A Strong Q4FY26 For Black Box | Expect Operating Cash Flow To Start Improving In FY27, Says Company

Added: 2026-05-27

[00:00:11]Welcome back. You're watching us here on Chadbusters uh on CNBC TV18. It is earnings thick and fast. The other stock is Blackbox on our radar. The stock has surged over 8 70% in the last one month alone. They reported their fourth quarter numbers yesterday. Revenue grew about 9%. Audit inflow too spiked. We do have Sanjiv VMA who's the CEO at the company joining us uh in the studios for the quarter gone by. It's a big jump that we've seen 9 and a half% here on air. Um just wanted to understand a couple of things. You know your aida margins quarteron quarter saw an improvement to around 9.3% and you did mention the last time you joined us that a lot of your orders moved into FI27 because of the geopolitical tensions that we are facing. Uh do those tensions still I mean the tensions still continue? Do those delays still continue or have you gotten those orders?

[00:00:56]>> Yeah, so two aspect. One of course the delays were largely because of some supply chain constraints which is the raw materials like fiber and others which has caught the cycle right now and of course more recently of course some geopolitical tension but I believe we are over the cycle from a supply chain perspective for the geopolitical tension continues to be there but we not affected by that as much as our North America business concerned. So basically we are over it at this time from a supply chain perspective. What's your FI27 revenue growth guidance? Your exit quarter was about 9 and a half%.

[00:01:26]>> Yeah, so I think we have gone public saying we are current uh operating margin guidance is about 10%. So we surely are focusing on getting there in fiscal 27. We are not guided quantitative guidance yet but I think if you look at our order book at this time uh coming at the highest of $800 million opening backlog we booked about a billion dollar expected to dramatically grow booking this year. We can expect a significant revenue growth in the coming year. Now what would significant be sir because you've got some inorganic growth as well. I remember the Brazilian company that you went ahead and picked up and you're guiding that closure on 500 crores will be accounted from there.

[00:01:58]Correct.

[00:01:58]>> You know there'll be some organic growth as well. So ballpark should we be working with a mid- teen growth including this 500 crores or will it be even better than that? Should it be high teen?

[00:02:08]>> It should be high teens.

[00:02:09]>> High teens. High teens.

[00:02:10]>> Could it be 20%.

[00:02:10]>> It should be 20%. Yes.

[00:02:12]>> 20% could be the revenue growth with margins holding around 10%.

[00:02:15]>> 10%.

[00:02:16]>> Got it. And you mentioned about the order inflows. Uh you know there were a couple of data center opportunities I think that you were talking about. Uh when do we see this see the light of day finalization of these orders? So we have for this year as I said we have a very robust order book of a billion dollar opening backlog very very strong. Uh we also have cracked into a new hypers scale. We expect our quarter one momentum to continue. So we'll see some coming in quarter one and some coming through the course of the year. We expect our order book for the year 2027 to be significantly higher than what we did in fiscal 26.

[00:02:49]>> Define significant again because you know we're uh we want to quantify the adjectives >> 50% or more.

[00:02:54]>> 50% or more. Okay. All right. U you you also mentioned about a strategic breakthrough with a new global hyperscaler. Could you give us an inkling of who that hyperscaler would be and given the sort of infrastructure race that is taking place for uh digital do you foresee that coming more into your outbook as the years progress?

[00:03:12]Yeah, I think I called out about 50% or more from audible book perspective.

[00:03:15]There are only four or five hyperscalers. We serve all of them, but I think we are substantially gaining ground with one largely in the healthcare space out there. So, we'll announce it when we get there. So, I think net net >> we hear that >> next quarter.

[00:03:28]>> Okay.

