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Crisil Ratings upgrades ratings of Netweb Technologies to 'A/A1' with 'stable' outlook

23-Jun-25 11:30 Hrs IST

Crisil Ratings stated that the rating upgrade reflects sustained improvement in the business risk profile of the company, driven by healthy scalability and range bound operating profitability.

Regular addition of new customers and diversification in product and service offerings such as graphics processing unit (GPU)-based artificial intelligence (AI) infrastructure have led to nearly 70% compound annual growth rate (CAGR) in revenue over the four fiscals through 2025; revenue is achieved at Rs 1,149 crore during fiscal 2025.

Furthermore, a healthy order book of Rs 325 crore along with L-1 orders of Rs 362 crore, as of March 2025, provide revenue visibility over the medium term.

While operating profitability has moderated over the past couple of years, from 15.8% in fiscal 2023 to 14.2% in fiscal 2025, it is partly offset by revenue growth witnessed during these fiscals through 2025 which is likely to sustain above Rs 1300-1400 crores in medium term.

Going forward, NTIL's ability to maintain its operating profitability, amidst sustained business growth, will remain a key monitorable.

The ratings upgrade also factors in the company's strong financial risk profile and liquidity amidst low dependence on external debt. Though operations continue to remain working capital intensive, the dependence on external debt has remained negligible.

Absence of term debt repayments, cushion in bank lines and access to unencumbered cash and cash equivalent further aid liquidity.

The ratings continue to reflect the established market presence supported by the extensive experience of the management team in the high-performance computing (HPC), storage and cloud business segments, and its strong financial risk profile.

These strengths are partially offset by working capital-intensive operations and exposure to intense competition.

Netweb Technologies India (NTIL) provides a range of computer server solutions such as HPC, storage, deep learning, big data analytics, cloud and virtualisation. NTIL was involved in the implementation of Kabru supercomputer (India's second fastest computer) and PARAM YUVA II (fastest supercomputer) and is participating in the National Supercomputing Mission of the government of India.

The scrip shed 0.35% to currently trade at Rs 1759.35 on the BSE.