Black Box (NSE:BBOX) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Q1 FY 'twenty seven Earnings Conference Call of Black Box Limited. This conference call may contain forward looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements do not guarantee the future performance of the company and may involve risks and uncertainties that are difficult to predict. 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. Please note that this conference is being recorded.

0:48 I now hand the conference over to Mr. Sanjeev Verma, hold time director and CEO of Black Box Limited. Thank you, and over to you, sir. Good morning, everyone, and thank you for joining us today. On behalf of Black Box Limited, I extend a warm welcome to all of you to our Q1 FY twenty twenty seven earnings conference call. I'll begin by sharing an overview of our business performance, the evolving industry landscape and the strategic progress we have made during the quarter, after which our CFO, Mr. Deepak Bansal will take you through the financial highlights in greater detail. A couple of months ago, during our Capital Markets Day, we shared an important milestone in Black Box journey.

1:41 We spoke about how the transformation that we embarked upon over the last several years had largely been completed and that the next phase of our journey will be centered around growth, scale and disciplined execution. As I reflect on the first quarter of FY twenty twenty seven, I'm pleased to say that we have made a strong start on both fronts, financially and operationally, reinforcing our confidence in the road ahead. Financially, we have delivered our highest ever quarterly revenue, supported by improved execution of the rising order backlog and the contribution from our recently acquired Brazilian entity 2S.

2:28 The quarter also saw our order bookings of US339 million dollars taking our order backlog to a record of approximately US950 million dollars up 83% year on year and providing strong visibility for future growth. Equally important, we made significant operational progress during the quarter, adding a new global hyperscaler in The United States through US131 million dollars or twelve forty cross order, while continuing to deepen our relationship with our existing hyperscalers. These wins are a strong validation of the capabilities and scale we have built.

3:17 I'm proud to say that Black Box is the only India origin digital infrastructure solutions company currently executing gigawatt scale data center programs demonstrating the scale of capabilities it has built to participate in accelerating global AI infrastructure build out. To understand in detail why we are increasingly confident about our long term outlook, it is also useful to step back and look at the broader technology landscape because what we are witnessing today is far bigger than a normal technology cycle. We are in the midst of one of the largest digital infrastructure investment cycles in history. This is not a short term trend driven by single technology, rather it is structural transformation powered by artificial intelligence, cloud computing, networking, cybersecurity and next generation digital infrastructure that is expected to reshape industries and economies over the coming decade.

4:22 Industry estimates continue to move higher according to Gartner's article published in July. Global enterprise technology spending is expected to exceed dollars US6.4 up 14.2% year on year, including $822,000,000,000 on data center systems alone, a whopping increase of 62.5% year on year. At the same time, leading hyperscalers, including Google, had increased its budget to US190 dollars to US205 billion dollars for FY26 in its current earnings release in July, double from last year and so have other large players follow suit. Within this landscape, Black Box participates across nearly US250 billion to US300 billion dollars of addressable opportunities spanning data centers, enterprise networking, connectivity infrastructure, cyber security, managed services, digital workplace solutions.

5:25 Importantly, the majority of this spending is occurring in markets where we already have strong positions, particularly in The United States where nearly 60% to 70% of spending is targeted. What makes this investment cycle particularly compelling is the convergence of multiple long term technology trends. AI workloads are driving unprecedented demand for compute capacity, enterprise networks are being modernized through high speed connectivity, edge computing, private five gs, Wi Fi seven. At the same time, cybersecurity has become increasingly mission critical as organizations strengthen digital resilience. These trends are creating sustained demand across the very capabilities that Black Box has been building over many years.

6:18 Today, Box participates across a sizable addressable market spanning data center, enterprise networking, connected buildings, cyber security, managed services and digital workplace solutions. More importantly, a significant portion of this investment is taking place in markets where we already have deep customer relationship, particularly in The United States where we continue to maintain a strong presence. However, the size of the opportunity alone is not enough. Success in this market increasingly depends on the ability to execute at scale. And hyperscale projects become larger and more complex, customers increasingly prioritize execution capability, scale experience and the ability to mobilize skilled resources quickly across multiple locations.

