployment has been done and basically so the projects which were on hand those are definitely been overs that has been built. So it is not repetitive that we don’t do any business. Every order is unique and then we. Get refresh orders in future. So it’s not that the same order will again get repeated. Maybe some other business, some other solution, some other customer, some other solutions.
Shubham Agrawal
Got it? Got it. That’s it. From my side. Best of luck and thank you.
Sanjay Lodha
Thank you.
operator
Thank you. Ladies and gentlemen. In order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to one or two per participant. Should you have a follow up question, we would request you to rejoin the. The next question is from the line of Akshay from AK Investment. Please go ahead.
Akshay
Hello sir. Thanks for giving me the opportunity and congratulations for the great set of numbers. So my first question is about larger AI orders in critical defense sector that we are talking about. Can you put some more light on that how the customer profile or something like this and whether that was a government order or private enterprise order. As you said that we got 23 to 24% from government in AI segment and rest is the private enterprise in Q1. So can you put some more light on that and are there any other projects in pipeline for the subsequent quarter for AI workstation?
Sanjay Lodha
Yeah. So basically to answer a question, primarily we don’t specify the particular order details on our calls because of confidentiality reasons. Okay. So basically we have already mentioned that around 23 the amount of orders which have been from government it was not a single order. It was multiple orders. There was a large order from different side in interest of nation and interest of company secrecy. Also would not like to diverse the details of exactly the dynamics of the order very clearly. And but to answer your question, is there such orders feature in the order book? Definitely.
If you see my order book and you see my basically the L1 kind of a thing which is around 700 crore that would be having good number of AI systems segment order as well. As I have already mentioned to you, I have guided already that the business will be around 20% for the whole year. So we will definitely my funnel, my order pipeline, everything is in that direction.
Akshay
Okay sir. Okay, fair enough. And my second question is about balance. It’s our net current assets have gone up sharply by 48% in Q basis. So what might be the reason? Whether it was inventory or something like.
Ankit Kumar Singhal
Can you come again? You were not that audible.
Akshay
Yeah, hello. Am I audible now sir?
Ankit Kumar Singhal
Yeah, yeah tell me.
Akshay
Sir, our net current assets was 302. Crore in March 25. And it is 445 crore in June 25.
Ankit Kumar Singhal
So it is going up sharply by 48% QoQ basis. So what might be the reason for this one? So it is due to the increase in the receivables. That is the prime reason. And because why it happened because the sales generally happened in the later part of the quarter which led to the increase in receivables. And that’s how. That’s why the net current asset is looking bit higher as compared to March.
Akshay
Okay sir. All right. And the last one sort question is whether our pipeline. Order pipeline includes the India mission orders or some busy.
Sanjay Lodha
No, I have been categorically saying that India mission is not included in my pipeline. Okay sir.
Akshay
Thank you so much and all the. Best for the future. Thank you.
operator
Thank you. The next question is from the line of free new bed from IFL Capital. Please go ahead.
Renu Baid
Yeah. Hi. Thank you for the opportunity sir. So the first question is if you look at the cumulative value of order book and order pipeline for last couple of quarters it has been ranging at just about 700 crores or sub that level. So based on your reading on the order pipeline, how do you see growth coming in the cumulative book for us both L1 as well as order backlog closing position. And if you can also highlight key segments. Where do you see the pipeline building up for the next six months for us? That’s the first question.
Sanjay Lodha
So Venmiji, actually the thing is that our kind of company really the order book is will not be able to give you the visibility of our growth actually because as you know that our order book gets close within 8 to 12 weeks actually. Okay. So basically the real business outlook, basically we are a pipeline driven company and pipeline is 4000 approximately odd crores. So which is a huge number actually. So basically that pipeline has Been growing substantially and that. And you know that around 60% of the convergence ratio we have primarily on the pipeline. And pipeline basically takes around 6 months to 18 months to convert.
So that gives me the very clear confidence that we will keep on growing at 40% CAGR. And if you see the pipeline mix is also somehow basically mixed in the same way. Of the three segments, that is Supercomputing, cloud and AI, we are seeing more opportunities in AI. That’s the reason the AI growth is more than the other two segments. But all the three segments are growing and we, our focus and niche is helping us to concentrate and to build pipeline also accordingly.
Renu Baid
Right, and how about certain large ticket size government projects on the HPC side? How is that part of the business shaping? Are there any material large ticket size projects which could be a couple of billion rupees plus in ticket size?
