Netweb Technologies Q2 FY27 Results Analysis: Revenue Surges 336%, EBITDA Margin Beats Guide

Netweb Technologies India Ltd's Q2 FY27 numbers came in strong, with revenue of Rs. 1,323.28 Cr (+335.68% YoY) and PAT growth of +334.75% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Revenue grew 335.68% YoY to Rs.1,323.28 Cr with Op EBITDA margin of 14.91% exceeding management's 13-14% guidance band for a second straight quarter, while PAT margin of 10.33% landed within the 10-10.5% guide. The offset is cash quality: H1 operating cash flow was negative Rs.639.15 Cr on a Rs.1,125.85 Cr inventory build, and finance costs more than doubled QoQ despite the Rs.1,200 Cr QIP. Growth is being pre-funded by equity, with H2 watch on whether gross-margin compression deepens as pricier memory stock flows through the execution cycle.

Key Investment Insights

Key Positives

• Revenue grew 335.68% YoY to Rs.1,323.28 Cr, the largest quarter on record and second consecutive quarter of step-change
• Op EBITDA grew 333.97% YoY to Rs.197.30 Cr with margin of 14.91%, above management's 13-14% guidance band for a second straight quarter
• PAT grew 334.75% YoY to Rs.136.66 Cr; EPS rose to Rs.23.54 from Rs.5.55
• H1 FY27 revenue of Rs.2,142.97 Cr equals 98.14% of FY26 full-year revenue of Rs.2,183.56 Cr
• Employee and other expenses fell to 2.47% and 2.67% of revenue, offsetting 740 bps YoY gross-margin compression
• Net worth rose 190.91% to Rs.2,104.14 Cr via the Rs.1,200 Cr QIP; net cash of Rs.803.13 Cr vs net debt of Rs.199.90 Cr at Jun-26
• Receivables grew slower than revenue (53.3 days); interest cover at 8.29×

Risk Factors

• Gross margin compressed 111 bps QoQ and 740 bps YoY to 20.05%
• H1 operating cash flow was negative Rs.639.15 Cr (CFO/PAT −2.88×) with free cash flow of −Rs.646.53 Cr
• Inventory rose Rs.1,125.85 Cr in H1 to Rs.1,930.69 Cr (111.4 days on H1 run-rate)
• Finance costs more than doubled QoQ to Rs.23.80 Cr (+106.53%); borrowings rose to Rs.321.31 Cr despite the Rs.1,200 Cr QIP
• Management's claim that working-capital needs are transitory was contradicted this quarter per the source analysis