7:10 Winning these engagements is no longer simply about offering at lowest price. It's about demonstrating consistent execution on mission critical infrastructure. This is precisely where Black Box enjoys a meaningful competitive advantage. Over the past several years, we have deliberately invested in strengthening our execution capabilities, expanding our leadership team and building a global delivery platform that can support large scale infrastructure programs. We continue to hire and train talent at scale with plans to onboard nearly 2,000 professionals ensuring that we have the resources required to support our customers' long term growth plans. These investments create significant barriers to entry and position us favorably as customers increasingly consolidate spending with trusted partners capable of delivering at scale.

8:03 Equally important is the strength of the customer relationship we have built over the years. We work with leading hyperscalers, Fortune 500 enterprises, financial institutions, healthcare organizations, manufacturers, global technology companies across more than 35 countries. Over the years, we have built and become deeply embedded within many of the existing critical environments, and we believe this trust creates significant opportunity to expand wallet share as customers increase investments in AI led infrastructure. Alongside strengthening customer relationships, we have also continued to improve the quality of our own business. With the past few quarters, we have consciously rationalized several low value long tail customer accounts while increasing our focus on larger strategic enterprise.

8:52 This approach significantly improves the quality, visibility and profitability of our revenue base over the long term. Our objective is clear, go deeper with strategic customers rather than simply becoming broader across smaller accounts. The strategy is already translating into increasing business momentum, particularly in one of our most important growth areas. The momentum in our data center business continues to remain particularly encouraging. We continue to see healthy customer demand across AI campuses, hyperscale infrastructure, enterprise modernization, networking and managed services. Encouragingly, supply chain conditions have also improved over the last quarter, particularly across cables and fiber supporting faster project execution and a stronger pace of backlog conversion going forward.

9:43 Taken together, these developments reinforce our confidence in the long term roadmap that we have shared during our Capital Markets Day. As we highlighted during our Capital Markets Day, our aspiration is to build Black Box into an INR18000 crore or US2 billion dollars revenue company by FY30. Around INR12000 crores of this growth is expected to come organically supported by strong execution conversion of our robust order backlog, sustained demand for AI led digital infrastructure, deeper engagement with strategic customers and improved project integration. The balance INR6000 crores is expected to come through inorganic growth, leveraging our proven M and A engine, successful integration track record and a healthy acquisition pipeline. The recently completed Brazil acquisition, which adds approximately US50 million dollars in annual revenue represents another meaningful step towards this objective.

10:41 This ambition is supported by four growth pillars, hyperscale digital infrastructure, GSI Americas, growth across India and rest of the world markets and evolution of our technology product solutions business towards recurring and platform led revenues. These pillars are reinforced by a strong execution excellence. Overall, the first quarter has further strengthened our conviction that we are well positioned to execute on this roadmap. We believe FY twenty twenty seven is not the beginning of our journey, it is the beginning of the scaling phase of our journey. We ended this year with a stronger business, a healthier balance sheet, expanding customer relationships and multiple long term growth drivers working in our favor. With that, let me now hand over the call to Deepak, who will take you through the financial performance in greater detail. Thank you.

11:36 Thank you, Sanjeev, and good morning, everyone. Sanjeev has shared our strategic progress and the strong industry fundamentals supporting our business and the tailwind what we have right now. Let me now take you through our financial performance for the first quarter, the operational progress we continue to make and our outlook for the year ahead. Over the last three years, our focus has been on building a business that can scale profitably and sustainably. Our transformation has centered around five priorities, strengthening the balance sheet, improving profitability, disciplined capital allocation, simplifying operations, and building a scalable operating model. Today, the quality of our business is fundamentally stronger, providing us with a solid platform to capitalize on the opportunities ahead.

