Netweb Technol. (NETWEB)
Fast GrowerFairStock Score: 49/100 — MIXED
Score breakdown: P/E: 0/3 · ROCE: 2/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹5,007.2 |
| Market Cap | ₹28,511.34 Cr |
| P/E Ratio | 108.69 |
| ROCE | 32.45% |
| ROE | 33.53% |
| Dividend Yield | 0.06% |
| Profit Growth | 178.4% |
| Debt/Equity | 0.39 |
| Sales Growth | 172.1% |
| Free Cash Flow | ₹98.38 Cr |
| Promoter Holding | 71% |
| 52-Week Range | ₹2,822.3 — ₹5,810 |
| Sector | IT - Services |
| Book Value | ₹127.36 |
Strengths
- ROE of 33.53% and ROCE of 32.45% show excellent capital efficiency
- Negligible leverage with debt/equity of 0.01 and Altman Z-score of 18.31
- Strong growth momentum: sales up 82.40% and profit up 76.42%
- Promoter holding of 71% aligns interests with minority shareholders
- Positive free cash flow of ₹98 crore and Piotroski F-score of 7/9
Concerns
- Extreme valuation: P/E of 123.64, P/B of 41.85, and EV/EBITDA of 18.50
- Price far above Graham Number of ₹456.03 and DCF value of ₹924.95, implying negative margin of safety of -746.74%
- PEG ratio of 4.22 suggests growth is already more than fully priced
- Dividend yield of just 0.06% provides no income cushion for shareholders
AI Analysis
Let me begin with the business. Netweb displays many qualities I admire: return on equity of 33.53% and return on capital employed of 32.45%, with debt-to-equity of just 0.01. That is a highly profitable enterprise that does not depend on borrowed money. Promoter holding of 71% aligns owners and management. The Piotroski F-score of 7/9 and Altman Z-score of 18.31 indicate a financially sound operation. Sales grew 82.40% and profit grew 76.42%, and the latest quarter shows sales of ₹805 crore and net profit of ₹73 crore, so this is clearly a fast grower with momentum. Free cash flow of ₹98 crore is positive, though modest beside the ₹21,987 crore market capitalisation. But here my enthusiasm stops. At ₹3,897.80, the stock trades at 123.64 times earnings and 41.85 times book value. Even extraordinary growth cannot justify such a price unless it continues flawlessly for many years. My conservative Graham number is ₹456.03, and a discounted cash flow view gives ₹924.95; both imply the market is paying far more than a value investor should. The margin of safety is deeply negative at -746.74%. The dividend yield of 0.06% means shareholders receive almost no cash while waiting. With a PEG ratio of 4.22, the growth is more than fully priced. I would rather miss this wonderful company than overpay and hope for perfection.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer