Netweb Tech shares: After a 57% fall, this multibagger stock gained 24% in 2 days; here's why

Shares of Netweb Technologies India extended its gains for another session as the defence-allied counter hit upper circuit for second straight session on Thursday after the company announced the launch of a new product named 'Skylus(dot)ai' on Tuesday, February 18.

Shares of Netweb Technologies India surged 10 per cent, hitting the upper circuit limit, to Rs 1,622 on Thursday before settling at Rs 1,610 apiece, commanding a total market capitalization of close to Rs 9,150 crore. The stock had settled at Rs 1,474.55 on Wednesday, rising 10 per cent for the day.

However, the Multibagger counter had crashed about 57 per cent from its 52-week high at Rs 3,060 in December 2024 to Rs 1,304.25 on Tuesday, before rebounding about 24 per cent in the two days. Listed in July 2023, shares of Netweb Technologies had surged over 500 per cent to scale its all time highs. The stock is still 225 per cent above its IPO price of Rs 500.

Skylus is an appliance for optimized GPU resource management across multi-vendor environments, which enables flexible resource allocation, maximizing GPU utilization for AI workloads. The platform integrates with Tyrone HyperScale NAS ParallelStor, ensuring high throughput and low latency for large-scale AI applications, said the company in its release.

"Skylus includes Kubyts, a workbench offering pre-tested, pre-built ready-to-deploy container images, simplifying application deployment. It supports industries such as pharmaceuticals, finance, education, automotive design, or any organization looking to leverage the power of AI. It also facilitates Research as a Service (ReaaS) and Innovation as a Service (IaaS), enabling seamless
AI adoption across industries and use cases," the filing added.

Netweb Technologies posted a 16.56 per cent YoY growth in profit to Rs 30.32 crore in the third quarter ended December 31, 2024, driven by demand for artificial intelligence-related projects. The domestic IT server maker's revenue from operations rose 32 per cent YoY to Rs 334 crore during the reported quarter. Its order book stood at Rs 360 crore as of December 2024.

Netweb reported a healthy beat on sales with miss on operating margins in 3QFY25 but it has expansion plans for exports, said Equirus Securities. "We believe that Netweb’s sales growth in the medium to long term is likely to remain robust given a healthy pipeline/order book," it said.

"We believe that the order pipeline/book is likely to remain robust ahead as well considering its unique tie up with NVIDIA and increasing AI adoption, " it said. "Its consistent high growth, return ratios and recent stock price correction we upgrade Netweb to 'Long' with March 2026 target price of Rs 2,655," Equirus said.

We recently hosted the management of Netweb Technologies to understand the global developments in AI and its impact on the outlay for computation infra. GoI remains steadfast at developing a sovereign computation infra with 18,000 GPUs under the India AI mission which will drive demand, said IIFL Securities.

"Management highlighted that while DeepSeek's low-cost LLM development demonstrates the potential for efficient models with reduced computational capex, this is expected to encourage more private players to enter the market driving demand for its AI&EW offerings. We keep EPS estimates unchanged, maintain an 'add' rating with a target price of Rs 2,130," IIFL added.