Revenue surged 172.13% YoY, but margin stayed below IT peers
Sequential margin recovered 2.22 percentage points as revenue grew faster than expenses, while interest costs rose 41.35%.
Filed 28 Jul 2026, 15:18 IST · Netweb Technologies India Ltd (NETWEB)
Key takeaways
- Standalone revenue grew 172.13% YoY, but operating margin slipped 0.17 percentage points as expenses rose 172.68%.
- Operating margin recovered 2.22 percentage points QoQ because revenue growth of 5.94% outpaced expense growth of 3.25%.
- At 14.70%, operating margin was 3.98 percentage points below the 18.68% median of 16 reported IT peers.
Price around the results
Scale lifted standalone profit in Q1FY27
Netweb's standalone net profit grew 179.92% YoY, ahead of the 169.02% rise in operating profit, as the business scaled sharply from last year's base. The tax rate fell 1.49 percentage points YoY, helping the increase in net profit exceed operating-profit growth. QoQ, net profit rose 20.87% even as other income fell 17.20%.
Sequential margin recovery came with higher financing cost
Revenue grew 5.94% QoQ while expenses increased 3.25%, widening operating margin by 2.22 percentage points. The improvement reverses the margin decline seen from 14.97% in Q2FY26 to 12.17% in Q3FY26, followed by 12.48% in Q4FY26. Interest expense nevertheless rose 41.35% QoQ and 1,075.51% YoY, while other income contributed 7.42% of profit before tax.
Margin remains the weak point against IT peers
Year-on-year operating margin narrowed 0.17 percentage points because expenses grew slightly faster than revenue. At 14.70%, it was 3.98 percentage points below the 18.68% median for 16 Information Technology peers that had reported the quarter, placing Netweb first from the bottom on this measure. The quarterly trend shows recovery from Q3FY26, but the margin is still below its 14.87% level in Q1FY26.
Management points to AI systems and order visibility
Management said AI Systems remained the key growth driver in Q1FY27. The company said its order book stood at Rs 25,069.35 million at June 30, 2026, with an L1 position of Rs 8,480.47 million, which it linked to revenue visibility over the coming quarters. Management also said its sales funnel and pipeline support medium- to long-term sustainable growth and described a multi-year demand pipeline for high-end computing systems made in India.
Q1FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹820 cr | ₹774 cr | +5.94% | +172.13% |
| Other income | ₹8 cr | ₹10 cr | -17.20% | +670.00% |
| Expenses | ₹699 cr | ₹677 cr | +3.25% | +172.68% |
| Operating profit | ₹121 cr | ₹97 cr | +24.80% | +169.02% |
| Operating margin (%) | 14.70% | 12.48% | — | — |
| Interest | ₹12 cr | ₹8 cr | +41.35% | +1075.51% |
| Depreciation | ₹3 cr | ₹4 cr | -13.05% | +0.30% |
| Profit before tax | ₹114 cr | ₹95 cr | +20.38% | +174.31% |
| Tax | ₹29 cr | ₹24 cr | +18.94% | +158.94% |
| Net profit | ₹85 cr | ₹71 cr | +20.87% | +179.92% |
| EPS (₹) | ₹14.98 | ₹12.43 | +20.51% | +178.44% |
Operating margin of 14.70% compares with a Information Technology sector median of 18.68% across 16 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- AI Systems continued as Netweb’s key growth driver in Q1 FY27.
Guidance & outlook
- The order book and L1 position provide strong revenue visibility for the coming quarters.
- Netweb says its sales funnel and pipeline position it to deliver medium- to long-term sustainable growth.
- The company identifies a deep, multi-year demand pipeline for high-end computing systems made in India.
Competition
- Netweb describes itself as one of India’s leading Indian-origin OEMs in high-end computing solutions.
- The company says it has an early-mover position in AI infrastructure.
What to watch
- Whether operating margin stays above 14.70% after the Q1 recovery.
- Whether expenses continue to grow slower than revenue, as they did QoQ at 3.25% versus 5.94%.
- How interest expense changes after rising 41.35% QoQ and 1,075.51% YoY.