12:31 A key outcome of this transformation has been the improvement in our customer portfolio. As Sanjeev highlighted, we have transitioned from a fragmented customer base to approximately 300 strategic accounts, including hyperscalers, enabling greater wallet share, stronger revenue visibility and healthier margins. This has significantly improved both the quality and predictability of our revenues while positioning us to execute larger multiyear engagements. Against this backdrop, we have started FY twenty twenty seven on a particularly strong financial footing. Quarter one of FY twenty twenty seven was one of our strongest quarters as we reported highest ever revenue of INR $17.19 crores, representing a 24% year on year growth. EBITDA increased to INR 160 crores, up 38% year on year, while profit after tax grew to INR 56 crores, an increase of 18% over the corresponding quarter last year. The quarter also includes two months of financial consolidation from our Brazil acquisition to us.

13:47 Equally encouraging was the improvement in profitability. EBITDA margin expanded by 90 basis points to 9.3%, reflecting operating leverage, a better business mix, disciplined execution, and the benefits of the structural initiatives implemented over the last few years. While we continue to invest in our sales organization, engineering capabilities and delivery teams, operational efficiencies through our global capability center in Bengaluru, AI led productivity initiatives, centralized delivery, procurement discipline and stronger project controls continue to support margin improvement. Our medium term objective remains to consistently operate at or above a 10% EBITDA margin while maintaining healthy returns on capital.

14:42 The healthy demand environment that Sanjeev spoke about also continues to translate into a robust order pipeline. Demand across our core businesses also remains healthy. We continue to see strong customer spending across AI led digital infrastructure, data centers, enterprise networking, managed services and cyber security, giving us confidence in the sustainability of our growth pipeline. From an order book perspective, we continue to witness healthy customer demand. During the quarter, we secured orders worth US339 million Our backlog continues to reflect the progress we have made. Since the beginning of our transformation journey, it has increased by 83% to over US950 million at the end of quarter one of FY twenty seven with a growing share of large multiyear and mission critical infrastructure programs.

15:45 The tenure of our data center engagements now ranges between twenty four and thirty six months, providing strong revenue visibility and improving the predictability of our business. While the industry opportunity is significant, our focus remains on converting that opportunity into profitable growth, healthy margins, strong cash generation and long term shareholder value. Cash flow continues to remain a key management priority. For FY twenty twenty seven, we expect our operating cash flow to EBITDA conversion to improve meaningfully over FY 2026, supported by disciplined working capital management. Our capital allocation philosophy also remains unchanged and continues to focus on long term value creation. We will continue to invest across three priorities, strengthening our people and technology capabilities, supporting the working capital requirements of our growing business and pursuing selective acquisitions that enhance our capabilities and geographic reach.

16:55 The acquisition of 2S reflects this disciplined approach. In addition to strengthening our presence in Brazil, it expands our capabilities across networking, cybersecurity, and managed services while providing platform to participate in the broader Latin American opportunity. As with every acquisition, our focus remains on disciplined integration and realizing long term synergies. Based on the visibility we have today, we remain confident in our outlook for FY 2027. Our guidance for FY 2027 is as follows. Order backlog, we should end on 03/31/2027 at US dollar $1,400,000,000 to $1,500,000,000, which is a growth of 65% to 75%.

17:48 Order bookings in the year, we should do between 1.3 to $1,400,000,000, which is again a growth between 45 to 50%. Revenue, we should do between 7,800 to 8,000 crore, which is a growth of 23 to 27%. EBITDA, we should do between INR 700 crores to INR $7.25 crores, which is a growth of 27% to 32%. EBITDA margins will range between 9.3% to 9.4%, which is again up by around 30 to 40 basis points. Profit after tax, we are expecting between INR $3.25 crores to $3.50 crores, a growth of 38% to 50%. Historically, quarter one has been a relatively softer quarter for Black Box. We expect stronger revenue conversion and operating leverage in the second half of the fiscal year with this momentum supporting the delivery of the FY twenty twenty seven guidance outlined in our presentation.

