Netweb Technologies experienced a significant boost in its share price, climbing 10% to an all-time high of ₹2,949.65 per share. The jump follows the company’s impressive second-quarter (Q2) earnings report for FY25. Investors in the share market investment sector took notice of the positive performance, pushing trading volumes higher.
Approximately 6 lakh shares exchanged hands on both the BSE and NSE on Monday, compared to the average weekly volume of 2 lakh shares, signalling a heightened interest in the stock.
Strong Q2 results propel Netweb Technologies
Netweb Technologies reported a strong financial performance for Q2FY25, with net profits surging to ₹25.72 crore, marking a 69.8% year-on-year (YoY) growth compared to ₹15.14 crore in the same period last year. On a quarter-on-quarter (QoQ) basis, the company's profit grew by an impressive 66.5% from ₹15.44 crore in the June quarter. This solid growth was a key factor in the increased share market investment in the stock.
The company also saw its total income reach ₹253.11 crore for the quarter, reflecting a 71% growth YoY and a 65.2% rise QoQ. Netweb’s expanding income and profits are attributed to its strategic focus on the rapidly growing artificial intelligence (AI) sector, which played a pivotal role in the company’s financial success.
AI systems drive revenue growth
One of the standout contributors to Netweb Technologies' success in Q2FY25 was its AI systems segment. Income from AI systems grew by a staggering 229% YoY, increasing its share of the company’s overall operating revenue to 14.8%. This surge underscores the critical role AI now plays in Netweb’s business strategy.
Sanjay Lodha, Chairman and Managing Director of Netweb Technologies, commented on the company's AI-driven growth: “AI has rapidly become a pivotal contributor to our revenue, growing its share to ~15% in H1FY25, with a 193% YoY increase. Fuelled by innovation, this strong growth highlights AI's role as a cornerstone of our business strategy and our future growth.” This statement resonated well with those involved in share market investment, further driving the stock’s price.
Growing order book and strong EBITDA performance
In addition to robust revenue growth, Netweb Technologies' order book expanded to ₹369.7 crore as of September 2024, compared to ₹217.4 crore in the previous year. This substantial growth reflects increased demand for the company’s offerings, especially in the AI sector, which remains a major area of focus for future expansion.
At the operational level, the company reported a significant increase in earnings before interest, tax, depreciation, and amortisation (EBITDA). EBITDA for Q2FY25 rose by 69.7% to ₹37.76 crore, compared to ₹22.25 crore in the same quarter last year. Despite this, the EBITDA margin slightly narrowed by 12 basis points (bps) to 14.9% YoY.
Investors with a keen eye on share market investment were particularly interested in this operational growth, seeing it as a sign of long-term stability.
Stock performance and future outlook
The stock price of Netweb Technologies has witnessed a significant rally, rising by over 17% in the last three months. The company has delivered multibagger returns of more than 135% year-to-date (YTD) and over 215% in the past year, cementing its position as a key player in the small-cap market. This performance has made Netweb Technologies a top choice for many engaged in share market investment.
The company’s recent success has also been bolstered by its expansion into export markets, as noted by Sanjay Lodha: "We’re pleased to state that we have started receiving export orders, and this aligns with our growth strategy to enter overseas markets." With this new direction, Netweb Technologies is set to attract more share market investment as it continues to expand its global footprint.
For android only