NETWEB - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.0

📊 Fundamental Analysis

Strengths

High ROE (23.9%) & ROCE (32.4%): Strong indicators of profitability and efficient capital deployment.

Low Debt-to-Equity (0.01): Virtually debt-free — excellent for long-term stability.

EPS of ₹22.8: Solid earnings base for a mid-cap tech player.

Quarterly Profit Doubled: PAT growth of 100% signals strong operational momentum.

Strong Technicals

RSI at 68.3: Near overbought, but still bullish.

MACD positive (49.7): Momentum favors upside.

Price above both 50 DMA (₹1,875) and 200 DMA (₹1,925): Technically strong.

Concerns

Very High P/E (93.6) vs Industry (32.0): Valuation is steep — priced for perfection.

PEG Ratio (1.30): Slightly above ideal (<1), suggesting growth may not fully justify valuation.

Decline in PAT: From ₹42.6 Cr to ₹30.5 Cr — needs monitoring.

FII & DII Selling: Institutional investors trimmed positions — sentiment risk.

Minimal Dividend Yield (0.09%): Not suitable for income-focused investors.

💡 Is It a Good Long-Term Investment?

Yes — with caution. Netweb Technologies is a high-growth, niche tech player with excellent profitability and almost no debt. However, the valuation is aggressive, and recent institutional selling plus PAT dip warrant close monitoring.

🎯 Ideal Entry Price Zone

Fair Value Zone: ₹1,850–₹1,950 This range aligns with DMA levels and offers a more reasonable entry given current valuation.

Aggressive Entry: ₹1,600–₹1,750 If broader tech correction occurs, this zone offers deeper value with lower downside risk.

🧭 Exit Strategy / Holding Period

If you already hold the stock

Holding Period: 3–5 years to capture long-term tech growth and potential re-rating.

Exit Strategy

Partial Exit near ₹2,900–₹3,000 if valuation stretches further without earnings support.

Full Exit if PEG rises above 2.0 or ROE drops below 18%.

Re-evaluate if RSI crosses 75 or MACD turns negative — could signal short-term peak.

Would you like a comparison with other high-growth tech stocks like Tata Elxsi or Route Mobile to assess relative valuation and scalability?

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