🟡 At a Glance
Netweb Technologies designs, builds, and delivers India’s most powerful supercomputing systems. It has grown revenue 8x in 5 years and boasts 33% ROCE. But at a ₹10,000 Cr valuation and 87x P/E, is it a high-performance computing story – or a high-priced one?
1. 🧠 Business Model: Supercomputers As A Service (Almost)
Founded in 1999 and headquartered in Faridabad (yes, really), Netweb is one of India’s few original equipment manufacturers (OEMs) in High Performance Computing (HPC).
🛠️ Product Lines:
- Supercomputers (for scientific research, AI, defense)
- Private Cloud & Enterprise Servers
- Edge AI and Storage Solutions
- Workstations, Networking & Racks
It caters to:
- Government research labs
- BFSI & Telcos
- Defense & Aerospace
- IT/ITES firms looking for in-house cloud + AI infra
🏆 Notable flex: 3 of its systems have featured 11 times in TOP500 global supercomputers.
Bonus: It qualifies for both IT Hardware PLI and Telecom PLI. Cashback for computing, basically.
2. 📈 The 5-Year Financial Sprint: From ₹130 Cr to ₹1,150 Cr
| Year | Revenue (Cr) | EBITDA (Cr) | OPM (%) | PAT (Cr) | EPS (₹) |
|---|---|---|---|---|---|
| FY21 | 143 | 14 | 10% | 8 | 14.55 |
| FY22 | 247 | 35 | 14% | 22 | 39.68 |
| FY23 | 445 | 70 | 16% | 47 | 9.22 |
| FY24 | 724 | 103 | 14% | 76 | 13.47 |
| FY25 | 1,149 | 160 | 14% | 114 | 20.21 |
📊 CAGR Stats:
- Revenue CAGR (5Y): 49%
- PAT CAGR (5Y): 96%
- ROCE: Consistently >30%
Only ₹130 Cr in sales in FY20, and now ₹1,149 Cr in FY25. That’s some serious compounding.
3. 🚀 Growth Drivers: Silicon, Servers, and Sovereign Orders
📌 Tailwinds:
- India’s digital infra push (AI labs, defense supercomputing)
- AI/ML boom = demand for compute nodes
- Data localization = demand for on-prem infrastructure
- Strong push from Indian Govt for Atmanirbhar IT hardware
📈 Growth segments:
- Edge AI servers for BFSI and security
- Private Cloud infra (vs hyperscalers like AWS)
- Custom OEM hardware for defense applications
📦 Order Book:
- No formal disclosure, but quarterly sales growth has been >50% YoY in recent quarters
4. 💰 Balance Sheet & Cash Flow: Lean, Mean, and IPO-Funded
| Metric | FY25 |
|---|---|
| Cash from Ops | ₹13 Cr (negative) |
| Capex | ₹112 Cr (investing inflow) |
| Debt | ₹8 Cr (almost debt-free) |
| Reserves | ₹519 Cr |
Notably:
- IPO money fully utilized (monitoring agency confirmed)
- Still cash flow negative from ops due to high receivables – a common B2G trait
🧾 Working Capital Cycle: 84 days. Not ideal, but manageable.
5. 📊 Valuation: High Compute, Higher Expectations
| Metric | Value |
|---|---|
| CMP | ₹1,764 |
| Market Cap | ₹9,985 Cr |
| TTM EPS | ₹20.2 |
| P/E | 87.2x |
| Book Value | ₹93.6 |
| P/B | 18.8x |
| ROE | 24% |
| ROCE | 33% |
🚨 Red Flags:
- Valuation premium > Tata Tech, LTTS, even Affle
- Despite lower scale and lumpy order book
- 87x P/E = market pricing in unbroken growth streak
6. 🔍 Shareholding & Institutions: Institutions are Loading Up
| Shareholder | % Stake (Mar 2025) |
|---|---|
| Promoters | 71.03% |
| FIIs | 10.67% |
| DIIs | 5.34% |
| Public | 12.97% |
📉 Promoter holding has dipped ~4% since IPO
📈 Retail count: jumped from 75k to 1.67 lakh in 18 months
7. 🧮 Fair Value Estimate (FV Range)
Let’s not get carried away by server racks. Let’s compute:
- FY25 EPS = ₹20.2
- Forward growth potential = high (say 25-30% CAGR)
- Reasonable P/E range = 35x (low), 55x (fair), 70x (optimistic)
| Case | EPS (FY26E) | P/E | FV |
|---|---|---|---|
| Bear | ₹25 | 35x | ₹875 |
| Base | ₹28 | 50x | ₹1,400 |
| Bull | ₹30 | 60x | ₹1,800 |
🔵 EduInvesting FV Range: ₹875 – ₹1,800
At ₹1,764 today, stock is priced to perfection.
TL;DR: Desi Nvidia? Or Just High-Voltage Hope?
- Netweb is India’s HPC poster child – profitable, lean, high ROCE
- But it’s also small scale, with lumpy revenue cycles
- 87x P/E leaves no room for earnings error
- Business? Excellent. Stock? Excellent…ly priced
✍️ Written by Prashant | 📅 21 June 2025
Tags: Netweb Technologies, Supercomputers, HPC India, Netweb IPO, high PE stock, Netweb valuation, EduInvesting, Tech manufacturing, Edge AI, AI infrastructure, India digital growth
