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Netweb Technologies India Ltd (NTL) is one of India’s leading High-end Computing Solutions (HCS) provider, with fully integrated design and manufacturing capabilities. Their HCS offerings comprises (i) high performance computing (Supercomputing / HPC) systems; (ii) private cloud and hyperconverged infrastructure (HCI); (iii) AI systems and enterprise workstations; (iv) high performance storage (HPS / Enterprise Storage System) solutions; (v) data centre servers; and (vi) software and services for their HCS offerings. Netweb Technologies is one of India’s leading Indian origin owned and controlled OEM in the space of HCS providing Supercomputing systems, private cloud and HCI, data centre servers, AI systems and enterprise workstations, and HPS solutions.

They develop homegrown compute and storage technologies, deploy supercomputing infrastructure to meet the rising computational demands of businesses, academia, and research organisations, particularly, under India's National Supercomputing Mission. Further, thus far, 3 of their supercomputers have been listed 11 times in the world's top 500 supercomputers

NTL’s proposed issue size is INR 610 cr out of which INR 206 cr is a fresh issue and the remaining INR 425 cr is OFS. The proposed fresh issue will be utilized for

INR 32.3cr for funding capital expenditure requirements for: o Civil construction of the building for the surface mount technology (SMT) line and interior development; and o Purchase of equipment/machineries for its new SMT production line (SMT Line);

• INR 128cr for funding long-term working capital requirement

• INR 22.5 cr for repayment or pre-payment, in full or in part, of certain of its outstanding borrowings

• And the balance amount would be used for general corporate purposes

At the IPO price of INR 500 (upper price band), NTL is valued at P/E of 59.9x. Considering the growth opportunities in the company, strong fundamentals, and robust product portfolio we recommend a SUBSCRIBE rating

Financial Analysis

The performance in FY21 showed a turnover of INR 144.29 cr and a net profit of INR 8.23 cr. However, in FY22, the company experienced a substantial increase in turnover to INR 247.94 cr, representing a growth of approximately 72%. The net profit also rose significantly to INR 22.45 cr, indicating a growth rate of around 173%.

In the most recent fiscal year, FY23, NTL's performance continued to improve. The company achieved a turnover of INR 445.65 cr, marking an impressive growth rate of approximately 80% compared to the previous year. The net profit also saw substantial growth, reaching INR 46.94 cr, representing a growth rate of around 109%.

These remarkable growth rates can be attributed to several factor. One key factor is cost optimization, which likely contributed to improved profitability.

NTL's ability to achieve such significant growth in both turnover and net profit showcases its effective operational strategies and successful implementation of business plans.

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