18:49 Assuming normal execution time lines and no significant customer lag delays, we believe this guidance is achievable. Going forward, we will continue to prioritize profitable growth, disciplined capital allocation, operational excellence and balance sheet strength, supported by a healthy order backlog, improving customer quality and favorable industry tailwinds. We remain confident in our growth outlook. Black Box enters this next phase with a stronger financial foundation, a disciplined operating model and a clear road map towards our aspiration of building a US dollar US dollar $2,000,000,000 business by FY thirty while creating a long term shareholder value.

19:40 Thank you. And with that, I would now like to hand the call back to the operator to open the floor for questions. Thank you. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch tone 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. The first question comes from the line of Deep Shah with three sixty one Capital.

20:27 Please go ahead. Yes. Hi. Thanks for the opportunity. And Sanjeev and Deepak, rates of numbers. A couple of bookkeeping questions first. If you could highlight the organic revenue growth given that 2S was there from May 1, that is one. Second, so I appreciate the comment that you made on in your opening remarks about cash flow improvement. Now you also explained in the past as to the accelerated investment that we have to make leading to a benign cash flow related to EBITDA. So if you give some more color as to maybe a ballpark figure where you expect this to be or the causes why you expect this to improve given the order backlog suggests that we will actually have to make a lot more investment this year.

21:18 And and is that assessment correct? So that's second. Third, if I look at our order backlog and say for a moment, exclude projects, which would be longer term in nature, I still see a 38% kind of increase in our order backlog if I look at managed services, maintenance contracts and products, which is of course very small. So my question here really is that do you think you are being slightly conservative when you guide on 27 numbers? Or is it that you're expecting a lot of growth to maybe starting 3Q and 4Q and which is where the numbers will flow in 'twenty eight? These are my questions. Okay. So I will start taking one by one. So the organic revenue, so out of the total INR $17.19 crores of revenue we have done for this year, the inorganic, which is that 2S has contributed around INR 60 crores of revenue. So all the balance revenues are inorganic sorry, are all organic revenues.

22:21 So INR 60 crores came from the two West Brazil acquisition because it was like a two months and first quarter of them, which is basically the June quarter is normally weak for them because they are into a networking the and the Cisco partners and all those things. So they contributed 60 crores. On the cash flow side of it, so so when... So one is one is that that I'm talking about the operating cash flow. When I'm saying operating cash flow is basically that there will be involvement in the working capital and all those stuff. But from an investment perspective, our investment in the talent, our investment in the people and all those things to secure these type of order book and to increase to increase to convert the pipeline into orders and to hiring the, let's say, the best world class people and all those things, that is largely the... We will continue to obviously hire more people and all those things. But right now, it looks like that that from operations, our cash flow will be positive.

23:25 And and then and then the cycle of the cash flows will automatically pick up with the growth what we are looking at in this year. On on the on the, let's say, the order backlog side of it, you are absolutely right, Deep, is that that most of the growth is coming up with all the execution of these projects by by, let's say, end of the quarter three and quarter four, and it will spill into the next year. So that will that will go... Let's say, the growth will will spill into FY twenty eight with the order backlog what we have. Because because a lot of execution is also dependent on the customer. We have received... Like, let's say let's say this order what we have announced, we have received that order from another hyperscaler.

24:12 Now that order, we were we were talking... We are talking since so many days, and the the real... The work on the ground, the hiring and all those things will start, but the work on the ground will start only from November onwards. So so from... And and that... And then again, it will scale up. So it is not like that that you receive the order and you start working tomorrow because because these are not smaller orders, smaller contracts. They are large sites. They are are gigawatt plus sites. They are not like a smaller site. So there is a lot of deployment and all those things which happens on that. So because of that, the growth will be growth when we will project about FY '28, you will see that that there will be a growth over the current year. So let's say current year, if we grow between 22 to 25% or let's say twenty twenty five around, let's say, 25%, then then the next year growth of FY twenty eight will be over and above those numbers. And that is why it doesn't look like very, very conservative to us in terms of the numbers what we are projecting at between seven thousand eight hundred to eight thousand crores.

