Detailed Narrative
Strong FY26 Performance Driven by AI Segment
Netweb Technologies reported a landmark FY26, with revenue from operations growing 90% year-on-year to INR 2,183.6 crores. Profit after tax (PAT) also saw significant growth of 80.9% year-on-year, reaching INR 205.8 crores with a PAT margin of 9.3%. This performance was largely propelled by the AI segment, which grew an impressive 459.6% year-on-year and contributed 43.4% to the total operating revenue for FY26, marking a transformational shift in the company's revenue mix.
Robust Order Book and Pipeline for FY27
The company enters FY27 with a strong order book of INR 2,400 crores, inclusive of L1 orders, as of day one. This comprises INR 1,600 crores in strategic orders, INR 472 crores in organic orders, and INR 327 crores in L1 organic orders. Additionally, Netweb has a substantial pipeline of INR 4,400 crores. Management expects strategic orders to be executed phase-wise over the next three quarters, while organic orders typically have a shipping cycle of 18-20 weeks.
Guidance for Sustainable Organic Growth and Margins
Netweb Technologies provided guidance for 35-40% organic revenue growth over the next couple of years, emphasizing that this excludes strategic orders. The company also aims to sustain its EBITDA margin within the 13-14% range for the same period. This disciplined approach to growth and profitability is supported by a healthy order book and strong demand for high-end computing systems in India, with routine capex for FY27 projected at INR 20-25 crores.
Strategic Inventory Build-up and Working Capital Management
The company's cash conversion cycle stood at 84 days as of March 2026, an improvement from 114 days in December 2025, primarily due to better receivable management. However, inventory days increased to 86 days from 60 days in the previous quarter. This increase is attributed to a strategic build-up of raw material stock to support the execution of large orders and secure key inputs amidst surging global demand for AI compute infrastructure.
Focus on Domestic AI Infrastructure and Capability-Driven Approach
Netweb is prioritizing the domestic market, particularly the sovereign and government-driven AI infrastructure build-out, rather than directly targeting hyperscalers in India. The company emphasizes its capability-driven approach over capacity, with current utilization at 65-70%. A new 15,000 sq ft state-of-the-art manufacturing facility has been commissioned to produce systems not made earlier, increase rack density, and enable liquid-cooled systems, enhancing its ability to meet the growing demand for advanced computing.
Capital Allocation and Liquidity Position
Netweb maintains a net debt-free position with net free cash of INR 83.3 crores as of March 31, 2026. While short-term borrowings increased by INR 270 crores, management clarified these are transitional, primarily for funding strategic orders and adhering to WCDL covenants. The company has recommended a dividend of INR 3 per share and plans for routine capex of INR 20-25 crores for FY27, with no significant capex expansion anticipated.