Black Box Ltd Management Discussions

ECONOMIC OVERVIEW GLOBAL ECONOMY

The global economy continues to navigate a complex environment marked by both resilience and emerging challenges. The latest projections from the International Monetary Fund (IMF) indicate that global GDP growth is likely to ease to 2.8% in CY2025, following an estimated

3.3% in CY2024, before seeing a modest rebound to 3.0% in CY2026. Although these growth rates remain below the pre-pandemic average of 3.7% (2000 2019), they suggest a certain degree of stability despite persistent macroeconomic and geopolitical headwinds.

In 2024, the global economy grew at a steady yet uneven pace across regions, posting a growth rate of 3.3%. A key development was the slowdown in global manufacturing most notably in Europe and parts of Asia, driven by supply chain disruptions and subdued external demand. In contrast, the services sector remained resilient, providing crucial support to economic activity. While inflation in services persisted, overall inflationary pressures eased across most economies. Commodity prices have largely stabilised, though the potential for broad-based price increases continues to pose a risk. With growth trends diverging and disinflation proving stubborn at the margins, central banks are likely to adopt varied approaches to monetary easing, adding to uncertainty around future policy rates and inflation outlooks.

Encouragingly, global headline inflation is on a downward trajectory, projected to decline to 4.3% in CY2025 and 3.6% in CY2026. Advanced economies are expected to see faster disinflation due to tighter monetary policies and easing energy prices, while inflation in emerging markets remains relatively controlled, aided by stabilising currencies and improved food supply dynamics.

Nonetheless, geopolitical tensions and policy uncertainties remain key risks. The 2025 U.S. tariffs on electronics have notably impacted the global industry, increasing costs and disrupting supply chains. A base tariff of 10% on most imported electronic components along with steeper duties on select Chinese products, has led to higher input costs for manufacturers, pressuring margins and pushing up consumer prices. These developments have accelerated the relocation of manufacturing from China to countries such as India and Vietnam, where tariff exemptions enhance competitiveness in the U.S. market.

Outlook

The global economy is anticipated to continue on a consistent expansion trajectory, with growth rates forecast at 2.8% for 2025 and 3.0% for 2026. This positive outlook is supported by strong economic performance in the United States and significant advancements within key emerging markets.

In the United States, growth is predicted at 1.8% in 2025 and 1.7% in 2026. This forecast takes into account anticipated changes in the labour market and potentially reduced consumer expenditure. A recovery is expected for the Eurozone, with growth projected at 0.8% in 2025, improving to 1.2% in 2026. This is linked to an increase in consumer spending and lower inflation rates.

Countries are focussing on restoring trade stability, advancing debt resolution efforts, maintaining policy clarity, and implementing structural reforms. In light of rising tariff pressures, many are diversifying supply chains and pursuing targeted trade negotiations to mitigate disruptions. Several economies have also introduced retaliatory tariffs to protect their trade interests.

Enhancing international cooperation remains vital to stabilise markets, safeguard financial systems, and support a sustainable and inclusive recovery. Through these proactive measures, the global community can better navigate current uncertainties and promote long-term economic stability.

Worldwide price increases are generally decelerating, though some regions are still contending with persistently high inflation. Global inflation is projected to decrease to 4.3% in 2025 and 3.6% in 2026. Developed economies are expected to meet their inflation targets sooner than other regions. Monetary policies are likely to vary across different areas, reflecting their diverse economic conditions.

Source: IMF, April 2025

INDIAN ECONOMY

Amid a complex and evolving global landscape marked by uneven growth, geopolitical tensions, and tighter financial conditions, India has demonstrated robust macroeconomic resilience. FY 2025 saw key developments that not only bolstered the domestic economy but also reaffirmed Indias standing as one of the worlds fastest-growing major economies. Despite headwinds such as inflationary pressures, global demand fluctuations, and external volatility, the countrys economic fundamentals remained strong, underpinning continued growth momentum.

Indias economic standing continues to ascend, with the nation now ranked as the worlds fifth-largest economy by nominal Gross Domestic Product (GDP) and the third-largest when evaluated by purchasing power parity (PPP). Ambitious national objectives have been established to achieve a US$ 5 trillion economy by FY 2028 and a US$ 30 trillion economy by 2047. These aims are to be realised through significant infrastructure investments, ongoing governmental reforms, and the widespread adoption of technological advancements. Reflecting this commitment, the capital investment budget for the upcoming financial year (2025-26) has increased to 11.21 Lakh Crore, representing 3.1% of GDP.

Integral to this accelerated growth trajectory and increasing economic self-sufficiency have been substantial governmental reforms and considerable capital allocated towards both physical and digital infrastructure. Government programmes such as Make in India 2.0, reforms simplifying business operations, and the

Production-Linked Incentive (PLI) scheme are designed to strengthen infrastructure, manufacturing, and exports, positioning India as a key global manufacturing participant. inflation anticipated to reach targets by late 2025, With a more accommodating monetary policy is probable. Infrastructure development and supportive policies will facilitate capital formation, while rural demand benefits from initiatives like the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY).

According to the Economic Survey 2024-25 and the RBIs March 2025 bulletin, Indias GDP growth for the year is projected at 6.5%, driven by resilient domestic demand, ongoing infrastructure investments, and sound fiscal management.

Inflation trends remained broadly favourable, with headline CPI inflation falling to a seven-month low of 3.16% in April 2025, largely due to easing food prices and a decline in global crude oil rates. However, core inflation (excluding food and fuel) remained elevated at 4.1% in March 2025, indicating ongoing price pressures in select services and discretionary categories.

In light of the evolvinginflation trajectory and to support economic activity, the Reserve Bank of India (RBI) initiated its first rate cut in nearly five years, reducing the repo rate by 25 basis points to 6.25% on February 7, 2025, followed by an additional cut to 6.00% in April. These calibrated measures aim to stimulate growth amid a more benign inflation environment. Nonetheless, the RBI continues adopt a cautious, data-driven stance, further exacerbated by rising geopolitical tensions and retaliatory tariffs imposed by the United States.

Indias manufacturing sector recorded its fastest growth in ten months in April 2025, supported by strong export demand. The Purchasing Managers Index (PMI) rose to 58.2 in April from 58.1 in March, indicating expansion. This uptick was driven by a notable increase in new export orders, especially in consumer goods, suggesting a possible shift in global supply chains toward India in response to shifting trade dynamics and U.S. tariffs. Overall, exports in FY 2025 edged up by 0.1% to US$ 395.6 billion, buoyed by solid performance in electronics, engineering goods, and pharmaceuticals, despite a temporary dip in February 2025 due to base effects and subdued global demand.

Nevertheless, structural challenges remain, especially in sustaining manufacturing momentum, boosting private sector investment, and creating employment opportunities for the youth and semi-skilled workforce. The RBI emphasises that advancing structural reforms, enhancing productivity, and strengthening both physical and human capital will be essential to reinforce macroeconomic stability and achieve long-term growth objectives.

Outlook

Looking ahead, despite ongoing global uncertainties, Indias economic outlook remains strong, with GDP growth for FY 2026 expected to remain in the 6.5 7% range. This resilience is underpinned by robust domestic demand, accelerating digital adoption, and manufacturing expansion supported by the Production-Linked Incentive (PLI) schemes. Infrastructure development continues to fuel economic momentum; however, elevated food inflation presents policy challenges, prompting the RBI to maintain a cautious and data-driven approach.

On the external front, India continues to navigate geopolitical tensions and U.S. tariff actions, while benefiting from a diversified trade portfolio and a strengthening domestic manufacturing base. Over the long term, Indias young workforce, urbanisation, and digital expansion, combined with the governments ‘Viksit Bharat 2047 agenda, are set to drive inclusive and sustainable growth.

The governments emphasis on capital expenditure, prudent fiscal management, and measures that boost business and consumer confidence are collectively creating an environment conducive to investment and consumption.

The Union Budget FY 2026 outlines a growth-focussed financial strategy that addresses both immediate and future economic requirements. By increasing disposable income, prioritising infrastructure, and promoting domestic manufacturing, the budget aims for sustained growth while maintaining fiscal responsibility. A key feature of the budget is the increased income tax exemption limit of 12.75 lakh annually, which is expected to boost middle-class disposable income and stimulate consumer spending.

