Netweb's revenue surged, but faster cost growth cut Q4 margin
Standalone revenue grew 86.59% year on year, while operating margin remained 7.21 percentage points below the IT peer median.
Filed 16 May 2026, 10:38 IST · after market close · Netweb Technologies India Ltd (NETWEB)
Key takeaways
- Standalone Q4FY26 revenue rose 86.59% year on year, but expenses grew faster at 90.80%, cutting operating margin by 1.93 percentage points.
- Net profit increased 64.20% year on year despite interest costs rising 584.87%, with other income contributing 10.79% of profit before tax.
- The stock fell 3.37% after the result, a smaller move than its 5.00% median absolute reaction across the last eight results.
Price around the results
Revenue growth stayed high, but margin lagged the IT sector
Netweb reported standalone Q4FY26 revenue growth of 86.59% year on year, while operating profit rose 61.57%. Expenses grew faster than revenue at 90.80%, narrowing operating margin by 1.93 percentage points to 12.48%. That was 7.21 percentage points below the 19.69% median among 19 Information Technology peers that had reported, placing Netweb second from the bottom.
Sequential margin improved as costs fell faster than revenue
Revenue declined 3.88% sequentially, but expenses fell 4.22%, allowing operating margin to recover 0.31 percentage points. Margin had risen to 14.97% in Q2FY26 before falling to 12.17% in Q3FY26, so the Q4 recovery was modest and did not restore the earlier level. Interest costs still rose 182.01% sequentially, limiting the benefit of the operating improvement.
Higher interest and other income shaped profit quality
Profit before tax rose 63.77% year on year and net profit rose 64.20%, while the tax rate was almost unchanged, down 0.19 percentage points. Interest increased 584.87% year on year, and other income accounted for 10.79% of profit before tax. The profit increase therefore came alongside a much higher interest burden and a material contribution from non-operating income.
Management disclosed a large pipeline
Management reported a pipeline of Rs 44,315 million as of March 31, 2026. The company also reported an L1 pipeline of Rs 3,278 million. These are management disclosures about the business pipeline, not reported revenue for the quarter.
The market reaction was within the stock's usual range
The stock fell 3.37% on the reaction day, with volume at 1.69 times the reference level. Across eight recent results, the stock rose after six and fell after two, while the median absolute move was 5.00%, making this decline smaller than its typical result-day move. It was up 5.67% after five sessions, down 5.45% after 15 sessions and up 20.16% after 30 sessions.
Q4FY26 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹774 cr | ₹805 cr | -3.88% | +86.59% |
| Other income | ₹10 cr | ₹7 cr | +54.30% | +309.20% |
| Expenses | ₹677 cr | ₹707 cr | -4.22% | +90.80% |
| Operating profit | ₹97 cr | ₹98 cr | -1.40% | +61.57% |
| Operating margin (%) | 12.48% | 12.17% | — | — |
| Interest | ₹8 cr | ₹3 cr | +182.01% | +584.87% |
| Depreciation | ₹4 cr | ₹4 cr | +5.80% | +20.44% |
| Profit before tax | ₹95 cr | ₹98 cr | -3.31% | +63.77% |
| Tax | ₹24 cr | ₹25 cr | -2.10% | +62.51% |
| Net profit | ₹71 cr | ₹73 cr | -3.71% | +64.20% |
| EPS (₹) | ₹12.43 | ₹12.94 | -3.94% | +64.20% |
Operating margin of 12.48% compares with a Information Technology sector median of 19.69% across 19 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -3.37% | -3.88% |
| Next session | +2.79% | — |
| 5 sessions | +5.67% | +6.43% |
| 15 sessions | -5.45% | — |
| 30 sessions | +20.16% | — |
Volume on the results session was 1.69× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- The company reports a pipeline of ₹44,315 million as of March 31, 2026.
- The company reports an L1 pipeline of ₹3,278 million as of March 31, 2026.
What to watch
- Whether operating margin holds above 12.48% after the 0.31-percentage-point sequential recovery.
- Whether interest costs moderate from the 182.01% sequential increase.
- Whether the reported Rs 44,315 million pipeline and Rs 3,278 million L1 pipeline translate into reported revenue.