25:28 Yes. This is right here. So actually, you've answered my follow-up question to the extent that you just clearly suggested that the reason this year numbers aren't conservative is that some of the order backlog or rather a large quarter of order backlog will actually flow in '28. Is that a headwind correct? I'm just asking for absolute... Correct. Correct. Correct. That is correct. And that is why when you see our order backlog when we have given a guidance for order backlog, that is we are saying 1,300,000,000 to $1,400,000,000 and that is why we will end up with that order backlog. I may say and probably Sanjeev will add more on that. The order backlog may be a little bit conservative because we will add more orders between, let's say, November, October to March, when we will burn these orders what we are getting right now out of the nine fifty. So probably that number may be higher and then we will... I think we will be having a full clarity after the... After when we announced the quarter two results, and then we will see that how we can have a more clarity and more speaking on that.

26:35 Great, Deepak. Thank you so much and all the best. Thank you. The next question comes from the line of Vivek Choraria, an individual investor. Please go ahead. Yeah. Hi, Sanjeev and Deepa. Nice to chat with Hi, Vivek. Hi. I just wanted to touch on the non data center part of the business because most of the growth that we are talking is coming from that piece. Is the non data center piece sort of just trading along, or are we expecting growth? Or is it a case that we're classifying some orders as a data center? I I just wanted some clarity on that. Yeah. No. I'll take that. No. So... Yeah. So so clearly, the hyperscale cycle is larger at this time.

27:22 The non hyperscale enterprise will grow at modest double digit 10% odd. Combining, we are putting at 25% odd at this time. The cycle for the enterprise vehicle follow. The data center infrastructure is not being built to be consumed on its own. The impact of the data center infrastructure would come through a lag when the infrastructure will start to dramatically change downstream airport infrastructure, hospital infrastructure, bank infrastructure. So this is being made for them. This infrastructure is being made for what? Being made for drive efficiency, experience for end users like you and me and our workplaces, right? So we're expecting, we're beefing up, seeing large scale projects also coming through in our infrastructure on the enterprise side. For example, when we do data center infrastructure for a bank, that's our bank business. That is not a hyperscale gigawatt. That's 10 megawatts, 20 megawatts. Still large, many years ago, it was two megawatts. So it will have that. The entire network infrastructure to connect will change. A case in point, just to give you an example so that you'll understand, if the heading changes, if you were to see a four k HD video, you need a device downstream that will support that. So if the heading changes, which is

28:54 in this case is a massive infrastructure for data center, the consumption actually, the inference is happening at the end user, passing through an airport, getting into a hospital, going to a consumer store, ordering food, it is coming, right. So we are bullish on that as well, but it comes to a lag. So standard double digit growth in that side, maybe 10%. We are focused on 300 customers as have called out, but we are catching the hyper cycle on the AI build out And we expect that the move forward that we will see our momentum on the enterprise also catch up with the lag. Sanjeev, just a word on the TPS business. I mean, our growth, I mean, our revenues have jumped up so have the EBIT losses.

29:41 Is it a matter of scale after a point at which we'll start delivering positive numbers? So product business also, we expect in the current year to be able to grow in the range of 20 odd percent as a matter of scale. We are again narrowed down our focus on only using critical infrastructure in that space. We are doing a lot of products. We inherited through historical. So we are now focusing on these various products, which we call KVM, RML product. And we are seeing strong momentum. We will see through in the coming quarters the spike in that as well. We're investing in next generation AI led products in that space. So yes, we are to that extent, I expect the growth this year catching up ballpark around 20% range, still lagging our overall growth plans, but highly accretive.