Source: RBI, PIB, Economic Survey 2024-25

INDUSTRY OVERVIEW Global IT Services Industry

The global IT services industry remains a pivotal force in enabling digital transformation and business innovation. According to Frost & Sullivan, the industry reached a market size of approximately US$ 1,409 billion in calendar year 2024. Propelled by surging investments in artificial intelligence, cloud, cybersecurity, and next-generation infrastructure, the sector is expected to maintain strong momentum. The compound annual growth rate (CAGR) from 2024 to 2028 is projected at 7.9%, with the market forecast to surpass US$ 1,920 billion by 2028. Core growth drivers include the integration of AI into business operations, ongoing digitalisation across industries, and increased demand for managed and security services. Enterprises worldwide continue to prioritise IT to boost agility, resilience, and competitive advantage.

Source:https://store.frost.com/industries/it-services-and-applications.html

Industry Deep-dive

1. B anking, Financial Services & Insurance (BFSI)

The BFSI sector today is not just securing transactions it is digitally architecting trust, operational velocity, and sustainable growth. BFSIs total ICT spending is expected to exceed US$ 700 billion (Source: IDC) globally in 2025, as the industry continues to accelerate transition from legacy-bound infrastructure to digitally composable banking models.

a) AI-Led Reinvention of Financial Operations:

Banks and insurers are scaling generative AI to enhance everything from customer onboarding to portfolio advisory. AI-enabled agents now support personalised financial insights, predictive fraud detection, and virtual assistants for 24/7 engagement. The adoption of hybrid cloud environments is accelerating this shift, enabling banks to deploy secure AI at a scale.

b) Cloud-First Core and Platform Modernisation:

Financial institutions are steadily migrating legacy systems to cloud-native core banking platforms, unlocking agility, scalability, and API-driven integration. This transition supports real-time payments, digital lending, and embedded improving compliance and cost optimisation.

c) Digital Trust and Fraud Prevention:

With growing digital touchpoints and high-value transactions, cybersecurity remains paramount. BFSI players are investing in zero-trust security architectures, biometric authentication, and AI-driven transaction monitoring to safeguard customer data and ensure regulatory compliance.

2. Healthcare

Healthcare providers globally are undertaking one of the most comprehensive digital transformations in decades. IT services are central to enabling a connected, resilient, and patient-centric model of care. This is exemplified the healthcare industry being expected to exceed US$ 330 billion (Source: IDC).

a) Predictive and Personalised Care through AI:

Hospitals and health systems are embedding AI across clinical workflows, from diagnostic imaging and virtual triage to treatment pathway optimisation. AI-powered decision support is improving diagnostic accuracy and enabling early interventions in critical care.

b) E xpansion of Virtual and Remote Care Models:

The adoption of telehealth and remote patient monitoring (RPM) continues to rise. Providers are investing in 5G-enabled connectivity, edge computing for hospital-at-home services, and mobile health platforms to deliver care beyond traditional settings improving access and lowering cost per encounter.

c) Seamless Data Interoperability and Experience

Layering:

Healthcare IT is shifting toward interoperable platforms with integrated health records across EHR, diagnostics, and IoT devices. This allows providers to deliver a longitudinal patient view, while also enhancing digital front-door experiences through omni-channel engagement.

3. Technology

The Technology sector is spearheading next-generation infrastructure transformation, with hyperscale growth in data consumption, streaming, and automation accelerating demand for integrated IT services.

a) AI-Centric Infrastructure for High-Performance Computing:

Cloud and colocation data centres are being retrofitted for GPU-dense AI workloads, with large-scale deployments in hyperscale and enterprise clusters. Semiconductor firms are leveraging AI-powered design automation to accelerate chip development lifecycles.

b) Distributed Cloud and 5G-Enabled Edge:

With rising demand for ultra-low latency applications, telecom players are expanding edge-native compute environments. Hybrid architectures enable dynamic service orchestration across cloud, edge, and private networks critical for media, smart cities, and Industry 4.0 use cases.

c) Media and entertainment companies are adopting GenAI across creative workflows powering real-time localisation and content personalisation via AI co-pilots and microservices architectures.

4. Retail/Consumer

For the retail sector, every interaction is an infrastructure moment and IT services are ensuring these moments are seamless, secure, and smart. Consumer brands and retail enterprises are evolving into data-native, experience-first businesses, with IT services powering their transition from channel-centric to omnichannel, insight-driven ecosystems. The global ICT spending by retail industry globally is expected to be above US$ 360 billion (Source: IDC). a) Omnichannel Digital Engagement:

Retailers are reimagining the connected store with in-store mobility, digital signage, and RFID-based real-time inventory. Public sector agencies are modernising digital portals and identity services, offering frictionless access to services and benefits across platforms.

b) Analytics-Led Personalisation and Service

Efficiency:

Data-driven segmentation and behavioural analytics are helping both sectors deliver hyper-personalised experiences. Governments are deploying AI to streamline benefits processing and citizen response, while retailers leverage analytics for demand planning and loyalty optimisation.

c) Trust-First Architectures and Automation:

The proliferation of digital services in these sectors is matched by rising investments in cybersecurity, data privacy, and automation. Whether addressing consumer fraud or ensuring uptime for civic services, managed security, SASE architectures, and robotic process automation (RPA) are core enablers.

5. Public Sector

Governments are leveraging IT services to modernise legacy operations and improve transparency. With global ICT spends expected to be more than US$ 500 billion (Source: IDC), public sector institutions are embedding secure digital infrastructure to reimagine service delivery- from national programmes to local delivery.

a) Unified citizen portals and workflow automation are enhancing access, combining payments, ID services, permits, and benefits into digitally seamless platforms.

b) Cloud-first strategies are accelerating, with up to 75% (Source: Salesforce) of workloads expected on hyperscale platforms by end of 2025 itself driven by the need for resilience, cost-efficiency,

c) With critical data and infrastructure at stake, cybersecurity frameworks are evolving toward AI-powered threat detection, zero-trust network architectures, and resilient endpoint control.

6. I ndustrial

In a world of interconnected machines and digitised grids, IT services are the command layer enabling performance, sustainability, and safety. Industrial enterprises are embracing digital engineering and green IT at scale, turning operational infrastructure into intelligent, self-optimising platforms.

a) Intelligent Operations and Factory Modernisation:

Manufacturers are adopting smart factory frameworks, combining IoT, edge computing, and AI to enable real-time process control, predictive maintenance, and quality automation. Robotics and digital twins are unlocking efficiency in both discrete and process industries. b) Energy and Connectivity Infrastructure:

With rising demand for energy-intensive digital infrastructure, industrial firms are deploying private 5G and low-latency networks to connect distributed assets and workforce. These networks support machine-to-machine (M2M) communication and remote field diagnostics at scale. c) Resilient, Transparent Supply Chains:

Supply chain digitalisation continues with blockchain for traceability, cloud-native inventory management, and AI for risk prediction. Industrial customers are prioritising platforms that offer integrated visibility across global supplier networks, helping mitigate disruptions and ensure ESG compliance.

Global and Regional Digital Transformation Spending, 2025 2027

Year	Global Spend	US	Europe	Rest of World
2025	2,800	1,020	1,180	600
2026	3,350	1,215	1,440	695
2027	3,900	1,390	1,650	860

Source: Frost and Sullivan

Frost and Sullivan has increased their global spending forecast between 8-10% from 2025 to 2028 compared to the estimates provided last year.

Worldwide IT Spending

.

According to Gartners July 15, 2025 forecast, worldwide IT spending is now expected to reach US$ 5.43 trillion in CY 2025, representing a 7.9% increase over the projected US$ 5.03 trillion for CY 2024. Gartner Forecasts Worldwide IT Spending to Grow 7.9% in 2025

Segment Highlights:

Data Centre Systems: These continue to lead the charge, with spending in this segment forecasted to surge 42.4% in 2025, reaching approximately US$ 474.9 billion, driven by significant investments in GenAI-optimised servers. Gartner projects that by 2027, spending on GenAI servers will triple that of conventional servers (CIO Dive). Generative AI (GenAI): Gartner estimates that global GenAI-related spending will reach US$ 644 billion in 2025, marking an astounding 76.4% year-over-year increase. Their analysts emphasise that "by 2030, there wont be a single dollar of GDP … not influenced by GenAI" (Channelweb).