Sanjay Lodha
Yeah, actually thing is that basically the projects are definitely there. You know that NSM National Supercomputing Mission 2.0 is on the verge of rollout. Okay, so basically so new allocations, new things will be there. Definitely there is a lot of adoption of basically primarily HPC on the enterprise side also. So large ticket side orders are there, but basically even the medium and small ticket side orders and the number of orders have increased quite phenomenally. So basically that is helping us. If you see we are doing HPC for 20 plus years still basically 35% of the total revenue comes from HPC.
So that as you see this, this, this is not a trend which changes quarter by quarter. It will remain around that, only it will be basically 35% is the average kind of a trend. If you see, if you really we have been maintaining that. So basically there is enough demand in the market. The market is growing. You know, HPC adoption is increasing day by day because the compute requirement is phenomenally increasing today. Basically you talk about anything, anything basically needs compute. And you know how compute has been able to basically make our lives more efficient and supercomputing plays a major role in that segment.
So I personally feel supercomputing is an area which will keep on growing. The second area we are into private cloud and sci, which you are aware how today the data center market is going. You guys know better than me how the data centered market is going and how data companies are doing better. So basically I think it’s very difficult even to gauge the total market which is available to us actually at this point of time. So private cloud and SCI has been a great booster for us, AI systems and enterprise. We as I mentioned to you two years back it was around 7% for us.
It became 15% last year. Basically this. But I’m guiding it for somewhere on 20% this year. So basically 20 or maybe I like to revise the guidance to 22% or something of that nature. So that’s how basically all the three segments are really robust and they will keep on growing. We are very, very confident on that.
Renu Baid
Sure. The second question is on the working capital cycle. While 1Q is not the right parameter, but if you see on a Y bas we have been able to reduce it by close to 17 days. So as looking at the order pipeline and projects which we have on books, how should we expect the year end working capital to turn for us?
Ankit Kumar Singhal
So our working capital cycle typically operates around 90, 90 to 100 days. Okay, so again Q1 is just a start of this fiscal year and working capital cycle. Why it’s coming appearing in June is because it’s directly attributable to the robo sales momentum that we achieved in the June quarter. So broadly the entire portion of these sales had sat in our receivables for June. Okay, so that’s the reason that the working capital cycle is appearing like this.
Renu Baid
So my question is for the year end, should we expect this improvement to sustain till March? Broadly we should be at similar levels like last year in terms of cash conversion cycle.
Ankit Kumar Singhal
Actually it is very difficult to predict a cash cycle at the year end. However, we expect that it will range between 80 to 100 days only. That’s how our business nature has been going and the way we had been managing our working capital it will range within 80 to 100. Got it.
Renu Baid
And lastly, I know while none of your order pipeline or order book includes ISM related projects, but in your view by when should we expect these orders to trickle down and both with respect to localization, whereas any incremental capex or broadly, whatever we have done until last year will take care of all the local content requirements.
Sanjay Lodha
Yeah, basically we have done. We have been constantly working in that direction and we are part of the entire. Basically we are trying to see what best inputs we can give to the policy makers also. So we are working towards that. And plus basically none of my order book and pipeline is including of the AI mission as I mentioned to you very clearly. I think basically the momentum will start definitely this year which will continue for a few more years.
Renu Baid
Got it? Sure. Thank you and best wishes. Thank you.
operator
Thank you. The next question is from the line of Anand from SEMA Wealth Private Ltd. Please go ahead.
Anand
Good afternoon. Yes. Yeah. Congratulations. What a great set of numbers. I have two, three questions. One is the contribution from the industry vertical. The growth from Spatial defense has grown nominally from 9 to 83 crores. Around 81% growth. Y and Y. So I’m just asking like basically what will we see a number in the contribution from Spatial defense as the time goes on? Because right now I guess numbers around. 28% of this quarter. So where would you see this number going forward from the contribution of space and defense.
Sanjay Lodha
So basically what happens, sir, is that basically you cannot judge our business primarily from one quarter. Okay. Because basically because this quarter we had a large order from AI on a space and defense that has pushed up the space and defense sector. Actually we share more overall, so. But overall, basically it will remain in the similar lines as we have been showing earlier. Space and defense basically segment will remain on the similar lines actually.
Anand
Okay, okay, okay.
And regarding article, I just want to confirm the exact numbers. What is the current order book that of this quarter and from the previous quarter? Just make clarification on that.
Ankit Kumar Singhal
So we have already covered this in our presentation. So current quarter order book is close to like 230 crore. And our L1 happens to be 460 crore for the quarter.
