Netweb Technologies shares fell by 5.2% on October 26, 2026, even after the company reported strong growth in its Q2 earnings. Investors reacted to concerns about shrinking profit margins and rising raw material costs, which overshadowed the healthy increase in revenue and net profit during the quarter.
- Netweb shares initially rose 4.5% but later dropped to ₹4,106.10.
- Q2 net profit surged 60% quarter-on-quarter to ₹137 crore.
- Revenue increased 335% year-on-year to ₹1,323 crore.
- Profit margins contracted slightly due to rising raw material costs.
- EBITDA margins showed only flat growth despite higher profits.
Why Did Netweb Technologies Shares Drop Despite Earnings Growth?
Although Netweb Technologies reported strong revenue and profit growth for the July to September quarter of FY27, the company’s shares declined because investors focused on the pressure on profit margins. The cost of raw materials increased sharply, rising 124% sequentially to ₹1,668.04 crore. This increase in input costs limited the expansion of profit margins despite higher earnings.
How Did Netweb Technologies Perform Financially in Q2 FY27?
Netweb Technologies showed impressive financial results in Q2 FY27. The company’s net profit jumped 60% quarter-on-quarter to ₹137 crore, and it soared 334% compared to the same quarter last year. Revenue from core operations rose 335% year-on-year to ₹1,323 crore and increased 61% sequentially from the previous quarter.
However, the net profit margin contracted slightly by 9 basis points year-on-year and 8 basis points sequentially, settling at 10.3%. EBITDA margins grew marginally by 17 basis points to 14.90%, showing flat growth despite the increase in operating profit to ₹197 crore.
What Are the Market Reactions and Stock Performance Trends?
Netweb Technologies shares initially surged 4.5% to ₹4,534.80 after the earnings announcement but later fell to an intraday low of ₹4,106.10. Trading volumes were high, with over 3 million shares traded across NSE and BSE by midday.
Over the last three years, Netweb shares have delivered more than 455% returns to investors. The stock gained nearly 12% in the past year and 35% year-to-date in 2026. However, in the short term, the stock lost 8.4% in the past month and declined 11.4% over the last five trading sessions.
What Is the Company’s Outlook According to Management?
Sanjay Lodha, Chairman and Managing Director of Netweb Technologies, highlighted the company’s strong business pipeline valued at ₹1,11,518 million. He expressed confidence in future growth opportunities driven by rising demand for high-performance computing and AI infrastructure.
The management emphasized strong execution and operational discipline as key factors supporting growth momentum despite rising raw material costs.
What Are the Key Takeaways?
- Netweb Technologies reported strong revenue and profit growth in Q2 FY27.
- Profit margins contracted slightly due to increased raw material costs.
- Shares initially rose but fell 5.2% as investors booked profits.
- The company’s stock has shown strong long-term returns despite recent short-term declines.
- Management remains optimistic about growth driven by AI and high-performance computing demand.