Software spending: Software continues its robust upward trajectory, expected to grow 10.5% in 2025 to US$ 1.23 trillion. This reflects strong demand for software with embedded AI functionalities, often delivered via upgrades, add-ons, or consumption-based models (CIO Dive).

IT services: This category including consulting, outsourcing, cloud, SaaS, and managed services is forecasted to expand 4.4% in 2025, totalling around US$ 1.69 trillion. Growth has dialed back from earlier projections due to the "uncertainty pause" in Q2 (CIO Dive) due to prevailing macro conditions.

Devices and Communication Services: Devices are expected to grow by 5.4% to US$ 759.6 billion, and communications services by 2.1% to US$ 1.28 trillion.

Macro pause and strategic reset: Gartner also mentioned that Q2 2025 experienced a strategic suspension of net-new projects an "uncertainty pause" attributable to economic, tariff, and geopolitical variables. Nevertheless, this pause is seen as temporary, with expectations for resumed momentum by Q4 once uncertainty stabilises (Channelweb).

Table 1. Worldwide IT Spending Forecast (million of U.S. Dollars)

	2024	2024	2025	2025
Year	Spending	Growth (%)	Spending	Growth (%)
Data Centre	3,33,372	40.3	4,74,883	42.4
Systems
Devices	7,20,681	4.6	7,59,615	5.4
Software	11,14,604	11.9	12,32,145	10.5
IT Services	16,14 756	4.8	16,86,321	4.4
Communica-	12,56,287	2.2	12,82,592	2.1
tions Services
Overall IT	50,39,699	7.4	54,35,555	7.9

Key Demand Drivers

Cloud-first strategies:

Enterprises across industries are increasingly adopting cloud-first approaches, prioritising agility, scalability, and cost optimisation. This has led to rapid multi-cloud and hybrid cloud deployments, enabling businesses to leverage the strengths of different cloud providers while maintaining operational flexibility.

Generative AI:

The rise of generative AI is transforming how businesses automate processes, create content, and interact with customers. It is fuelling demand for AI consulting, integration services, and infrastructure capable of supporting large-scale model training and inference.

Cybersecurity modernisation:

As cyber threats grow more complex and frequent, organisations are prioritising investment in proactive and adaptive cybersecurity frameworks. This includes upgrading network security, implementing zero-trust architectures, and outsourcing managed security services.

Data Sovereignty:

Countries are enforcing stricter data localisation and sovereignty regulations, requiring enterprises to store and process data within national or regional boundaries. This has increased the demand for localised IT infrastructure, such as sovereign cloud solutions and region-

Modern Workplace:

The shift to hybrid and remote work has made secure, reliable digital collaboration tools a business essential.

Enterprises are investing in unified communication platforms, endpoint security, and workplace infrastructure to support distributed teams while maintaining productivity and compliance.

CIO Spend Outlook and Strategic Priorities

As per Gartners 2024 CIO survey, global IT budgets are expected to grow by 6-7% YoY, reflecting a continued shift from cost-saving to value creation. Key areas of IT spend allocation include:

Todays CIOs are driven by objectives such as business transformation, resilient operations, and faster time-to-market, placing digital infrastructure, AI enablement, and managed services at the forefront of their technology roadmaps.

Trends Shaping the Industrys Future

1. AI-Powered IT Services

AI is becoming embedded in all service lines, driving new engagements in AIOps, AI-enabled testing, and virtual agent services.

2. Hyper automation

Combining robotic process automation (RPA), low-code platforms, and AI, enterprises are automating end-to-end business processes at scale.

3. Industry Cloud Platforms

Purpose-built cloud solutions for healthcare, banking, and industrial sectors are becoming standard offerings from service providers.

4. Decentralised Infrastructure

Edge computing, 5G, and IoT networks are creating distributed, real-time computing environments, demanding continuous infrastructure support.

5. Sustainable IT

The industry is aligning with ESG goals, leading to demand for carbon-neutral data centres, energy-efficientnetworks,and sustainable IT operations. data centres.

Summary

The Global IT Services industry is shifting from cost-based outsourcing to strategic digital transformation partnerships. Post-pandemic digitisation, AI democratisation through players like DeepSeek, and heightened cybersecurity and compliance demands are fueling growth in digital infrastructure, cloud platforms, and managed services. Service providers that combine technological depth with domain expertise and global delivery resilience are best positioned to lead in this trillion dollar plus industry, enabling enterprise transformation over the coming decade.

Regional Market Overview North America

In 2025, the IT Services market in North America is expected to generate a substantial US$ 601.55 billion in revenue, with the United States accounting for US$ 550.28 billion, firmly establishing its position as the global leader in this space. The market is largely driven by IT outsourcing, projected to reach a volume of US$ 233.25 billion this year.

Looking ahead, the region is poised for steady growth, with a projected CAGR of 5.27% from 2025 to 2029, reaching US$ 738.64 billion by 2029. This momentum is supported by robust demand for cloud-based services, increasing adoption of AI and machine learning, favourable macroeconomic conditions, and heightened focus on cybersecurity. Additionally, average IT services spending per employee is expected to reach US$ 2,340, underscoring the strategic value of technology investments among North American enterprises. While the U.S. continues to dominate, Canada is also experiencing strong growth in cloud computing adoption, further strengthening the regions critical role in the global IT services landscape.

Source: Statista

Data centre market in North America

The Data Centre market is projected to generate revenue of US$ 149.91 billion in 2025, with Network Infrastructure emerging as the dominant segment, accounting for a projected market volume of US$ 62.81 billion. Driven by increasing demand for cloud services, data processing, and storage capabilities, the market is expected to grow at a robust CAGR of 11.02% between 2025 and 2029, reaching a total value of US$ 227.72 billion by the end of the forecast period.

Source: Statista

Vacancy declines to a record low 2.3%

As of the end of 2024, colocation vacancy in North America fell to a historic low of just 2.3%, driven by persistent demand despite several consecutive years of record-level construction. Available data centre space remains extremely scarce, with very few contiguous blocks exceeding 5 MW across the region. Any second-generation space that does become available is typically re-leased within weeks. Currently, nearly 8 GW of capacity is under construction, with 73% already pre-leased.

The IT services sector in Europe plays a vital role in advancing digital transformation across key industries such as finance, healthcare, manufacturing, and retail. European enterprises both large and small are increasingly relying on IT services to navigate challenges including cybersecurity threats, regulatory compliance, and the need for scalable infrastructure. The regions strong commitment to innovation is reflected in its rapid adoption of emerging technologies such as artificial intelligence (AI), cloud computing, and the Internet of Things (IoT). A significant driver of market growth is the European Unions focus on data protection and privacy, most notably through the General Data Protection Regulation (GDPR), which has heightened demand for secure and compliant IT services. Furthermore, the growing emphasis on sustainability is accelerating the adoption of green IT practices, adding further momentum to the expansion of the European IT services market.

Source: Market Data Forecast

The Europe data centre market size was calculated to be US$ 42.97 billion in 2024 and is anticipated to be worth US$ 77.81 billion by 2033 from US$ 45.90 billion in 2025, growing at a CAGR of 6.82% during the forecast period.

The Europe data centre market is witnessing strong growth, driven by increasing digitisation across industries and the rapid proliferation of cloud computing services. This momentum is expected to continue over the forecast period (2033). Large-scale facilities currently dominate the region, accounting for nearly 50% of total capacity. The rising adoption of artificial intelligence (AI) and Internet of Things (IoT) technologies is further fuelling the demand for high-performance infrastructure. Meanwhile, countries like Sweden and Denmark are emerging as leading hubs for sustainable data centres, utilising renewable energy to meet stringent environmental standards. In addition, government incentives promoting green IT initiatives are encouraging significant investments in Tier 3 and Tier 4 facilities, supporting sustained growth in the market.

Source: Market Data Forecast

Asia-Pacific (APAC)

In 2025, the Asia-Pacific (APAC) region is emerging as one of the most dynamic and rapidly expanding segments of the global IT services landscape. Marked by swift innovation and strong momentum across areas such as software, cloud computing, data centres, and industry-specific IT solutions, APAC is increasingly drawing global attention as a hub for technology investments and digital transformation. The region continues to witness a high pace of innovation, with companies actively engaging in strategic acquisitions and launching new products.