Sanjay Lodha
So L1 and the order book together will be around 600 odd crores, more than 600 crores . And also every quarter we disclose this. So for the previous quarters you can. Check the interest of time for everybody. Okay.
Anand
Okay. And another last question is since okay. HPC that you know, you guys have been doing it for the last 20 years or so, but you have guys any of any plans getting into the quantum computing real by any chance?
Sanjay Lodha
Yeah, we basically. I will not like to comment at this point of time. We definitely, we are working on some strategy on that. At the right opportune moment we’ll disclose that.
Anand
Okay. So it basically is as a company that you are somewhat working on quantum computing, but you’re working on strategies for that.
Anand
Yes. Shops. Yes. Okay. Okay, that’s one more question.
operator
Thank you. Thank you. The next question is from the line of Vinaymann from Muna Capital. Please go ahead.
Vinay Menon
Thank you. Thank you for the opportunity. Congratulations sir, on a great set of numbers. So a few questions from my side, sir. We launched Skylar AI. So are we seeing any deals where we are able to sell that, you know, product across or is the deal.
Sanjay Lodha
Yeah. So your question is, can it please come again?
Vinay Menon
Yeah, I just wanted to understand that. Are we seeing any deals which bundle Skylar’s AI As a product which is obviously coming.
Sanjay Lodha
We had envisaged this product first of all to cater to the market in such a way that we can create a unified layer for the customers so that they don’t have to hop into, you know, multiple software to manage the AI infrastructure. And that is the reason the acceptance of this product is going on very well. And the recent orders which we have disclosed in the results, so those all are basically having a contribution of Skylash AI as well. And the pipeline, the funnel, we have got excellent funnel and pipeline for Skylars AI. So the acceptance in the market is very high.
I hope you understand. It’s an appliance based product which we are providing to our customers. It’s a combination of hardware and the complete unified layer sitting on top of it. Yes.
Vinay Menon
And so this deal you see announced like in defense for AI systems. Can you just elaborate a bit more about the deal? Like what kind of deal was it, deal size or what kind of work did we do?
Sanjay Lodha
We just mentioned, we responded to a question a little, I think two or three questions back that, you know, seeing the confidentiality and all. So we are unable to disclose those details, especially over call. So sorry about it.
Vinay Menon
Okay. Okay. Yeah. And we’ve had this history of doing one third in the first half and two third in the second. Will that continue or are we seeing some smoothening out because we have more of enterprise deals? Yeah.
Sanjay Lodha
So basically I think seasonality basically is changing. The world is changing. The seasonality is changing basically. Overall, I would like to guide you that basically the growth which I’m saying because you can understand that in today’s world we are presenting the ninth quarterly results and consistently we have shown 40% growth actually quarter after quarter actually clearly. So definitely I think that we will grow that momentum definitely. Because things are not under our control. One quarter or some quarter can be higher, can be lower or something of that nature. Our business is not that kind of.
It’s primarily more of high end enterprise kind of a business. So it’s very difficult to see that.
Vinay Menon
Okay, one last question. AI Mission rfp. We had kind of said that second half of the year we start seeing them start. So any, any kind of tentative date where we can start seeing some dealings from this for us. And will any of it flow in FY26?
Sanjay Lodha
Yeah, actually, because from all my guidance I have kept AI Mission separate actually up till now. Yes. Okay. And, but basically definitely we, we are very sure that some traction will start on AI Mission this year itself.
Vinay Menon
Thank you so much.
operator
Thank you. The Next question is from the line of Srinivas from tia. Please go ahead.
Srinivas
Hi sir, thanks for the opportunity. My question related to the previous participants question about the monetization of the Stylus AI. So what is your roadmap for the next two years on extending the stack to full container level orchestration with Cubytes?
Sanjay Lodha
See this is something which is very clear that when we are offering the complete stack it is a combination of, you know, Cubytes, Skylars AI and there are two more utilities which we provide while offering our solution to the end customers. So as regards monetization, since you asked, you know, how we have a plan to monitor and all. So as I mentioned, you know, just a question back that we are not selling Skylars AI as an independent software or standalone software. We are only providing it in the form of an appliance where you know, we tightly couple the hardware and the software stack.
So answering your question, Skylar AI has been supplied to our customers in the couple format only and we have got no plans to decouple that stack. So our plan is to basically continue with the appliance strategy that is one second is that you mentioned about whether we are planning to integrate it with Cubits and all. So it is already having plugins which allow us to, you know, integrated with the other utilities which we already have and that becomes the, you know, integral part of our solutions for AI as well as for supercomputing. So that way Cuboids and TTS and the other utilities which we have are very well integrated with Skylars AI.
