Netweb Technologies reports record Rs 11,584m revenue in FY25; AI-led growth spurs strategic momentum despite stock valuation overhang

Why Did Netweb Technologies Report Record Revenue and Profit in FY25?

Netweb Technologies India Limited, one of India’s leading original equipment manufacturers specialising in high-end computing solutions, has reported its highest-ever revenue and profit for both the fourth quarter and the full fiscal year ending March 31, 2025. The audited financials, released on May 3, 2025, demonstrate a combination of strong operational execution, AI-led product demand, and favourable macroeconomic incentives via government-backed localisation policies.

For the fourth quarter, Netweb posted an operating income of ₹4,146.5 million, marking a 55.9 percent growth over the same period last year. Quarterly profit after tax rose to ₹429.9 million, up 45 percent year-on-year, while EBITDA stood at ₹597.7 million, representing a margin of 14.4 percent. For the full fiscal year, Netweb’s total income reached ₹11,584.1 million, a 57.4 percent increase over FY24. Operating EBITDA for the year totalled ₹1,600.1 million, while annual PAT grew 50.8 percent to ₹1,144.8 million. Diluted earnings per share increased to ₹20.24 from ₹13.88 in FY24, indicating improved profitability on a per-share basis. The Board of Directors has proposed a final dividend of ₹2.5 per share, subject to shareholder approval, translating into a payout ratio of 12.4 percent.

How Did Netweb’s AI and HPC Segments Drive Financial Upside?

Much of the company’s financial success in FY25 can be attributed to the dramatic expansion of its artificial intelligence systems business, which recorded a 112 percent year-on-year growth. This segment alone contributed 14.8 percent of Netweb’s operating revenue, validating the company’s strategy to embed itself within India’s fast-growing AI infrastructure economy. The launch of Skylus.ai, a GPU-based AI platform that simplifies resource management and deployment, has enabled the company to provide tailored infrastructure for AI inference, training, and development across enterprises and research institutions.

Beyond AI, Netweb reported continued strength in high-performance computing, private cloud architecture, enterprise workstations, and high-performance storage systems. Its client base spans government research centres, educational institutions, defence departments, banking and financial services, and IT services companies. This diversification has allowed the company to capture demand across several verticals undergoing digital infrastructure upgrades. The integrated design-to-delivery model, including in-house assembly and product development from its Delhi-NCR facility, has helped Netweb differentiate itself from global peers and align with national self-reliance goals.

What Role Did Government Policy and PLI Play in Netweb’s FY25 Growth?

Government initiatives played a material role in enhancing Netweb’s competitive edge during the fiscal year. Notably, the company received ₹59.4 million under the second iteration of the Production-Linked Incentive Scheme for IT hardware. This claim, covering the period from July 2023 to March 2024, validated Netweb’s eligibility for policy-driven incentives aimed at boosting domestic manufacturing capabilities.

Netweb’s strong alignment with the Make in India initiative has opened up new opportunities in public procurement and sovereign infrastructure projects. The company continues to invest in capability-building across its value chain, including engineering design, manufacturing automation, and process digitisation. Its implementation of SAP S/4 HANA across internal systems has improved enterprise resource planning and operational transparency, ensuring scalability as demand increases.

How Has Netweb Technologies Stock Performed on the Bourses?

Despite robust business performance, Netweb Technologies’ stock has witnessed considerable volatility in recent months. As of May 2, 2025, the company’s shares closed at ₹1,421.70 on the National Stock Exchange, reflecting a daily gain of 0.73 percent. However, over a six-month period, the stock has declined 46.21 percent and is down 19.43 percent on a year-on-year basis. These corrections have come despite consistent earnings growth and may reflect broader concerns around valuation excesses in mid-cap tech stocks.

The stock currently trades at a trailing twelve-month price-to-earnings ratio of 78.50, well above the sector average of 18.85, indicating significant premium pricing. The price-to-book ratio stands at 18.96, further suggesting elevated valuation levels relative to its underlying assets. Analysts interpret this as a sign that the market had priced in aggressive future growth, leaving little room for negative surprises or slower-than-expected earnings ramp-up. As a result, some institutional investors have opted to book profits, particularly those who entered during the post-IPO rally.

What Do Institutional Flows and Analyst Coverage Reveal?

Netweb’s March 2025 quarter shareholding data offers a mixed view of institutional sentiment. Foreign Institutional Investors slightly reduced their holdings from 11.10 percent to 10.67 percent, while Domestic Institutional Investors increased their stake from 5.23 percent to 5.34 percent. Within the domestic category, mutual funds raised their shareholding marginally from 4.95 percent to 5.07 percent. Interestingly, the total number of FII and FPI entities increased from 119 to 126 during the quarter, indicating broader but thinner participation.

Analyst coverage remains limited given the company’s recent listing in July 2023, but the one available research opinion has assigned a “Strong Buy” rating, citing Netweb’s growth visibility, leadership in AI and HPC segments, and operational leverage. Institutional feedback also points to a preference for watching earnings delivery over successive quarters before expanding positions, especially in light of the stock’s current valuation metrics.

Why Are Investors Cautious Despite Strong Fundamentals?

While Netweb’s FY25 numbers showcase strong execution, some investors remain cautious due to the lofty valuation multiples and price volatility. The company’s positioning in niche segments like AI systems and domestic HPC infrastructure does offer long-term upside, but current market pricing assumes continued outperformance without disruptions. Additionally, hardware companies globally face cyclical risks related to component availability, client capital spending cycles, and technology obsolescence. In this context, Netweb’s future revenue consistency and margin preservation will be closely monitored.

Moreover, while government incentives like the PLI scheme offer short-term boosts, the sustainability of such programs and their impact beyond FY26 remain uncertain. Investors are also watching the competitive landscape, as international OEMs seek deeper inroads into India’s growing data infrastructure and AI solutioning market.

What Is the Road Ahead for Netweb Technologies?

Looking ahead, Netweb Technologies is positioned to benefit from increasing investments in sovereign cloud, AI-native computing infrastructure, and indigenous LLM development in India. The company’s strong order book of ₹3,252 million at the end of March 2025 provides near-term revenue visibility. Management continues to prioritise innovation in GPU-based platforms, private cloud optimisation, and custom engineering for mission-critical use cases.

India’s broader push toward digital self-reliance, combined with regulatory incentives favouring domestic players, is expected to support Netweb’s expansion in defence, research, and public sector contracts. The company may also explore overseas opportunities or product adjacencies in edge AI and data centre modularisation to diversify revenue streams.

As operational scale improves and systems like Skylus.ai gain wider adoption, margins may stabilise, giving investors more confidence in forward estimates. However, near-term share price movement is likely to remain sensitive to institutional flows, sector sentiment, and broader mid-cap tech equity trends.

Investment Outlook: Buy, Sell or Hold?

Netweb Technologies has delivered exceptional operational results and is firmly embedded in India’s high-end computing ecosystem. Yet, its elevated P/E ratio and recent stock correction suggest the market is now recalibrating expectations. The fundamentals support a bullish long-term outlook, but the near-term trajectory depends on margin consistency, order execution, and broader sectoral sentiment.

For long-term investors already holding the stock, the prudent strategy may be to hold and track quarterly financial performance, order intake, and institutional activity. New investors may prefer to wait for further valuation correction or evidence of EPS expansion in FY26 before building exposure. Given its strategic positioning and product innovation focus, Netweb remains a strong candidate in the AI and tech hardware segment—but one that warrants close monitoring amid market volatility.