The IT services market in APAC, valued at US$ 364.6 billion in 2023, is on track for substantial growth, projected to grow at a healthy CAGR of 11% from 2024 to 2030. This expansion is primarily fuelled by the rising demand for cloud-based solutions. A recent study shows that 97% of enterprises in the region have adopted or plan to adopt multi-cloud strategies. Businesses are increasingly turning to Infrastructure as a Service (IaaS) to reduce capital expenditure and boost efficiency, while the adoption of Software as a Service (SaaS) continues to rise, enabling scalable application deployment and streamlined operations.

The Asia-Pacific region is rapidly establishing itself as a global hub for data centres, driven by the widespread deployment of 5G technology and substantial investments from global players. Evolving regulatory landscapes are also contributing to this momentum China has started to ease restrictions on cross-border data flows, while Singapores 2022 decision to lift its moratorium on new data centre developments has paved the way for renewed infrastructure growth.

At the same time, digital payments are emerging as a significant growth driver, particularly in India. The countrys Unified Payments Interface (UPI) is gaining traction beyond its borders, with adoption spreading to neighboring countries like Sri Lanka, Singapore, Bhutan, and Nepal further propelling the regions digital financial transformation.

Investments in emerging technologies such as AI and Big Data are also propelling market growth. China is leading the way in AI, with its research institutions dominating both patent filings and scientific publications. Japan is making substantial strides as well, supported by the Society 5.0 initiative, which aims to create a seamless integration between physical and digital spaces to address societal challenges.

Governments across the Asia-Pacific region are taking an active and strategic role in accelerating the growth of the IT services and digital innovation ecosystem. In India, the enhanced Digital India initiative - relaunched in August 2023 - aims to build a future-ready digital workforce by upskilling over 6,00,000 IT professionals. The initiative also includes the development of AI Centres of Excellence focussed on driving innovation in critical sectors such as agriculture, healthcare, and smart urban infrastructure.

Elsewhere in the region, ASEAN member states are working collaboratively to establish robust regulatory frameworks for AI governance and ethical deployment. Singapore, in particular, is at the forefront of these efforts with progressive measures like the Veritas Toolkit 2.0 an open-source framework designed to guide financial institutions in implementing AI solutions responsibly. This initiative underscores the regions commitment not just to technological advancement, but to ensuring that innovation is underpinned by transparency, accountability, and ethical standards.

Source: Grand View Research

India

The India IT services market reached a size of US$ 39.83 billion in 2024 and is projected to grow to US$ 75.03 billion by 2033, registering a CAGR of 7.30% during 2025 2033, according to IMARC Group. This growth is propelled by increasing digital transformation, cloud adoption, AI and automation, rising cybersecurity needs, and a booming startup ecosystem. Major drivers also include growing demand for outsourcing, a vast skilled workforce, and supportive government initiatives such as Digital India and the rollout of 5G. The demand for hybrid and multi-cloud solutions, SaaS, and IaaS is increasing, driving growth in cloud consulting and managed services. India continues to dominate the global IT outsourcing market due to its cost-effective services, strong infrastructure, and large English-speaking tech talent pool, making it a top destination for software development, IT consulting, and managed services. Segmentation analysis shows strong demand from both SMEs and large enterprises, with growing preference for cloud-based deployment across sectors such as BFSI, telecom, healthcare, retail, manufacturing, and government.

Additionally, India is now widely recognised as the GCC capital of the world, hosting over 1,700 global capability centres across more than 2,975 distinct operating units as of FY 2024. These GCCs collectively generated approximately US$ 64.6 billion in revenue and employed nearly 1.9 million professionals. Significantly, more than 50% of Indian GCCs have now shifted from cost-efficient delivery functions to strategic innovation roles leading R&D, portfolio transformation, and AI deployments. Forecasts indicate that by 2030, Indias GCC ecosystem could expand to 2,100 2,200 centres, employing 2.5 2.8 million people and generating US$ 99 105 billion in revenue.

The accelerating growth and elevated strategic mandate of GCCs in India is fuelling demand for robust digital infrastructure services across data, connectivity, networking, and cybersecurity domains. As GCCs scale up AI, cloud, and R&D capabilities, the need for local, high-performance infrastructure including data centres, edge compute, secure networks, and managed services is expected to surge. (Source: Zinnov)

The MENA markets data centre systems segment will see the highest annual growth at 14.9%, similar to 2024, fuelled by investments in AI-embedded, scalable cloud infrastructure by regional hyperscalers. At the same time, software spending particularly in the area of generative AI (GenAI) is expected to see robust growth.

MENA CIOs are refining GenAI strategies post-pilot, emphasising use cases aligned with business priorities and investing in AI literacy to maximise value.

This regional momentum is being reinforced by ambitious government-led digital transformation strategies, including smart city projects in the UAE and Saudi Arabia, as well as broader efforts to diversify economies away from oil dependency. Continued investments in 5G, the Internet of Things (IoT), e-governance, and digital payment ecosystems are also playing a key role in reshaping the regions IT landscape.

By prioritising workforce development and elevating customer experience, the MENA region is steadily establishing itself as a global hub for technological innovation.

Source: Middle East AI News

Connectivity Infrastructure

Connectivity infrastructure is a foundational pillar of the global IT services market, encompassing various technologies and solutions that enable seamless communication and data transfer across networks. The key trends in this sector include the proliferation of 5G technology, the increasing adoption of Network as a Service (NaaS) and the integration of advanced network security solutions.

1. 5G Expansion and Private Networks: Deployment of both public and enterprise/private 5G continues to accelerate. Open RAN and AI/automation in network stacks are key drivers, and vendors like Ericsson lead the market in innovation and enterprise traction.

2. Network-as-a-Service & Managed Connectivity:

Growing adoption of NaaS models, driven by IoT device connectivity platforms, is shifting infrastructure procurement toward OPEX. CSPs, MVNOs, and third-party providers compete to offer integrated connectivity + device + management solutions at scale.

3. Integrated Connected Buildings Ecosystem:

Connected buildings continue to evolve via integration of IoT, AI-driven analytics, digital twins, and predictive maintenance. As per Frost & Sullivan Analysis, The global connected buildings market is estimated to reach US$ 154 billion by CY 2027, growing at a CAGR of 13.6% between CY 2024 and CY 2028.

Enterprise Networking

Enterprise networking remains a foundational pillar of IT infrastructure, enabling seamless communication, secure data exchange, and operational efficiency across increasingly distributed enterprises. As digital transformation accelerates, the need for resilient, high-performing, and scalable enterprise networks continues to rise driven by hybrid work, edge computing, cloud adoption, and the exponential growth of data traffic.

The global enterprise networking market was valued at US$ 151 billion in 2023, comprising US$ 80 billion in services and US$ 71 billion in hardware. According to Frost & Sullivan, the market is projected to grow at a CAGR of 6.3% from 2024 to 2028, reaching US$ 184 billion by 2028 (Frost & Sullivan Analysis). This growth is primarily fuelled by the expanding adoption of cloud-based services, IoT devices, network security upgrades, and smart building automation.

Key technologies transforming enterprise networking include Software-Defined Networking (SDN) and Network Functions Virtualisation (NFV). SDN enables centralised, programmable network control, allowing IT teams to dynamically manage traffic and adjust resources as workloads shift across cloud and on-premise environments.

NFV virtualises critical network functions such as firewalls, load balancers, and routers reducing dependency on proprietary hardware and improving flexibility and cost efficiency.

Another significant trend is the growing shift to Network-as-a-Service (NaaS) models, which provide networking capabilities on a subscription basis. With NaaS, enterprises can consume LAN, WAN, and cloud-based connectivity services on demand, thereby simplifying network deployment, scaling, and lifecycle management. As per Frost & Sullivan, there is an increasing NaaS adoption across retail, manufacturing, financial services, and smart campuses, especially in mid-market and multi-site deployments.

