💰 Financial Performance

Revenue Growth by Segment

The AI segment demonstrated explosive growth of 160% YoY in H1 FY26, increasing its revenue contribution from 14.7% to 25.4%. Regular business revenue is guided to grow at 35-40% annually. Total revenue from operations in FY25 was INR 11,490.21 million, a 58.7% increase from INR 7,240.75 million in FY24.

Profitability Margins

Gross margin stood at 23.19% in FY25, down from 24.8% in FY24 due to changes in product mix and procurement volumes. Net profit margin was 9.9% in FY25 compared to 10.48% in FY24. H1 FY26 PAT margin improved slightly to 10.2% with a PAT of INR 619 million, up 49.5% YoY.

EBITDA Margin

EBITDA margin was 14.7% in FY25 (INR 1,694.01 million) and improved to 14.9% in H1 FY26 (INR 903.2 million). Management guides for a sustainable EBITDA margin of 13-14% as the company transitions to large-scale strategic orders, which may have slightly lower margins but offer higher scalability.

Capital Expenditure

The company utilized IPO proceeds to fund a new manufacturing facility for server motherboards and printed circuit boards (PCBs). Total equity grew by 25.4% in FY25, supported by a net cash surplus of INR 1,621.3 million, which provides a buffer for future capex without debt dependency.

Credit Rating & Borrowing

CRISIL Ratings assigned a 'Stable' outlook with an interest coverage ratio exceeding 16.5 times in FY24. Total borrowings were reduced to INR 79.49 million in FY25 from INR 95.73 million in FY24, leading to a 34.1% decline in finance costs.

⚙️ Operational Drivers

Raw Materials

Key raw materials include server motherboards, printed circuit boards (PCBs), and high-end semiconductor components (CPUs/GPUs) sourced from technology partners. These components are critical for building HPC and AI infrastructure.

Import Sources

Not specifically disclosed, but the company relies on global technology leaders like Intel, AMD, and NVIDIA for core compute components.

Key Suppliers

Strategic collaborations are maintained with Intel, AMD, and NVIDIA for the supply of advanced processors and GPUs used in supercomputing and AI systems.

Capacity Expansion

Netweb has established a new facility for the in-house manufacturing of server motherboards and PCBs to enhance vertical integration and reduce dependency on external suppliers. Current unit capacity is not disclosed.

Raw Material Costs

Cost of materials consumed is the primary expense, driving a gross margin of 23.19% in FY25. Inventory levels increased by 94.35% in FY25 to INR values to support the scale-up in business operations and procurement for large orders.

Manufacturing Efficiency

Asset turnover ratio improved significantly to 22.67 times in FY25 from 16.18 times in FY24, reflecting highly efficient utilization of assets to generate increased revenue.

📈 Strategic Growth

Expected Growth Rate

35-40%

Growth Strategy

Growth will be driven by the execution of two large strategic orders worth approximately INR 21,840 million (INR 2,184 Cr), with 1/3rd expected to be executed in FY26. The company is also capitalizing on the 160% YoY growth in the AI segment and its 'Make in India' compliant manufacturing of motherboards and PCBs.

Products & Services

High-Performance Computing (HPC) systems, Private Cloud infrastructure, AI infrastructure, server motherboards, and printed circuit boards (PCBs).

Brand Portfolio

Netweb, Skylus.ai.

New Products/Services

Skylus.ai was launched to revolutionize the AI space and create market traction. The company is also scaling its new motherboard and PCB manufacturing line.

Market Expansion

Targeting the 'AI factory' vision for India by providing sovereign compute capabilities for sensitive sectors like Defence, Telecom, and BFSI.

Market Share & Ranking

Netweb is a prominent player in the Indian HPC and private cloud space, with projects ranked among the Top 500 supercomputers globally.

Strategic Alliances

Intel, AMD, and NVIDIA are key strategic partners for technology updates and component sourcing.

🌍 External Factors

Industry Trends

The industry is shifting toward AI-driven infrastructure and sovereign compute. Netweb is positioned as a leader in this shift, with AI revenue contribution rising to 25.4% of the total in H1 FY26.

Competitive Landscape

Netweb operates in a niche high-end compute market, competing on the basis of indigenous manufacturing and specialized HPC/AI project execution.

Competitive Moat

The moat is built on indigenous design capabilities and strategic partnerships with NVIDIA/Intel. This is sustainable because it allows Netweb to meet strict local manufacturing requirements for government contracts that global competitors cannot easily fulfill.

Macro Economic Sensitivity

Highly sensitive to government 'Make in India' policies and national AI initiatives. The AI segment's 160% growth reflects strong sensitivity to the increasing demand for sovereign data processing.

Consumer Behavior

Customers typically follow 3 to 5-year technology replacement cycles, with 70% of the base currently on 3-year cycles.

Geopolitical Risks

Strict import/export laws and data residency requirements in sensitive sectors like Defence and BFSI could impact the procurement of global components or the eligibility for government tenders.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to strict data residency, cybersecurity, and import/export laws, particularly for clients in the Defence, Telecom, and BFSI sectors.

Environmental Compliance

The company complies with ISO standards for environmental management; specific compliance costs are not disclosed.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the timely execution of the INR 2,184 Cr strategic order book and the rapid 12-18 month technology obsolescence cycle in the AI industry.

Third Party Dependencies

High dependency on NVIDIA, Intel, and AMD for the supply of critical high-end processors and GPUs.

Technology Obsolescence Risk

Technology cycles are short (12-18 months); Netweb mitigates this through R&D and strategic collaborations to ensure its AI infrastructure remains state-of-the-art.

Credit & Counterparty Risk

Receivable days improved to 117 in September 2025, but the company remains exposed to payment delays from large-scale projects, mitigated by a robust collection system.