NETWEB TECHNOLOGIES INDIA LIMITED
Embedded Files
Stock Research and Analysis Report (information valid up-to December 17 2024)
ABOUT US
Netweb Technologies India Limited is an Indian-origin Original Equipment Manufacturer (OEM) in the high-end computing solutions (HCS) market.
Netweb sells its product offerings under its flagship brand "Tyrone."
It has various product offerings including:
Private Cloud and Hyperconverged Infrastructure (HCI) which contributed to 36.5% of its revenue in FY24.
High performance computing (HPC) systems which contributed to 36.2% of its revenue in FY24.
High performance storage solutions which contributed to 4.7% of its revenue in FY 24.
AI Systems and enterprise workstations which contributed to 11% of its revenue in FY 24.
Data center servers which contributed to 4.7% of its revenue in FY 24.
High-end computing solutions (HCS) focused softwares and services which contributed to 2.4% of its revenue in FY 24.
Networking switches and 5G solutions which contributed to 0.5% of its revenue in FY 24.
Other products including sale of spare parts contributed to 4% of its revenue in FY 24.
Netweb current has 18 offices in India and 2 manufacturing facilities in Faridabad while a third manufacturing facility is currently being installed in Faridabad itself. Netweb also has R&D facilities in Faridabad, Gurgaon and Hyderebad. Netweb's presence spans across 26 states and 1 union territory in India while it has also recently started exporting its products to the Middle East and European markets. However, exports contributed to just 0.07% of Netweb's turnover in FY2024.
Netweb Technologies India Limited caters to a diverse range of clients across various sectors, both in the public and private sectors. It's products cater to various sectors such as Higher education and Research, Government and Defence, IT and ITES, and other sectors such as BFSI and data centres.
Netweb's key clients across various sectors include:
Higher education and research - Various IITs (Indian Institute of Technology), Hemvati Nandan Bahuguna Garhwal University, Centre for Computational Biology and Bioinformatics, Central University of Himachal Pradesh (CUHP University), Institute of Nano Science and Technology (INST), Dr. Shyam Prasad Mukherjee International Institute of Information Technology, Naya Raipur (IIIT Naya Raipur), Jawaharlal Nehru University (JNU).
Government and defence - ISRO, Ministry of Electronics and Information Technology, NMDC Data Center private limited.
IT and ITES - Infosys, TCS, Zoho
BFSI - Graviton Research Capital LLP, A.P.T. Portfolio Private Limited
Data Centres - Yotta Data Services Private Limited
As of Q2 FY25, Netweb's revenue came from a mix of government and private clients while government clients made up 40% of their revenue.
As of FY 24, Netweb had a strong order book of Rs 411 crores which represents a healthy backlog of orders which will help provide future revenue growth.
EXPANSION
Capex plans
Netweb's primary capex focus is on setting up a new manufacturing facility for server motherboards and printed circuit board.
They aim to reduce reliance on third-party manufacturers and enhance their production capabilities.
The company has already acquired the land for this facility and plans to invest almost ₹33 crores in this project, utilising proceeds from their IPO.
As of FY 24, they had utilised ₹7.5 crores, with the remaining funds allocated for completion in the coming years.
IPO
Netweb raised approximately ₹206 crores from their IPO in July 2023.
The IPO consisted of a fresh issue of 4,121,000 equity shares at a price of ₹500 per share.
₹33 crores were allocated for capital expenditure, primarily for setting up a new SMT (surface mount technology) production line at their upcoming manufacturing facility in Faridabad, Haryana. As of March 31, 2024, ₹7.5 crores had been utilised for this purpose.
₹128 crores was earmarked for long-term working capital requirements. As of FY 2024, ₹53 crores had been utilised towards this objective.
₹22.5 crores were allocated for repaying or prepaying a portion of their outstanding borrowings. This was fully utilised by March 31 2024.
The remaining amount was allocated for general corporate purposes which was fully utilised by March 31 2024.
