NetWeb Technologies Q2 FY27

Netweb Technologies just posted the best quarter in its history. Yet the stock fell around 8% the week before. Here’s what’s actually going on:
Q2 FY27 in numbers:
🔹 Revenue: ₹1,323 Cr (vs. ₹304 Cr a year ago)
🔹 Profit: ₹137 Cr (vs. ₹31 Cr a year ago)
🔹 H1 profit of ₹222 Cr has already beaten all of FY26 (₹206 Cr) in just six months

Where the money came from:
🔹 AI Systems: ₹773 Cr (58% of revenue)
🔹 HPC / Supercomputing: ₹248 Cr
🔹 Private Cloud: ₹245 Cr
Two years ago, AI was around 15% of this business. Today it takes up most of the business.

So why was there a sharp fall?
1. The drop happened BEFORE the results. The board met on a Saturday. The market hasn’t reacted to these numbers yet.
2. Sensex fell around 3.75% that week. High-valuation small caps get hit hardest.
3. Valuation is at 105x trailing P/E, a lot of good news was already priced in. (Include Q2 profits, and it’s closer to 70–75x. Still rich, but a very different story.)
4. The company raised ₹1,200 Cr at ₹4,790/share. The stock now trades around 9% below that.
5. Pre-results nerves after a big run-up.

What I’m watching next:
🔹 Order book is ₹2,629 Cr + ₹653 Cr in L1 bids. Solid visibility, but it grew only modestly from ₹2,507 Cr last quarter.
🔹 The top 5 clients make up 76.5% of H1 revenue.
🔹 Margins are around 10% of PAT, as much of the revenue is pass-through GPU hardware.

Stock prices react to expectations, not just results. Record numbers and a falling price can both be true at once.
Netweb is fast becoming a proxy for India’s AI infrastructure build-out. Monday will tell us how the market reads it.
(Not investment advice)