30:37 But as we move from there, every dollar that comes in as we move into next year and year beyond will become accretive overall. Just one last question, Sanjeev. I mean, the growth that we are projecting our Q2, I mean, the ask for the H2 will be almost at a 30% to 40% growth year on year and even quarter on quarter. Are we confident? Because we've been talking about some delays in execution. I mean, what gives us the confidence that Q3, Q4, we should start differently? I mean, that's So no delays. So no delays on execution from that perspective. Enough backlog coming at the opening of quarter one to push through to push us through if you calculate the order backlog plus the booking goal and the revenue projections, the math will work out. So we're expecting to grow each quarter sequentially year on year going forward. Okay. All right. Thank you. Thank you.

31:33 The next question comes from the line of Nandan Arikat with GM Financial Limited. Please go ahead. Yeah. Hi, team. Congrats on a great set of Hello? Am I audible? Yes. Yeah. Congrats team on a great set of numbers. So my question is on margins. We expect to end the year at 10% EBITDA margin, and I think we have given a guidance of 9.3% to 9.4%. So does that mean maybe Q2, Q3, we'll see slightly depressed margins and then we expect the operating leverage to kick in? And also just a thought on what will be the gross margins you're building in for the data center orders?

32:26 So I'll take that. So I think yes, I think goal remains 10% and over, that's what Deepak called out. So as you look at the overall year, we expect that as we move forward Q4 to be in that range or more. But we also continuously are looking at as we scale this business up in the current year with order backlog. We are looking to invest in talent and training. We're getting into a very large scale build out of multibillion dollar backlogs. This project executions also require some investments in training. So we are being cautious on that. But having said that, at scale, we expect that we should be able to deliver at 10 or more. I think it's better to factor in what we are planning to invest and therefore guiding Deepak has guided at about 9.4%, 9.5% at this time.

33:22 But I think we'll even focus on that to get to 10%, that's in more than 10%. Got it. So that's clear. Okay. On the order backlog, so currently, I think the blended average, we are we have indicated around eighteen months. So based on your the pipeline and what will get executed and what do you see coming in the next two quarters? Do you expect like the average tenure would be by the end of this year? So the tenure for last year projects, Deepa will be raised about 2436%. I had told earlier, the goal for this year for order booking and that's showing in our current forecast as well and guidance is 50% more than the last year ballpark in the range of one point four billion one point five billion dollars So that's what we are planning to book and we are well on our track to do that or exceed that at this time, right? To earlier point that Deepak said, some of these orders require preplanning from when they start to burn into revenues.

34:25 So yes, we will end up the year after you do the calculation of where we opened up and book and take about INR 8,000 crores, we'll open up a very, very healthy backlog that will possibly cover the growth for next year pretty much from the backlog itself. It will be very, very evident. Yes, from a data center margin perspective, I think it remains accretive for us at this time. As I said, I think we continue to focus on our operating margin for 10%. At scale, we believe it will be equally accretive, if not better. So congrats and all the best. The next question comes from the line of Mohammed Namir with Eco Quantum Solutions.

35:19 Please go ahead. Yeah. Hi. Thank you for the opportunity. I have just one to give you a question about the tax rate. Our tax rate is currently low. And going forward, what will the tax rate? So tax rate currently is lower primarily because of our past operating losses, carryforward operating losses we have in the various geographies. So so it's it's it's tax rate is dependent on the revenue mix on the different geographies and the consumption of the past operating losses in terms of how we consume them. So at least for next, let's say, next for FY 2027 and FY 2028, I am expecting it to be in the range between 10% to 15%.

36:05 And after that, it should regularize to around 20% type of levels. Okay. One more question about the other income part. The other income is negative. Why is it so? Sorry, what is negative? Other income, I think other income is negative. No. It is... It doesn't look negative to me. It is... Wait. Let me look at it. I didn't saw a negative number on the other income. Other income is other income is 4 crores positive.