SECTOR ANALYSIS
Source: IBEF
A significant portion of Netweb's product portfolio is utilized by data center clients. The company offers data center servers, private cloud solutions, and hyperconverged infrastructure (HCI) products, which have extensive applications in the data center industry. According to the Indian Brand Equity Foundation (IBEF), the increasing need for data localization in India, coupled with government initiatives to boost data storage infrastructure, is driving growth in the sector. India's total data center capacity is projected to expand from 1.01 GW in FY23 to 3.29 GW in FY28, reflecting a robust CAGR of 26.64% during this period. This substantial growth is expected to drive higher demand for Netweb's product offerings, positioning the company to benefit significantly from the rapid expansion of the data center sector in India.
Source: National Informatics Center
The management has highlighted its efforts to expand its presence in the BFSI sector by leveraging its private cloud and HCI product offerings. Netweb's revenue share from these offerings increased from 33.1% in FY23 to 36.5% in FY24. This growth is expected to continue, driven by the intrinsic expansion of the BFSI sector in India. The volume of digital transactions has risen from 2,070.84 crore in 2017–2018 to 12,008.75 crore in 2022–2023, reflecting an impressive CAGR of 42%. This upward trend is likely to persist, fueled by the growing adoption of digital transactions and mobile wallets. Additionally, the Reserve Bank of India (RBI) has emphasized the need for data storage localization, further increasing the demand for private cloud solutions and benefiting companies like Netweb.
Source: Frost and Sullivan Analysis
The Indian high-performance computing (HPC) market is projected to grow from USD 589 million in FY2024 to USD 918.6 million by FY2029, reflecting a CAGR of 9.3% over the forecast period (FY2024–2029). This growth is primarily driven by the "National Supercomputing Mission (NSM)," launched in 2015 with a budget of ₹4,500 crore, aiming to establish a network of over 70 HPC facilities to enhance research and development capabilities. As of mid-2020, only 16.67% of the budget had been utilized, with the remainder allocated for future implementation. In FY2024, approximately 36% of Netweb's revenue was derived from HPC solutions. Consequently, the growth of the Indian HPC market, coupled with government initiatives like the NSM, is expected to significantly boost Netweb's future revenue and business prospects.
Source: CRISIL Company Research
AI spending in India is projected to grow at a CAGR of 31.5%, increasing from USD 1.7 billion in 2023 to USD 5.1 billion by 2027. Investments in AI during 2024 and 2025 will focus on building infrastructure essential for creating high-value, transformative use cases over the long term. These investments are being driven by increased enterprise spending and government initiatives such as “Make AI Work for India.” This trend is expected to boost orders for companies like Netweb, whose product offerings include AI systems and enterprise workstations, which accounted for 11% of its revenue in FY24.
Government schemes:
Data Center Incentivisation Scheme: In 2022, the Telecom Regulatory Authority of India (TRAI) issued recommendations to strengthen the regulatory framework for promoting the data economy through the development of data centers. These recommendations included the introduction of a Data Center Incentivization Scheme aimed at encouraging the establishment of data centers and data center parks. The proposed scheme outlined both fiscal and non-fiscal incentives to be provided by the Central Government, along with guidelines encouraging states to offer additional fiscal incentives through their respective policies. The incentives under this scheme include provisions such as land allocation, capital subsidies, and interest subsidies for data center operators. Consequently, government initiatives to promote the establishment of data centers in India are expected to drive higher revenue for companies like Netweb, which supply key products used in data centers.
PLI Scheme 2.0 for IT Hardware: Netweb is eligible to apply for production-linked incentives under the Government of India’s Production-Linked Incentive (PLI) Scheme 2.0 for IT Hardware. The PLI Scheme 2.0 for IT Hardware has a total outlay of ₹17,000 crore over six years and aims to broaden and deepen the manufacturing ecosystem by promoting the localization of components and sub-assemblies. The scheme offers an average incentive of approximately 5% on net incremental sales (over the base year) of goods manufactured in India and included in the target segment, to eligible companies, for a period of six years.
FINANCIALS
(Figures in Rs. Crore)
SWOT ANALYSIS
SHAREHOLDING SUMMARY
Page updated
Google Sites
Report abuse