From a fundamental perspective, multiple factors are fueling the smallcap stock’s rally, led by India’s structural shift in digital infrastructure. Rising internet traffic, rapid artificial intelligence (AI) adoption, and policy support for data localisation are expected to accelerate capacity expansion, creating a multi-year growth opportunity for players like Netweb.
Ventura Securities estimates India’s compute infrastructure market to grow rapidly by FY28, with AI infrastructure alone reaching about Rs 8,700 crore at a 29.5% CAGR, private cloud and hyperconverged infrastructure (HCI) hitting Rs 14,100 crore at a 28.5% CAGR, and high-performance computing (HPC) rising 8.2% to Rs 2,430 crore.
For Netweb, Ventura expects revenue to grow at a 36.7% CAGR to Rs 2,938 crore by FY28, supported by strong demand for AI systems, enterprise workstations, and cloud-related services. AI systems and enterprise workstations are projected to log a 50.9% CAGR to Rs 588 crore, while networking switches and high-performance storage could rise over 60% and 14%, respectively.
Other growth triggers include the launch of a new SMT facility in May 2024 and the development of AI GPU systems with Nvidia, Skylus.ai, and ‘Make in India’ servers. Adding to the optimism are recent order wins, including a Rs 450 crore deal on September 21 to deploy AI infrastructure using its Tyrone GPU-accelerated systems, to be executed by FY25-26. Earlier this month, the company secured a Rs 1,734 crore contract to supply Nvidia-powered servers under the IndiaAI Mission.
At around 10:10 am, shares of the company were trading at Rs 4,162, up 2.5% from the last close on the NSE.(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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