Srinivas
I see, thank you. And is it currently a perpetual license or subscription based?
Sanjay Lodha
Yeah, actually it’s a. It is sold. It’s not a subscription based license, it’s a perpetual license but it’s not a. We don’t sell it as a. We don’t charge the customer for the software. As you know that our model is appliance kind of a thing and basically once we sell a product the software goes along with it actually. Okay, but there is no. So basically it doesn’t stop working after the warranty period is over though the support is stopped actually.
Srinivas
Okay, the reason why I’m asking this question is you currently you are having A and HCI both are firing like anything. One is 8 growing at 300% the other one is growing at 71%. So since Skylars data AI is embedded in both of these. So I’m just trying to understand whether the margin levers are there in going forward.
Sanjay Lodha
So margins actually if you can understand, we have pricing power and basically the margins we will remain at the rate. We are always guiding that the margin around 14% because basically we want to show the value for money to our customers. If you see my customers also if you see the government side, they are all basically large government R and D and large enterprises actually. And as regards enterprises are concerned, they are all basically large Indian companies. So we are not present with the SMB and all those areas. So we want to show value for money to our customers.
So basically and we are very comfortable working at around 14%. So basically we are not guiding also higher margins. Definitely AI or something. We can definitely charge more money. But basically that that is helping us to increase our market share to help a deeper penetration. Plus basically someone is an HCI customer today. But it basically they once they’re looking for AI, they definitely look, look at us. So those kind of benefits which we get. So that is basically that is a strategy. Our strategy is not to just increase margins.
Srinivas
Understood sir. So with the current.
operator
I would request you to please rejoin the queue as there are several participants waiting in the queue.
Srinivas
There’s a follow up question sir. Actually sir, with current H100 H200 spot prices are falling. Do you see that is going to impact the margins?
Sanjay Lodha
H100 H200. Basically you know that the first thing is that the GPU pricing really doesn’t go down for Nvidia. You may be having some other information but basically what happens is that once a new GPU is available people start buying the new GPU like basically today same thing as it happens for Apple iPhones. Maybe once Apple iPhone 16 will come in, you’ll definitely like to go for 16, you will not like to go for 15. So it’s the same. And basically here that may be for consumer but in case of production you get better performance. So people are shifting to B2 hundreds and all those kind of blackmail actually.
So I don’t think that because there is hardly any H100 H200 available these days, getting itself is a problem. So basically falling prices is not really any concern at all.
Srinivas
Thank you sir.
operator
Thank you. The next question is from the line of Sandeep Shah from Eklavya Capital. Please go ahead.
Unidentified Speaker
We know you Sandeep Ji. We know you. Whatever name they say, we know you very well.
Sandeep Shah
Sir. Congrats once again for a very great execution and a quarter both on margin as well as revenues. Just the question in terms of the supercomputer, whether the supercomputer segment has diversified set of industry or still it is largely concentrated in the government segment, any new verticals being added in the supercomputer?
Sanjay Lodha
So basically Sandeep Ji, if you ask me, still the dependence of the segment is on the government, but there is a lot of adoption which is happening on the enterprise side of it. One is, as I mentioned to you, oil and gas, even consumer durables company also like Dabur is also using supercomputing now. So basically Autobio is using it, oil and gas is using it. So a lot of different kind of industry verticals and domains are using supercomputers. But if you ask me, frankly, still, I think more than 70, 75% of that segment is still dependent on the government actually.
And basically it is looking buoyant because NSM 2.0 is just about to be launched. NSM 1point National Supercomputing Mission was there earlier. But national supercomputation is the computing mission government is focusing upon. And 2.0 should be soon launched. So that will be a great demand booster.
Sandeep Shah
Okay. Okay, thanks. And just on the export side, any vision, any target, can you share in next two to three years or five years where you want, which country and what contribution it may derive in the next three to five years?
Sanjay Lodha
Yeah. So Sandeep Ji, last quarter, if you, last year, if you see our exports was around 5 to 6%. Okay? And basically this quarter it was low. But basically it’s very difficult to do it quarter basis. But on a year basis we like to predict around 5 to 6% of export because I’ll tell you, we are seeing a huge domestic demand. Okay? So basically the first target is to settle the domestic demand. And so I personally feel over a period of next two to three years, exports would be around 10% of the total turnover. But I don’t see it going beyond that because the focus, because domestic demand is predicted to be very high in all the three growth segments which we are working upon.
