⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
NETWEB - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.8
| Stock Code | NETWEB | Market Cap | 18,725 Cr. | Current Price | 3,306 ₹ | High / Low | 4,480 ₹ |
| Stock P/E | 105 | Book Value | 102 ₹ | Dividend Yield | 0.08 % | ROCE | 32.4 % |
| ROE | 23.9 % | Face Value | 2.00 ₹ | DMA 50 | 3,236 ₹ | DMA 200 | 2,863 ₹ |
| Chg in FII Hold | -1.27 % | Chg in DII Hold | -0.27 % | PAT Qtr | 73.3 Cr. | PAT Prev Qtr | 31.4 Cr. |
| RSI | 54.6 | MACD | -23.5 | Volume | 25,48,572 | Avg Vol 1Wk | 13,30,481 |
| Low price | 1,252 ₹ | High price | 4,480 ₹ | PEG Ratio | 1.46 | Debt to equity | 0.03 |
| 52w Index | 63.6 % | Qtr Profit Var | 147 % | EPS | 31.4 ₹ | Industry PE | 25.7 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT surged from 31.4 Cr. to 73.3 Cr. (+147%), showing strong earnings momentum. EPS at 31.4 ₹ reflects improving profitability.
- Margins: ROCE at 32.4% and ROE at 23.9% highlight strong efficiency and shareholder returns.
- Debt: Debt-to-equity ratio of 0.03 indicates negligible leverage, strengthening financial stability.
- Cash Flow: Dividend yield of 0.08% is very low, suggesting reinvestment focus rather than shareholder payouts.
💹 Valuation Indicators
- P/E Ratio: 105 vs Industry PE of 25.7 → Extremely overvalued compared to peers.
- P/B Ratio: Current Price (3,306 ₹) / Book Value (102 ₹) ≈ 32.4 → Very high, signals premium valuation.
- PEG Ratio: 1.46 → Fair, suggesting valuation is expensive relative to growth.
- Intrinsic Value: Current price trades well above fair value, limiting near-term upside.
🏭 Business Model & Competitive Advantage
- Netweb Technologies operates in high-performance computing, AI infrastructure, and cloud solutions.
- Strong positioning in niche technology segments provides competitive advantage.
- Low debt and high return ratios strengthen long-term sustainability, though valuations remain stretched.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between 2,800 ₹ – 3,000 ₹, closer to DMA 200 support levels.
- Long-Term Holding: Suitable for growth-oriented investors seeking exposure to AI and HPC. Staggered buying recommended due to high valuations and volatility.
✅ Positive
- Quarterly PAT growth (+147%) shows strong earnings momentum.
- High ROCE (32.4%) and ROE (23.9%) highlight efficiency.
- Debt-to-equity ratio of 0.03 ensures financial resilience.
⚠️ Limitation
- Extremely high P/E (105) and P/B (32.4) ratios indicate stretched valuations.
- Dividend yield of 0.08% is negligible, limiting passive income appeal.
- MACD at -23.5 suggests weak near-term momentum.
📉 Company Negative News
- FII holding decreased by 1.27%, showing reduced foreign investor confidence.
- DII holding decreased by 0.27%, reflecting lower domestic institutional support.
📈 Company Positive News
- Quarterly PAT rose significantly from 31.4 Cr. to 73.3 Cr.
- Strong EPS growth supports long-term potential.
- Debt-free operations enhance financial stability.
🌐 Industry
- Technology and AI infrastructure sector benefits from rising demand for cloud, HPC, and AI solutions.
- Industry PE at 25.7 suggests Netweb trades at a steep premium, reflecting growth expectations.
🔎 Conclusion
Netweb Technologies demonstrates strong fundamentals with high return ratios, negligible debt, and robust earnings growth. However, valuations are stretched with extremely high P/E and P/B multiples. Investors may consider entering around 2,800–3,000 ₹ for long-term holding, with staggered buying to manage volatility. The company remains strategically well-positioned in AI and HPC but requires caution due to premium pricing.
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