Enterprise networking services are also playing a larger role, projected to grow from US$ 80 billion in 2023 to US$ 92 billion in 2028 at a CAGR of 2.9%. Meanwhile, hardware spending is expected to grow faster from US$ 71 billion in 2023 to US$ 92 billion by 2028, a CAGR of 5.4%, as businesses refresh legacy infrastructure and invest in high-speed switches, Wi-Fi 6/6E/7 access points, and secure SD-WAN platforms.

Data Centres

DC demand to soar amidst massive digitalisation

Digitalisation and disruptive technologies such as AI, cloud computing, machine learning, generative models etc. are taking rapid strides generating, processing and storing large amount of data every day. In 2024, global data collection reached nearly 150 zettabytes, marking a 2.3x increase from 2020 levels. This figure is projected to double over the next 3 4 years, driven by rising internet penetration and the growing adoption of Everything as a Service (XaaS), Internet of Things (IoT), Big Data, and AI across sectors ranging from e-commerce and real estate to governance, defence, and more.

Consequently, the demand for high-speed, secure data storage solutions is witnessing a sharp rise. The global data centre market continues its upward growth trajectory, projected to reach approximately US$ 527.5 billion in 2025, expanding at a CAGR of ~7% to nearly US$ 739 billion by 2030 (Statista). This growth is powered by a convergence of megatrends cloud hyperscale expansion, generative AI infrastructure, and rising demand for edge and colocation deployments. With rising workload intensity, sustainability imperatives, and geopolitical shifts influencing infrastructure decisions, enterprises and hyperscalers are reevaluating facility size, energy strategy, and deployment location, creating dynamic opportunities across the value chain. The coming years are likely to see phenomenal growth in the DC market, fuelled by advancements in technology and increasing investments in related infrastructure. Leading operators are continuously innovating to enhance efficiency, security and scalability of data centres making them pivotal in driving economic growth across the world including India.

Key global DC trends:

Accelerating cloud computation & 5G adoption

A shift towards liquid and immersion cooling infrastructure to manage heat generation in GPUs

Surge in demand for edge data centres

Enhancements in DC rack design supporting high performance capabilities & vertical scaling

Growth in AI/Gen AI specific data centres

Rise in capital investment towards power generation capacity to support DC growth

Rise in operations by hyperscalers

Integration of alternative energy sources Nuclear energy, green hydrogen, etc.

The global DC industry has been witnessing robust growth and transformation across both established and emerging markets. While the USA, UK, Canada and Germany are mature DC markets, countries, like China, Japan, Australia etc. have a relatively established market and are prioritising DC industry growth. Meanwhile, nascent and developing markets such as India, UAE, Indonesia, etc., with their robust government policies, improvements in infrastructure & connectivity, surge in technology adoption and land availability are attracting global investors and operators alike.

North America: AI-led hyperscale growth and power densification

North America remains the global nucleus of data centre investment, with more than 390 active projects across 55+ players, the region represents a capital value exceeding US$ 260 billion (Source: Arizton DC report; Technavio; PEC Industrial Info Resources; Cushman Wakefield; JLL; BCG), underscoring the strategic commitment of both hyperscalers and colocation providers.

Installed capacity has crossed ~41 GW of total data centre power load in 2024 (Source: datacenterHawk; GlobalData; Industry interviews; BCG analysis), with projections indicating a doubling by 2028, led by hyperscaler expansion. The installed base is growing at a CAGR of ~19%, fuelled largely by the exponential rise in AI workloads.

North Americas DC growth is increasingly AI-centric. AI-driven DCs are expected to see their power loads grow 5x by 2028 (Source: datacenterHawk; GlobalData; Industry interviews; BCG analysis), prompting demand for high-density cooling, specialised networking, and intelligent rack systems.

A significant shift towards campus-style mega-sites is underway. Operators, especially hyperscalers are pursuing larger, modular, and power-optimised campuses with average build sizes now exceeding

37 MW per facility (Source: datacenterHawk; GlobalData; Industry interviews; BCG analysis), a marked increase from before.

Colocation (Colo) providers now account for 30 40% of deployments (Source: Arizton DC report; Technavio; PEC Industrial Info Resources; Cushman Wakefield; JLL; BCG), carving out a robust mid-market segment that serves both hyperscalers and enterprise tenants. This tier is seeing renewed investment due to hybrid cloud adoption.

Source: Colliers

Data pertains to co-location data centres in top 7 cities Bengaluru, Chennal, Delhi NCR, Hyderabad, Kolkata, Mumbal and Pune Data centre capacity represents total IT load capacity including occupied as well as unoccupied space Data as of April 2025 The digital backbone: Data centre growth prospects in India *msf: million square feet

With rise in demand for digital & cloud services, increasing IoT & AI adoption, favourable government policies and higher internet penetration as well as data consumption, major DC operators both domestic and international are expanding their presence in the country, committing long-term investments in key markets including Tier II/III cities. India is emerging as one of the fastest-growing data centre markets globally, supported by affordable land, submarine cable connectivity, reliable commercial power supply, and strict data localisation norms.

In the years ahead, demand for high-density racks, energy storage, and advanced computing systems is expected to increase significantly. Indias data centre market is poised for exponential growth and is well-positioned to gain a competitive edge within the broader APAC region, thanks to its strengths in four critical areas: land, electricity, infrastructure, and skilled talent. Notably, the high energy demands will accelerate the adoption of green, energy-efficient data storage and cooling solutions across the Indian data centre industry.

Key growth drivers in India

Rapid digitalisation to fuel DC expansion in India

Favourable government policies

Rising data consumption & rapid 5G deployment

Favourable government policies

Growing convergence of cloud computation & AI

Indias green DC capacity almost doubled since 2020

As data consumption continues to grow manifold, energy efficiency, sustainability and carbon emissions are likely to become focal considerations in the burgeoning DC footprint globally, including India. Data centres across the world are now actively focussing on achieving higher power and carbon efficiency, simultaneously targeting higher computing capabilities at lower costs. Sustainability in DC has now become one of the important parameters for operators, investors and occupiers as they continue to balance their business goals with global sustainability standards. In the Indian context, as of April 2025, about one-fourth of the total DC capacity across major cities were green certified. In country witnessed a CAGR of 15%, reaching from 159 MW in 2020 to 314 MW as of April 2025.

Outlook:

DC capacity to cross 4,500 MW by 2030 (3x from April 2025) as US$ 20-25 billion of future investments materialise

Rapid digitalisation, data localisation policies and robust government support will continue to drive DC industry growth and associated real estate demand in India

DC capacity of about 4,500 MW to translate into a real estate footprint of 55 msf in the next 5 -6 years

Going ahead, majority of the new supply is likely to be in greater than 50 MW DC size and account for nearly two-thirds of DC stock by 2030

Source: Colliers Report, Statista, JLL, BCG

Modern Workplace

The modern workplace is evolving swiftly, shaped by trends such as remote work, flexible schedules, and the widespread adoption of advanced collaboration tools. These changes are reshaping IT service needs and fuelling increased investment in digital workplace solutions. The COVID-19 pandemic shift, pushing organisations to adopt technologies that enable seamless communication and collaboration across distributed teams. As companies continue to see the lasting advantages of workforce flexibility, this momentum is expected to persist.

fact,greencertifiedDC Hybrid job postings have grown

9% in Q1 2023 to nearly 24% of new roles by early 2025. Fully remote positions have also seen steady growth over the past two years. Fully on-site roles continue to decline as hybrid models gain traction. New in-office job postings dropped from 83% to 66% during 2023, and this downward trend persisted through 2024 reinforcing the view that flexible work arrangements are becoming a permanent fixture of the modern workforce.

With the rise in remote work, safeguarding data and ensuring regulatory compliance have become top priorities. Organisations are implementing advanced security measures to protect sensitive information and uphold industry standards.

The global transition to remote work is driving increased demand for Unified Communications as a Service (UCaaS) solution. In todays fast-paced business environment, where remote and distributed teams are the norm, seamless communication and collaboration have become essential. UCaaS provides an integrated suite of tools, including voice, video, messaging, and conferencing, within a single platform, enabling remote employees to stay connected and work together efficiently from any location.

The UCaaS market is projected to reach US$ 53.2 billion by 2028, growing at a CAGR of 16.7%. The markets steady expansion is being fuelled by the growing need to reduce acceleratedthis the financial burden of traditional communication systems, the enforcement of stricter data protection regulations, and an increased emphasis on streamlining communication infrastructure, improving collaboration, and lowering operational costs.

capacityinthe K risingfrom ey Market Trends: Market trends include the adoption of hybrid UCaaS deployments. Data privacy and security concerns are influencing UCaaS solutions and increasing its adoption among SMEs.