36:52 I don't know where we are. The next question comes from the line of Vivek Seth, an individual investor. Please go ahead. Hi. Thank you for the opportunity. My query is that yesterday, you received the order for from a hyperscaler AI data center order. So just wanted to know how much of the order is your integrated products, and how much of the part is the service part? No products. 100% services. 100 Okay. Thank you so much. The next question comes from the line of Keshav Baradia with Walford Financial.

37:49 Please go ahead. Hi, sir. Congratulations on a great set of numbers, and thank you for the opportunity. So just one question from my side. Since a lot of our growth plans hinge on the hyperscaler and data center segment, By any chance, if there is some moderation at the hyperscalers end in terms of data center CapEx, does that put us at a risk of order cancellations? Or do our growth plans change in that scenario? Good question. So, I think the overall scale of spend is gigantic. I think the overall spend for the AI infrastructure over the next four years is about 1,600,000,000,000 an average 400,000,000,000 and each time some of the hyperscalers comes out and on the results they add up the capital expenditure.

38:43 So I think we have taken over a very fairly small slice at this time of that from within our addressable market in that that we have, right. So we don't see on our current conversation, the current pipeline on the contrary, we are seeing speed with respect to new projects getting announced at this time. So can something dramatically change? I know I wouldn't be wanting to predict that. But from our current conversation across multiple hyperscale co location customers within a hyperscale and multiple sites, within the hyperscale multiple geos, we are seeing what's happening in India. The advantage, of course, for Black Box is means that we are present with customers not only in one market, but other markets.

39:33 We have not started to harness the markets in India, which we are planning to do. So, I don't see from our perspective, our growth will be getting hampered. Should there be a shift of Hyper A or Hyper B or some sites getting delayed or some sites getting revamped? I think we're talking about a massive spend. And to that extent, I think our goals are well set from that perspective. And as I told earlier, we expect also this hyperscale to start to fire downstream enterprise spend because everything around that place will change, be it the network, be it connectivity and so on and so forth. So we'll possibly get into a cycle of dual engine starting fiscal 'twenty eight and beyond. So this is a structural six cycles in our technology spend just to buy and compute. This is how economies will operate.

40:24 This is about keeping economies ahead. So overall, when we calculate that and where we want to play and what is our goal of going forward of being at $2,000,000,000 I think we're well placed and we are well on track. Great, sir. And just a follow-up to that. So we see a lot of CapEx happening in India as well with the tax holiday and many global hyperscalers also coming here. So have you explored any opportunities here? And as well as is there an opportunity maybe on the semiconductor side because you see a lot of CapEx happening here in Southeast Asia as well? So is that potentially a segment we could tap into in the coming years?

41:11 Yes. That's a good question again. So yes, we keep on evaluating the markets and the spend. Of course, India will go through a hyper investment cycle. We are seeing that as well. But even if we look at the current build out, U. S. Is currently at 67, around that gigawatt of already being commissioned and used going to two thirty three gigawatt. India is going from one to five to six at this time. So naturally from a spend perspective, 70%, 80% is around in The U. S. So we'll continue to remain focused in The U. S. Of scale. We have built a team around those capabilities, but we continue to look at markets and that's the advantage of Black Box. So, that starts to mature, we are in the Europe at this time in conversation.

42:00 We are looking at India's potential as well, clearly interested as much to see where it can add value and be accretive for us from a shareholder perspective. Opportunity, of course, has no meaning until you can create profitable opportunity from that perspective. So, are clearly glued in reformatting ourselves to see what we can do in India and Asia market and so on and so forth. Coming on the semiconductor side, now we are looking at not being a semiconductor manufacturer or builder from a perspective of being a partner in the compute side. From a perspective of the overall stack for technology, we have connectivity, network, compute and storage is a natural extension for us. We continue to do that for enterprise customers. Hyperscale is a little different.

