Geojit IPO report on Netweb Technologies India
Netweb Technologies India Ltd. (NTIL) is a Delhi-based company that specializes in High-end Computing Solutions (HCS). They serve various sectors, including IT, IT-enabled services, entertainment, media, BFSI, national data centers, and government entities. The company operates a manufacturing facility in Faridabad, Haryana, and has 16 offices across India. NTIL’s 3 supercomputers have been listed among the world's top 500 supercomputers 11 times. The Indian IT Industry market worth USD 22,500cr in FY23 and is forecasted to reach USD 37,271cr by FY29, with a CAGR of 8.8% over the period (FY23-29). NTIL has both design and manufacturing capabilities in house and has undertaken the installation of over 300 supercomputing systems and over 4,000 accelerator/ GPU based AI systems and enterprise workstations as of May 2023. Netweb is one of the few OEMs that has qualified for the production linked incentives scheme for IT hardware and networking products manufacturing in India. Intel, AMD, Samsung India, and Nvidia are some of the technology partners Netweb collaborates with to design and innovate product offerings. The company has raised Rs.51cr from pre-IPO placement at an issue price of Rs 500 per share from marquee institutional investors, including LG Family Trust, and Anupama Kishore Patil, among others. Netweb is expanding its geographical footprint, targeting the European, Middle Eastern, and African (EMEA) markets. In FY23, NTIL’s revenue rose by 80% YoY to Rs 445cr, compared to Rs 247cr in the previous year. PAT doubled from Rs 22.5cr to Rs 47cr during the same period. NTIL’s profitability has improved significantly, with EBITDA margins expanding to 15.7% in FY23 from 10.1% in FY21. Similarly, PAT margins improved to 10.5% in FY23 compared to 5.8% in FY21.
Valuation and Outlook
At the upper price band of ₹500, NTIL is available at a P/E of 59.7x (FY23), which appears reasonably priced compared to peers. With effective management, consistent growth, an expanding product portfolio, geographic footprints and Digital India initiative by the Government, NTIL is well-positioned to capitalize on the Indian IT industry's growth. Therefore, we assign a "Subscribe" rating for the issue on a short to medium-term basis.
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