Pune: How quickly can a manufacturing company turn a complex tender into a winning bid? Zetwerk claims its AI-powered technology can cut one crucial step from three to four days to just 10 minutes.
However, as the company’s order book expands faster than its manufacturing revenue, a bigger question emerges: can its factories keep pace with the business it is winning?
Zetwerk is increasingly turning to artificial intelligence to accelerate its manufacturing operations, with its AI-powered tender tool, ZetSpec, reportedly reducing bill-of-materials (BOM) preparation time from three to four days to just 10 minutes.
However, faster workflows are only one part of its growth challenge, with manufacturing capacity emerging as a key constraint.
The contrast, highlighted in Zetwerk’s September-quarter investor presentation, offers a closer look at how the manufacturing company is integrating AI into its business.
While technology is helping teams process complex requirements and prepare bids faster, the company is also working to expand production capacity through third-party manufacturing partners and its own facilities.
Zetwerk’s AI strategy is therefore focused on supporting its existing manufacturing operations rather than building a standalone software business.
Its latest disclosures highlight two platforms, ZetSpec and Zeus, designed to improve productivity and enable business teams to develop technology solutions with limited engineering involvement.
Zetwerk’s ZetSpec Uses AI to Cut BOM Preparation From Days to Minutes
One of the key technology developments highlighted by Zetwerk is ZetSpec, an AI-powered tool designed to read complex tender documents and generate bills of materials.
A bill of materials is a detailed list of components, raw materials and other inputs required to manufacture a product or execute a project. Preparing these lists can involve analysing extensive technical documentation and engineering requirements.
Zetwerk says ZetSpec can reduce this process from three to four days to approximately 10 minutes. By accelerating BOM preparation, the company expects to help its teams prepare bids faster and improve their ability to secure additional orders.
However, the 10-minute figure is a company-reported productivity claim and has not been independently verified.
Zetwerk’s investor presentation does not disclose the number of tenders tested, error rates, the time required for human verification or the number of additional orders directly attributable to the tool.
Importantly, the reported time reduction applies to BOM generation and not the entire tendering, bidding or manufacturing process.
The company has also highlighted Zeus, an AI application and agent platform that allows business teams to build technology tools with limited involvement from engineering teams.
According to Zetwerk, its teams have shipped 12 self-service applications through Zeus over the past six months, while another 24 prototypes are undergoing testing.
While these figures indicate internal adoption of the platform, the company has not quantified any external revenue generated by ZetSpec or Zeus.
Zetwerk’s Order Book Grows Faster Than Manufacturing Revenue
The growing adoption of AI tools comes as Zetwerk faces a different operational challenge: converting its expanding order book into manufacturing revenue.
The company’s manufacturing order book reached ₹14,595 crore at the end of September, registering 67% growth compared with the corresponding period last year.
New manufacturing orders during the first half of FY27 increased 48% to ₹7,760 crore. However, manufacturing revenue grew at a slower pace of 20%, reaching ₹4,448 crore.
Zetwerk said its order book typically converts into revenue over approximately two years.
The company acknowledged the gap between order growth and revenue conversion in its investor presentation.
“Order Backlog is growing faster than revenue; we are a supply constrained business,” the management stated, adding that capacity needed to increase through both third-party partners and captive facilities.
Zetwerk operates through a combination of third-party manufacturing partners and its own manufacturing facilities.
Its latest company disclosures identify 6,979 third-party suppliers across 26 countries and 26 owned manufacturing facilities across India, the US, Spain and Germany.
The company also operates Terra91, its industrial-commodities sourcing business.
For Zetwerk, expanding this manufacturing ecosystem is central to addressing the supply constraints identified in its latest investor presentation.
Design-Led Manufacturing and Product Mix Support Margin Growth
Alongside technology adoption and manufacturing capacity expansion, Zetwerk is focusing on improving its product mix and increasing the contribution of design-led manufacturing.
Management attributed improvements in manufacturing margins to a combination of better product mix, international customers, design-led products and in-house production.
The manufacturing segment’s gross margin increased to 24.5% in the first half of FY27, compared with 20.9% in the corresponding period a year earlier.
Original Design Manufacturing (ODM) products accounted for 33% of Zetwerk’s backlog at the end of the first half of FY27.
The company plans to strengthen its engineering team to expand its design-led manufacturing business while embedding AI across its operations.
This strategy combines engineering capabilities, manufacturing infrastructure and technology adoption to support the company’s efforts to move towards higher-value manufacturing opportunities.
Zetwerk Financial Results: Revenue and Adjusted EBITDA Rise, But Net Loss Continues
Zetwerk’s financial performance during the first half of FY27 reflects growth in revenue and company-defined adjusted EBITDA, although the group continues to report a consolidated net loss.
Consolidated revenue from operations increased 33% to ₹8,717 crore during the first half of FY27.
Company-defined adjusted EBITDA rose 69% to ₹274 crore during the same period. However, this measure excludes share-based payment expenses and should not be interpreted as statutory net profit.
For the September quarter, Zetwerk reported a consolidated net loss of ₹88.1 crore, compared with a loss of ₹61.6 crore in the corresponding quarter last year.
The quarterly loss was lower than the preceding quarter’s ₹733 crore. However, the earlier quarter included a provision of ₹639 crore related to the discontinued civil-infrastructure operations.
Consequently, the sequential reduction in losses should not be interpreted as evidence of an AI-led financial turnaround.
Cash Flow Also Remains a Concern
Zetwerk’s operating cash outflow narrowed to ₹675.2 crore in the first half of FY27, compared with ₹1,260.5 crore in the corresponding period a year earlier.
Although the outflow reduced significantly, the company continued to report negative operating cash flow.
For Zetwerk, which listed on October 23, the next phase of growth will depend on more than the speed at which software can process tender documents or generate component lists.
The bigger test will be whether its investments in manufacturing capacity, engineering capabilities and AI-powered workflows can translate into timely deliveries, sustained margin improvement and stronger cash generation.
