Netweb Technologies shares sink 7.5% post strong Q4 earnings; here's why 

Shares of Netweb Technologies slipped nearly 8% on Monday amid a rally in broader market after the IT-enabled services major reported its Q4 earnings. Revenue zoomed 86% in Q4 to Rs 770 crore against Rs 414 crore a year ago. 

EBITDA rose 64% to Rs 96.5 crore in Q4 against Rs 59 crore a year ago. 

Analysts said high valuations and margin compression in Q4 led to a correction in the IT stock. 

EBITDA margins were under pressure as they fell 177 basis points on a year-over-year basis. 

On the other hand, EBITDA growth came at 63.60% on a year on year basis signalling robust business expansion.

Meanwhile, net profit rose 65.70% to Rs 70.6 crore in Q4 against Rs 42.6 crore in the year ago period. 

The IT stock slipped 7.5% to Rs 3760 in the current session against the previous close of Rs 4065.45 on BSE. Market cap of the IT firm slipped to Rs 21,690 crore. 

A total of 1.86 lakh shares of the firm changed hands amounting to a turnover of Rs 71.88 crore. 

The company's AI segment has emerged as a key growth driver, with its contribution to overall revenue rising sharply to 43% from 15% previously, according to management commentary. The company has seen robust demand in the AI segment and expects this momentum to sustain going forward.

Netweb Technologies India is in the business of "Computer Server", which includes transforming storage and computing with innovative Servers, Workstations, Storage, Cloud, HPC, AI and Big Data solutions.