Sandeep Shah
Okay, okay. And this on the last question on AI mission, you said some growth momentum may start in this financial year. So you expect it may be a part of the pipeline and the deal wins in the coming quarters. And second, in terms of private side AI adoption, is it you believe the domestic player, especially on the enterprise side, has started ramping up in terms of creating AI and LLM LED infrastructure?
Sanjay Lodha
Yeah, basically that is very true because basically AI is, AI is everywhere. If you really see, if you really see almost all the enterprises everywhere, if you really see, you talk about any large enterprise, everybody is talking about AI infrastructure these days. They all want to have their infrastructure they are all they have, even the last large ITS companies. They want to develop their stack so that they can service all their customers even India or abroad. So basically even on the LLM side of it, people are getting funding because of. Because of they are trying to work on primarily newer AI models and all.
So definitely we are seeing lot of traction around it. And definitely that will give momentum to the demand.
Sandeep Shah
And the question on the AI led mission of the government. We believe it could be a part of pipeline and order event in the coming quarter.
Sanjay Lodha
Possible. I can say that up till now it is not included. But once as we see more light actually we may start sharing that.
Sandeep Shah
Oh, thanks. And all the best. Thank you.
operator
Thank you. The next question is from the line of Anushka from A3 capital. Please go ahead.
Anuj Kashyap
Hello, good afternoon.
Sanjay Lodha
Good afternoon.
Anuj Kashyap
Congratulations for virat coding type of consistency. Thank you. Half of my question has been answered. Just I wanted to know is that annually what a type of R and D expenditure we are doing and what are the avenues we are looking at while we are doing R and D kind of expenditure.
Sanjay Lodha
Actually in our kind of business, R and D is very important. Sir. Actually really speaking, the company today has really progressed so well because of its investments into the R and D. And basically so R and D spend, as I have always been saying that we keep R and D budget of around 3% of our turnover very clearly. And that has been your policy from the very beginning. And we keep on doing it. And since our basically our base is growing, we are having more money to spend on RD. So R& D basically, primarily the software side, the R and D team is around 75 people.
On the hardware side we have around 22 people. These are very focused because so many we have. Please understand we are working on the latest designs. Actually whichever is being launched in the world, the same product is being manufactured and designed and manufactured in India. So definitely we have to invest quite a lot into R and D. So R D is our main focus. And plus basically as you know that we are into niche segments. We don’t get into everything. So basically we focus on all the three domains and the new products on the new lines which basically we need.
And both on the software and hardware side we do R D expense continuously.
Anuj Kashyap
That’s good, sir. What I want to know is like you said, 3% of the annual turnover we do in R and D. Like what is more remunerative to us whether it is software side or the hardware side.
Sanjay Lodha
Like both is a combination. Both is a combination. Actually both is A combination. Because you know that we don’t sell our software separately and we are able to. Because today if you are able to take 40, 14 EBITDA margin, whereas my competition is all on single digit margin. That is because of my R D. I personally feel so.
Anuj Kashyap
Yes. So that is a strength. Yeah. Yeah. Yes. So thank you, sir. Best of luck, sir. Again, thank you. Thank you.
operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to one or two per participant. The next question is from the line of Karthik Soni from Sony and Associates. Please go ahead. Please go ahead.
Karthik Soni
[Foreign Speech] June quarter week up 100% to the growth. March, May, March government. So March becomes favorable and March will always be the heaviest or basically. Basically to compute we not like to say anything. We are participating or not participating because it’s still a new project to be just elementary stage. It may be, it may not. My question is basically if he wants a private cloud, definitely that may create an opportunity for us which is good for India. Actually really speaking whether good for network or not, I really don’t know. Thank you.
Sanjay Lodha
All the best.[Foreign Speech]
operator
Thank you. That was the last question for the day. I now hand the conference over to Renu Bek from IFL securities limited over to you, ma’. Am.
Renu Baid
Thank you. Direen. I would like to thank the management of Netsep for giving us the opportunity to host this call. Sanjay, any closing remarks from your side?
Sanjay Lodha
Thank you so much. It was really. I would like to thank IFL for hosting this call for us. It was a good quarter for us. We expect that the same support which investors have shown on us that will keep on. They will continue ensuring their blessings on us.
operator
Thank you so much on behalf of IFL Capital Services limited that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you. It.