Black Box explores acquisitions to hit $2 billion revenue goal
What's the story
Black Box Ltd, a leading tech company, expects its data center business to account for up to 30% of total revenue in the next two years. The projection is a significant jump from the current contribution of 17-18%. The surge is mainly due to the growing demand for artificial intelligence (AI) infrastructure. The company's CEO, Sanjeev Verma, revealed these details in an interview with CNBC-TV18 after their Q2 results announcement.
Market confidence
No signs of slowdown in AI infrastructure spending
Verma also said that Black Box hasn't seen any signs of a slowdown in AI infrastructure spending. He expects demand from hyperscale data center operators to remain strong.
The CEO described the current investment in AI infrastructure as a structural shift, one that is unlikely to reverse anytime soon.
Expansion plans
Potential acquisitions being explored for $2 billion revenue target
Verma also revealed that Black Box is considering potential acquisitions as part of its strategy to achieve an annual revenue of $2 billion by FY30.
He said the company is pursuing both organic and inorganic growth, with acquisitions likely to complement the expansion of its existing businesses.
However, he didn't confirm any specific target or transaction regarding a possible acquisition.
Acquisition impact
Recent acquisition and record order backlog boost growth outlook
The company's recent acquisition of Brazil-based 2S Inovacoes Tecnologicas added around ₹100 crore in Q2 FY27. The management expects an even bigger contribution in the December quarter.
Black Box's record order backlog of over $1 billion has boosted management's confidence in its growth outlook, with expectations to meet and possibly exceed its FY27 guidance.
Financial targets
FY27 revenue and profit growth targets set
Black Box has kept its FY27 revenue growth guidance at 23-27%, EBITDA growth at 27-32%, and profit after tax growth at 38-50%.
The company is targeting full-year order bookings of $1.3-1.5 billion and an exit order backlog of $1.3-1.4 billion, giving it a clear visibility for growth in FY28.