Geographical Trends: North America dominates the market, supported by the rising implementation of stringent regulations to maintain data privacy. However, Asia Pacific is emerging as a fast-growing market on account of the increasing mobile adoption and digital transformation.

Major Market Drivers: Key drivers include the rise of remote work trends and the increasing adoption of hybrid UCaaS solutions.

Source: Frost & Sullivan, Grand View Research, Robert Half

Cybersecurity

The demand for comprehensive cybersecurity solutions and services, including network security, cloud security, application security and endpoint security, has steadily surged over the years. The increasing frequency and severity

Cyber Security Market Size 2023 to 2034

(US$ Bn) of cyberattacks have made cybersecurity a top priority for businesses across all sectors. With the shift to remote work, it has exposed businesses to new vulnerabilities and expanded the attack surface for cybercriminals.

Cybersecurity has become essential in todays digital era, where large volumes of personal, financial, and organisational data are stored and exchanged online. As cyber threats like hacking, identity theft, ransomware, and phishing continue to grow, protecting sensitive information is crucial for individuals, businesses, and governments.

Safeguarding digital and critical infrastructure, such as power grids, healthcare systems, transportation networks, and financial institutions, has made cybersecurity a strategic priority for nations today. As these systems become more interconnected, they face heightened risks from cyberattacks that can disrupt essential services, inflict economic damage, and compromise national security. By investing in advanced technologies, skilled talent, and strong policy frameworks, countries can enhance the resilience of their infrastructure, maintain public trust, and cultivate a secure and reliable digital ecosystem.

Growth Driver	Market Need	Black Box Solution Portfolio	Positive Impact for Black Box
Cloud-first and AI-led transformation	High-speed, secure network connectivity	Enterprise Networking, Data Centre Modernisation	Increased project pipeline in cloud connectivity
Cybersecurity and Compliance	Secure infrastructure, access control	Secure Networking, Surveillance, Access Control	Growth in cybersecurity-driven infra deals
Distributed work environments	Seamless workplace collaboration	Modern Workplace, AV & UC Solutions	Recurring business in workplace upgrades
Edge computing and IoT	Decentralised, real-time processing infrastructure	Edge Networks, Industrial IoT Connectivity	Opportunities in industrial automation projects
ESG and sustainability	Green data centres and efficient networks	Energy-efficient Infra Solutions, Smart Buildings	Aligns with client ESG objectives

Summary

The Global IT Services industrys shift toward AI-powered, cloud-centric, and secure digital transformation directly translates into a sustained, multi-year demand for Digital Infrastructure Services. As enterprises reimagine their technology backbones, Black Box Limited through its capabilities in enterprise networking, data centres, secure connectivity, modern workplace solutions and cybersecurity solutions is positioned well to capture this demand. The company stands to benefit from:

Higher project volumes in cloud and AI infrastructure build-outs,

Increasing cybersecurity-related infra demand,

Continued enterprise spend on hybrid work environments,

Managed services driving recurring revenues.

In this environment, Black Box can leverage its global reach and technical depth to emerge as a prominent enabler of the next-generation digital infrastructure ecosystem.

Company Overview

Black Box Limited is a global digital infrastructure integrator delivering solutions across Connectivity Infrastructure, Data Centres, Enterprise Networking, Modern Workplace, and Cybersecurity, along with Technology Products. With a global presence in 35 countries and having over 3,500+ professionals, the Company follows a "Glocal" strategy think global, act local to provide tailored solutions.

The Company serves over 1,100 global customers, including 120+ Fortune 500 companies, supported by 30+ technology partnerships. Black Box has a presence across the United States, Europe, India, Asia Pacific, the Middle East, and Latin America. It serves businesses across financial services, technology, healthcare, consumer and public services, and commercial and industrial verticals.

35+

Countries

Operational Highlights

As of March 31, 2025, Black Box Limited reported an order backlog of US$ 504 million, compared to US$ 470 million in March 2024. The order book is also backed by a strong pipeline, which the management strongly focusses on by improving the conversion rate. This pipeline coupled with a refined sales strategy and focus on improving win rates positions the Company to deliver better top-line growth and greater operating leverage in the years ahead. The Company continues to focus on large deals, with active projects involving hyperscalers, healthcare institutions, public services companies, and many large enterprise customers. Two-thirds of the revenue is typically covered by the order backlog.

The total order book of Black Box strengthened to US$ 504 million in FY 2025 from US$ 470 million in FY 2024, reflecting consistent demand for digital infrastructure solutions. Growth was primarily driven by large-scale data centre projects with global hyperscalers, modernisation initiatives in healthcare and transportation, and a few 5G rollout engagements in India. A deliberate focus on high-value, long-term contracts such as managed services and maintenance agreements further improved revenue visibility. At the same time, the Company consciously exited low-margin, end-tail customers, aligning its order pipeline with strategic priorities.

Strategic Focus and Future Outlook

Black Box remains focussed on profitable growth by deepening relationships with its top 300 customers, expanding wallet share, and acquiring new high-value clients. Its pivot to industry-specific verticals and practice-led solutions ensures tailored offerings for financial services, healthcare, technology, consumer and public services, and commercial and industrial sectors. The Company is investing in hyperscale data centres, cloud, AI-enabled networking, and cybersecurity solutions, supported by strategic alliances with leading technology partners. Looking ahead, Black Box expects a stronger pipeline conversion, with profitability driven by cost optimisation, operating leverage, and improved revenue quality. The Company has set a clear medium-term goal of achieving double-digit EBITDA margins by FY 2027, positioning itself to capitalise on the structural demand for digital and AIled infrastructure.

OPPORTUNITIES AND CHALLENGES

Opportunities

1. Cl oud and Hybrid Infrastructure Expansion

As enterprises continue to migrate from traditional IT systems to cloud and hybrid environments, there is a growing need for seamless integration, modernisation of data centres, and management of multi-cloud deployments. This trend creates significant opportunities for Black Box to deepen its role as a trusted partner by offering end-to-end infrastructure services that enable businesses to achieve agility, scalability, and cost efficiency.

2. AI, Automation, and Edge Computing

The rapid adoption of AI, the proliferation of IoT devices, and the increasing demand for real-time analytics are fuelling the need for edge computing and automation-enabled infrastructure. Black Box has the opportunity to design, deploy, and manage AI-ready networks and edge ecosystems that empower enterprises to harness next-generation technologies for improved efficiency and customer experience.

3. Cybersecurity and Compliance Services

With the escalation of cyber threats and tightening of global data protection regulations such as GDPR in Europe, CCPA in the United States, and the DPDP Act in India, enterprises are prioritising secure and compliant digital ecosystems. Black Box is well-positioned to capitalise on this shift by expanding its managed cybersecurity services, embedding compliance readiness into infrastructure solutions, and ensuring clients can operate with confidence in a highly regulated environment.

4. Enterprise Digital Transformation

As organisations across industries accelerate their digital-first strategies post-pandemic, the for workplace modernisation, unified communication systems, and customer engagement platforms has risen sharply. This presents Black Box with the opportunity to position itself as a strategic transformation partner, delivering integrated digital workplace solutions that enhance productivity, collaboration, and operational resilience.

5. Growth in Indias GCC and Digital Infrastructure

Market

India has emerged as a global hub for multinational corporations through the rapid growth of Global Capability Centres (GCCs), which are driving significant investments in networks, data and collaboration platforms. Black Box is uniquely placed to serve this fast-expanding market by providing advanced digital infrastructure solutions that support the scalability and efficiency needs global enterprises operating out of India.

6. 5G Rollouts and Smart Infrastructure

The rollout of 5G across the United States, Europe, and India is creating demand for high-bandwidth, low-latency networks that can support applications such as Industry 4.0, connected healthcare, and smart facilities. Black Box has an opportunity to play a central role in this transformation by delivering network modernisation, private 5G deployments, and intelligent infrastructure that enable businesses and communities to leverage the full potential of next-generation connectivity.

