Netweb Tech 2025: Accounting Shift Every Investor Should Know

Netweb Tech 2025 In its Q2 results disclosed recently, Netweb Technologies India Limited revealed a significant change in its accounting policy that the company has changed its inventory valuation method from First-In-First-Out (FIFO) to the Moving Weighted Average Cost method, effective from April 1, 2024. Netweb Tech 2025 Link to know more: https://g.page/r/CZQzRiCVMxYgEB

🧮 Why This Change Matters

Inventory valuation has a major impact on cost of goods sold (COGS), gross margin, and profitability metrics.

A change from FIFO to moving weighted average may help to level the cost fluctuations, which is the case for tech/hardware businesses, where the prices of raw materials and components change rapidly.

Netweb’s disclosure also states that the figures for the previous periods have been restated to present this policy change as per Ind AS 8.

📊 Impact on Financials

Although the company describes the change as “not material,” it has, however, adjusted the comparative figures for the previous periods.

For instance:

Q2 FY26 revenue rose ~21 % YoY to ₹3,037.2 Mn.

Profit after tax (PAT) stood at ₹314.3 Mn, a rise of ~20 % YoY.

These impressive figures are achieved in a year when Netweb is reaping benefits from record orders in high-end computing and AI infrastructure as well.

✅ What Investors Should Watch

Watch closely the disclosures coming up: if we see cost inflation again, the moving weighted average method might generate higher cost carry-forwards, thus affecting margins.

Watch margin stability: as the policy change makes cost swings less abrupt, margin fluctuations may be less pronounced — however, this could hide the existence of cost pressures.

Check order-book growth and turnover: the change does not affect the underlying business, thus strong fundamentals are still the main factor. (Netweb had two large strategic orders of ~₹21,840 Mn announced for FY27 execution.)

Netweb Technologies’ move to change the accounting is a sensible step to ensure that inventory valuation is consistent with a hardware-driven business operating in fast-moving markets. Although the quantitative effect might be minor today, the qualitative signal is quite significant: the company is adjusting its accounting framework in a timely manner to be in line with its growth in the AI/compute space.

Investors should primarily focus on the big story which is growing the order book and executing the AI infrastructure projects — the accounting change is just one of the details that facilitates the process, not the headline. https://sritechnology.in/blog/