[00:03:30]>> Okay. All right. Uh what about any other challenges for the business? Uh you know the globe is in a bit of a flux right now. uh challenges you are observing on the supply side uh or any other uh challenges >> I think this the issue has been infrastructure issue has been more fiber networks power I think uh in some markets the it'll continue to have some I think the projects are delayed in Europe for that matter and many countries don't have power >> right >> uh you know so I think cyclically from our perspective presence in 35 countries so when we have North America we are currently working for something in Europe we are focused on India as well which has just announced some mega project so I think we are hedged intrinsically because you're present across five continents primarily of course North America where we're not seeing challenge but of course we're seeing some good momentum in Europe and Asia Pacific as well going forward so that gives us a strong uh confidence with respect to what growth we see from booking and revenue coming up in 27 >> right you know I'm I'm looking at your cash from operations in uh March 2025 it's negative and uh a large part of the cash balancing act has been done using cash flow from financing activity So uh what explains that and what's the kind of cash generation that we can see going forward?

[00:04:39]>> So I think uh we can see a decent cash generation going forward. If you look at from our timing perspective the last quarter specifically some projects getting late. So we had a heavy quarter with respect to our March and you see that in our U AR being high at this time. We also did a very large deal from our partnership of V River. So we expect as we get into fiscal 27 uh our cash flow to ease out because the collections will start to happen and the operating cash by the company would be significantly higher than what you see now.

[00:05:06]>> What should typically the AITA to CFO ratio be according to you because right now as I speak you know your reported EITA is uh roughly 75 to 80% higher over the last few years as an average as compared to your cash flow from operations.

[00:05:18]>> Yeah. So I think going forward a large part of IITA will drop down into our PAT right. So therefore the about 80 90% we don't expect all our fixed cost uh to remain. So therefore the conversion of IITA to PAT in fiscal 27 would be >> what we're talking about is cash flow to IITA uh you know how much of that will flow down as of now there is a gap out there the IITA numbers growing up well but the cash flow is not going up at the same pace that's that's the point >> yes we'd expect at least 70 80% of that to flow down going forward. All right.

[00:05:48]And promoter stake that has been coming down over the last uh you know few quarters understandably to accommodate some of the funds etc as well. Now uh just shy of 70%. Last quarter was 70.11% the quarter before that was 70.24%. So every quarter there's been a 2.3% sort of dilution by the promoters.

[00:06:07]Is there likely to continue?

[00:06:08]>> I think I think it's on the contrary the promoters participated in the prep that did for 386 crores. they brought in 200 crores and I think that caused a little bit of.1% of relation that happened the promoters are highly invested in the business we everybody subscribed to our warrants for the prep issue that we did for 36 cror with promoters bringing in 200 cror right so I don't see that going forward I think the conference of promoters are extremely extremely high that shows back on in their investment of 200 cror that happened couple of months back right so >> okay all right since things are looking so good have you seen a lot of institutional interest actually there's mutual fund which is quant uh they're the big ones in there.

[00:06:46]>> Uh have you received a lot more requests from domestic and foreign institutions?

[00:06:51]>> I think we continue to meet them at this time. uh we're also heading towards our capital day on 1 June that we have put through across meeting a lot of investors and I believe a lot of investors confidence is being shown up now at this time we expect that to improve as we go forward from management perspective execute well execute well and execute well >> execute well execute well execute well I'm just looking at some of the numbers that you're speaking about execution you know assuming mid sort of growth taking place next year you get to about 7500 crores on the top line with 10% margins close to 750 crores roughly 70% of that flowing down to your AITA as well that takes you to about a 500 cr pat uh market cap of close to around 18,000 crores. You're you know not particularly cheap still at around 35 36 times.

[00:07:32]>> Yeah, I think I think I would not want to speculate in short-term stuff.

[00:07:35]>> I'm speaking purely from aur perspective of I think it's a we are a direct beneficiary of the AIE infrastructure growth.

[00:07:42]>> I think we are the cusp of that. We are among very few c companies globally who can deliver this large scale AI infrastructure. the market breaks in what the market breaks in and from that perspective but highly positive for fiscal 27.

[00:07:54]>> We appreciate you coming down to the studio and giving us all of those details. Wishing you as well as your team all the very best and all the best for that investor day. Maybe there's a fresh update. We look forward to having you back on the show.

[00:08:04]>> Thank you. United States.

[00:08:05]>> Okay. All right.