7. Sustainability and Green IT

With ESG commitments becoming central to corporate strategy, enterprises in the US and Europe are increasingly investing in energy-efficient IT and sustainable infrastructure solutions. Black Box can differentiate itself by delivering green data centre solutions, optimising power and cooling systems, and integrating sustainability practices into its service offerings, thereby helping clients meet both their operational and environmental goals.

Threats/Challenges

1. I ntense Competition and Margin Pressure

Certain global giants as well as local/niche players intensifying pricing pressure and commoditisation of certain infrastructure services reducing differentiation could require building strong customer relationships and providing value-added offerings putting pressure on the margins.

2. Supply Chain and Equipment Dependence

Dependence on networking, servers, and data centre hardware exposes the company to supply chain shocks escalating costs and project delivery timelines, thus impacting the business.

3. Regulatory and Geopolitical Uncertainties

Trade restrictions affect technology choices and operating models within each region or countries operating framework. Currency fluctuations and political uncertainties can impact profitability in global contracts.

4. Talent Shortages, High Attrition and Rise in Labour

Costs

The industry could face acute shortage of skilled professionals in cloud, networking, cybersecurity, and AI-driven infrastructure. In the US and Europe, competition for talent with hyperscalers and of consulting firms is intense and could lead to attrition or high cost of attracting the right talent. Demands for rise in salaries in these niche segments could pose talent retention challenges too.

5. Pandemic/disaster/war

War, civil unrest, natural catastrophes, pandemics or other similar uncontrollable events may create operational challenges.

For the fiscal year 2024, Black Box Limited reported consolidated revenue of 5,967 Crore, falling 5% compared to 6,282 Crore in FY 2024. FY 2025 revenue impacted due to subdued order book, as a result of delayed decision-making with some of its large customers, coupled with the Companys strategy to exit the tail customers. However, pipeline strengthened in the second half of the year upon renewed GTM strategy, to focus more on higher value contracts; order backlog reached US$ 504 million at the end of FY 2025 from US$ 470 million at the end of FY 2024.

EBITDA

The Companys EBITDA for FY 2025 reported a year-on-year growth of 24% to 531 Crore, compared to 428 Crore in FY 2024. Stronger EBITDA and margin expansion were led by disciplined and consistent efforts toward enhancing revenue quality, rising share from long-term engagements, and rationalisation of non-core or low-margin activities. For the full fiscal year, EBITDA margins increased by 210 basis points to 8.9%, compared to 6.8% in FY 2024.

Consolidated Financial Performance (FY 2025 vs FY 2024)			( in Crore)
Particulars	FY 2025	FY 2024	Growth YoY
Revenue	5,967	6,282	-5%
EBITDA	531	428	+24%
PAT	205	138	+49%

Key takeaway: While revenue dipped in FY 2025 due to order book delays and customer realignments, the company delivered record EBITDA and PAT growth through margin improvement, cost discipline, and a shift to quality revenues.

Consolidated P&L Statement ( in Crore)

Particulars	FY 2025	FY 2024
Revenue from Operations	5,967	6,282
Gross Profit	1,794	1,714
gin Mar GrossProfit	30.1%	27.3%
Gain on foreign currency transaction (net)	-7	2
Total Other Expenses	1,256	1,288
EBITDA	531	428
EBITDA Margin	8.9%	6.8%
Other Income	5	19
Gain/(Loss) on cashflow hedges	-1	3
Depreciation (as per IND AS 116)	113	114
EBIT	422	336
EBIT Margin	7.1%	5.3%
Particulars	FY 2025	FY 2024
Finance Cost (as per IND AS 116)	145	141
Loss on fair valuation of deferred purchase consideration	0	0
Exceptional Item Gain/(Loss)	-66	-40
Profit	212	156
Tax	7	19
PAT	205	138
PAT Margin	3.4%	2.2%
Basic EPS	12.16	8.20
Consolidated Balance Sheet
Asset-light with low leverage
		( in Crore)
Particulars	FY 2025	FY 2024
Non-Current Assets
Property, Plant and Equipment	102	120
Right of Use Asset	254	291
Goodwill	335	334
Other Intangible Assets	77	63
Investment accounted for using the equity method	33	32
Financial Assets	23	35
Tax Assets (net)	28	32
Other Non-Current Assets	89	57
Total Non-Current Assets
Current Assets
Inventories	210	246
Trade Receivables	567	386
Cash and Cash Equivalents	229	223
Financial Assets	549	508
Contract Assets	219	246
Other Current Assets	357	227
Sub-Total - Current Assets	_,___	_,___
Total - Assets	_,___	_,___
_
Equity and Liabilities		( In Crore)
Particulars	FY 2025	FY 2024
Equity	_	_
Equity Share Capital	34	34
Other Equity	725	447
Total Equity	___	___
Non-Current Liabilities	_	_
Borrowing	633	362
Lease Liabilities	234	267
Equity and Liabilities		( In Crore)
Particulars	FY 2025	FY 2024
Other Financial Liabilities	12	7
Contract Liabilities	41	54
Other Non-Current Liabilities	1	0
Provisions	31	54
Sub-Total - Non-Current Liabilities
Current Liabilities
Borrowing	21	35
Trade Payables	556	722
Lease Liabilities	54	48
Other Financial Liabilities	202	162
Contract Liabilities	459	501
Other Current Liabilities	15	32
Provisions	55	75
Sub-Total - Current Liabilities
Total - Equity and Liabilities
_
Revenue by Geography
Location/Geo	FY 2025	FY 2024
India	7%	6%
Europe	9%	8%
MEA	2%	3%
APAC	9%	5%
Latin America	2%	1%
North America	71%	77%
Revenue by Industry
Industries	FY 2025	FY 2024
Financial Services	22%	22%
Technology	28%	32%
Healthcare	10%	11%
Commercial and Industrial	12%	11%
Consumer and Public Services	18%	15%
Distributors & Others	10%	10%
Segment Revenue		( in Crore)
Business Segment	FY 2025	FY 2024
GSI	5,068.93	5,417.56
TPS	763.73	758.41
Consulting	134.25	105.61
Total

 

Key Ratios			( in Crore)
Particulars	Consolidated		% Change
	FY 2025	FY 2024
Revenue from Operations	5,967	6,282	-5.0%
EBITDA %	8.9%	6.8%	2.1%
Operating Profit Margin (%)	6.0%	4.7%	1.2%
Net Profit Margin before exceptional item (%)	4.5%	2.8%	1.7%
Return on Equity ( ROCE)	33.0%	35.4%	-2.4%
Interest Coverage Ratio	2.46	2.11	16.9%
Debtors Turnover	12.52	15.56	-19.6%
Inventory Turnover	8.06	5.91	36.5%
Current Ratio	1.59	1.19	33.5%
Debt Equity Ratio	0.86	0.83	3.8%

Reasons for movement in ratios greater than 25%

- Inventory turnover ratio and Current ratio has improved due to better Working Capital management.

Risk Management

Risk area	Risk description	Mitigation measures
Business Legal & Statutory Compliances	• The Company may face economic downturns and industry slowdowns, which can negatively impact revenue and cash flow. • Intellectual property infringement threatens competitiveness and may lead to legal disputes. • Non-compliance with SOPs can result in operational inefficiencies. • There is a potential risk of non-compliance with various regulatory laws across different jurisdictions, including the Indian Companies Act and data protection regulations such as GDPR, CCPA, and ITAA. These non- compliances may result in fines, legal actions, and loss of stakeholder trust. • Additionally, there are risks related to non- compliance with Anti-Bribery and Corruption Laws, including the US FCPA and UKBA.	• The Company is continuously monitoring market trends and engaged in quarterly strategy discussions, while a dedicated team oversees the pricing. • Intellectual property is protected through registration and regular audit. • SOPs are being updated and communicated to all employees to ensure adequate adherence to standard procedures. • The Company regularly reviews and updates policies to align with regulatory requirements, ensuring active board involvement in compliance oversight. • A dedicated compliance team monitors adherence, supported by ongoing audits and the use of technology for regulatory updates. • Specific measures are implemented for data protection, anti-bribery, and related party transactions, including employee training and transparent reporting mechanisms.