42:46 So, yes, there is an opportunity as a management to be continue to evaluate the adjacencies. It is adjacent to us. It can open up additional addressable spend or TAM for us. So, we are evaluating that, but currently focused on where we see hyper growth and where we are engaged at this time. But clearly from a strategy standpoint, we look at adjacencies and overall continuum of what we can do. So we will evaluate that as well. Great. And just one last question, if I can put in. So sir, what would be potentially a distinctive moat between us and our competitors when it comes to bidding for new orders? And I mean, what is our right to win against the others? And is there a potential risk from IT companies to also provide such a service?

43:39 I just wanted to understand. I know definitely that we have that customer mix since a long time. And but what differentiates us from the other? And how is the competitive intensity in this kind of industry? Yes. So, I think I'll answer it in two, three parts. One, of course, you can grow in from a growth perspective. There are three distinctive ways to grow. One, of course, participating in growth. So you just ride the bus because there's a growth happening. So see whether you can be at that growth level. Second of course you take share because you were to compete and there's only 10% growth and you want to grow at 25% so you have to take somebody else's share. That's the only way to grow. The third, of course, you can acquire, right. So, if you look from up, keeping the acquisition separate, that's our separate goal.

44:33 I think first, let's look at what we can do to participate in growth, right. So, when we talk about $400,000,000,000 worth of spend on that, 10% of that possibly that addressable from that perspective, that's about $40,000,000,000 and we're trying to do about, say, 1,000,000,000 just for argument's sake. I think the idea is to getting considered and have the wherewithal to be able to be considered and bid, right? So, these are not a competing bids that you can quote five percent less and win. That's not how hyperscalers operate. By that logic, anybody can put 10% and want to win that. You have to win because you have capability, able to spend, stay put, train and so on and so forth, right? Those what we have built over the last several years' time and therefore being considered. As we move forward, we believe that our push rate will be reducing and we'll have full rate. So we are now getting invited more than we saw before because we executed several 100 megawatts close to a gigawatt by now, right, to do that. So, I think ability to execute at scale, ability to expand and train, these are the essential factors. This market did not exist three, four, five years ago.

45:51 So therefore, execution of scale for anybody doesn't exist, right? It was largely operated by small mid market players locally, it's a fiber world. So I think from that perspective, the number of players who can operate at scale are limited. The number of people who can customer companies who can operate at scale globally are even more limited. And from a perspective of where we are, we're about person who don't need an Indian company who has the ability to now do this at scale, right? So I think mode is one, mode is scale, mode is capability, mode is the relationship and execution already done. But more importantly, participating there. Now coming to Take Care, I think from that will there be some competition? Of course, you can't be the only one playing, that's not going to happen. But I think we believe the right to win as we move forward, it is evident from our order books. It will even become more evident as we go forward.

46:51 So combination of what we have an opportunity, ability to scale as I told in my earnings call, only opportunity doesn't mean much. We believe we have built a very robust execution capability. It's pretty simple. If you look at construction in general and if you look at Indian market and if you're starting to build a very large construction or a bridge or a dam, only few people are invited to do that, right? And there are possibly 2,000 construction companies in India. Only because you know construction, you won't be constructing a dam. So that's pretty much how it works here, right. So we believe at our scale, ability to execute, our relationship over the last two, three years, our training, I think we are well placed to participate and win this massive once in a lifetime infrastructure cycle. It is like the railroad of 1930s, right?

47:42 So we ought to be there and put our head down and just make sure that we are able to execute better, and we are doing it. Perfect, sir. That's helpful. Congratulations again, and all the best for the future. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for the closing remarks. Thank you, everyone. If you have any further questions, you can reach our Investor Relations at Purves Pare or SGA, our Investor Relations Advisors. Thank you so much. Thank you, sir. Thank you. Ladies and gentlemen, on behalf of Black Box Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.