 

Risk area	Risk description	Mitigation measures
IT & Cyber Security	• The Company may face risks of cybersecurity threats, including hacking, phishing, and ransomware, which can lead to data breaches and financial losses. • Data loss from hardware failures or human error can disrupt operations, while risks from theft and inadequate controls over IT assets further increase vulnerabilities. • Additionally, an inadequate and robust business continuity plan may result in supply chain disruptions and productivity losses.	• The Company regularly reviews and updates its cybersecurity policies, incident response, and business continuity plans to effectively address cybersecurity incidents. • Implementation of antivirus software, firewalls, and regular cybersecurity audits are in place to enhance defences. • Access controls are enforced to prevent unauthorised data modification, alongside a robust data backup and recovery strategy. • Employee trainings on security protocols and reporting procedures are imparted regularly.
Human Resource	• The Company may face risks around a lack of succession planning, which can create leadership gaps and disrupt business continuity. • Challenges in attracting and retaining skilled employees may lead to talent shortages and knowledge gaps.	• The Company assesses critical leadership roles and the competencies needed for effective succession planning. • Talent development programmes, including mentorship and training, are implemented to prepare high-potential employees for future leadership positions. • Regular talent reviews ensure potential successors are ready and development plans are adjusted as needed • Competitive benefits are offered to attract top talent and to support employee growth within the organisation.
Health, Safety and Environment	• The Company may face risks from non- compliance with health and safety regulations, leading to workplace accidents, reputational damage, and increased insurance costs. • Additionally, insufficient community engagement and a lack of a sustainable growth strategy may negatively impact relationships with local communities.	• The Company promotes a culture of health and safety, encouraging hazard reporting and participation in safety initiatives. • Health & safety policies are communicated to all employees, supported by ongoing training and regular audits to address non-compliance. • Focus on Corporate Social Responsibility (CSR) aims to support projects for improving health and livelihoods.
Operations	• Deviations from customer-required technical specifications can cause project delays and non-compliance with contracts. • Breaches of contract or disputes with third parties may disrupt business operations.	• There is always a detailed project scope document to outline objectives, deliverables, and timelines, providing a clear framework for projects. • A formal change control process is in place to document and assess proposed changes before approval, along with regular communication with stakeholders to ensure alignment on project goals. • All contracts are reviewed by legal professionals, and clear dispute resolution mechanisms is established.
Procurement & Supply Chain Management	• Reliance on select third-party vendors for critical components poses risks if they fail to deliver. • Poor quality materials can result in installation failures and damage the Companys reputation. • Further, abnormal change requests or delayed delivery by the supplier can cause cost escalations and project delays, impacting customer timelines and may lead to liquidated damages.	• Regular assessments of vendors is carried out to evaluate their financial stability and compliance with quality standards, supported by detailed contracts outlining expectations and penalties. • Contingency plans are created for alternative sourcing, and change requests are in approvals are obtained at multiple levels. • Delivery lead times are incorporated in the vendor contract, and customers are kept informed about the timelines.
Finance & Treasury	• The Company may face risks of fluctuations• The Company has a natural hedge at a in foreign exchange rates affecting forex- denominated assets and liabilities. • Capital constraints may hinder the ability to convert assets into cash or meet short- term obligations. • Customers and debtors may fail to fulfil their financial commitments, resulting in losses.	consolidated level due to the global nature of business operations. • Maintaining adequate cash reserves and conducting thorough due diligence on customers will help ensure the timely collection of receivables. • Credit assessments are performed before onboarding customers, with continuous monitoring of their credit limits
Sales	• High dependency on select customers or particular segments for a notable portion of revenue may impact sales, margins, and volume.	• Practice team continuously explores the market to introduce new products & services to improve the revenue and margin. • Fostering strong relationships with a diverse range of customers to enhance loyalty and to reduce the risk of losing key accounts is part of the overall sales strategy. • Customer satisfaction survey conducted on an annual basis and reported to the board. The financial health of key customers is assessed regularly.
Geopolitical Riks	• Geopolitical tensions such as wars, tariffs, sanctions, etc., may affect the Companys operations in Global markets.	• Monitor the geopolitical risk periodically. • Develop a crisis management plan that includes protocols for responding to geopolitical events, including communication strategies for stakeholders. • Attempt to diversify suppliers and partners across different regions to mitigate the impact of tariffs or sanctions on specific countries.

 

Human Resources

Five Key Pillars

Black Boxs unwavering focus on its people and their development forms the foundation of its talent strategy, which is central to the companys transformation journey. This strategy is crafted to deliver tangible business value by aligning all HR functions to build a scalable and future-ready organisation. By unlocking human potential and fostering meaningful impact, Black Box remains resilient and agile in a fast-changing business landscape. The strategy is anchored in five key pillars; each thoughtfully designed to enhance performance and drive sustainable outcomes.

• O rganisation Effectiveness • Employee Experience and Engagement • Attracting Top Talent • Upskilling and Development • Cohesive Culture

The Organisational Development and Effectiveness pillar aims to strengthen Black Boxs overall health, agility, and performance. It aligns structure, culture, and capabilities with the companys growth ambitions, ensuring adaptability in a dynamic environment. Leveraging data-driven insights, leadership development, and change management, this approach cultivates a high-performance culture that empowers individuals and teams. Simultaneously, the Talent Attraction strategy has brought in seasoned leaders and skilled professionals across regions and practices, with over 650 new hires onboarded this fiscal year to support evolving customer needs and business growth.

Black Box also prioritises employee experience through integrated programmes that promote purpose, meritocracy, and belonging. Initiatives spanning onboarding, career development, recognition, and well-being ensure employees feel valued and aligned with company goals. Feedback-driven actions and a culture of transparency have significantly boosted satisfaction, as seen in the ‘Every Voice Matters survey. Complementing this, the Learning and Development strategy offers personalised learning paths and structured programmes to help employees stay competitive and future-ready. In FY 2025, a total of 24,196 learning hours were provided. Finally, the cohesive culture strategy embeds core values into daily practices, fostering collaboration, agility, and a purpose-driven environment that attracts and retains top talent.

The company has a total workforce of over 3,500 people of 52 nationalities spread across 35 countries.

Internal Control Systems

Black Box has a robust internal control framework designed to safeguard its assets, prevent unauthorised use or disposition, and ensure that all transactions are properly authorised, recorded, and reported. The Company follows a comprehensive process that includes internal audits, management reviews, and well-documented policies, guidelines, and procedures to maintain the accuracy and reliability of its financial records.

The Company has deployed an integrated SAP ERP platform, linked with Salesforce (SFDC), Oracle HCM, ServiceNow, and attendance management systems across its entities, including Black Box Corporation US. These system-based checks and controls enhance the overall efficiency and effectiveness of the internal control environment.

Management has evaluated the effectiveness of the Companys internal control over financial reporting, in line with Regulation 17 of the SEBI LODR Regulations, 2015, as of March 31, 2025. The Statutory Auditors, M/s. M S K A & Associates, have audited the financial statements included in this Annual Report and issued their report on internal control over financial reporting, as required under Section 143 of the Companies Act, 2013.

The internal audit function operates independently and regularly reviews the Companys operations. Internal audit findings and recommendations are reviewed by senior management and the Audit Committee. Empowered by the Board, the Audit Committee is authorised to investigate matters related to internal controls and audits. It also ensures adherence to internal control systems and reviews quarterly, half-yearly, and annual financial statements before submission to the Board.

Cautionary Statement

This Management Discussion and Analysis (MD&A) report may contain certain statements that constitute forward-looking information within the meaning of applicable securities laws and regulations. Such statements, which may include but are not limited to the Companys objectives, projections, estimates, expectations, and forecasts, are inherently subject to risks and uncertainties. These forward-looking statements are based on assumptions regarding anticipated future events and conditions; however, actual outcomes may differ materially due to various internal and external factors that are beyond the Companys reasonable control. Accordingly, no assurance can be given that such expectations will prove to be correct.

The Company expressly disclaims any obligation to publicly update, amend, or revise any forward-looking statements contained herein, whether as a result of new information, future events, or otherwise, except as required by applicable law. Readers are cautioned that the risk factors described in this report are not exhaustive and should not be construed as a comprehensive assessment of all potential risks associated with the Companys operations. Investors and stakeholders are advised to exercise independent judgement and consult their own advisors when evaluating the information presented in this MD&A.