Netweb Technologies India Ltd Forensic Report - SOIC x StockScans Report

as of Aug 2026

Netweb's record carries a clean audit history and a simple corporate structure, but the FY2026 numbers show a sharp turn: secured borrowings surged 213x in one year, cash conversion from reported profit has been weak for eight years, and revenue recognition remains an auditor-flagged area while receivables rose 85.3%.

Key findings

  1. "Zero net-debt" claim masks a 213x surge in secured borrowings Major - Total borrowings rose from ₹12.72 crore at March 31, 2025 to ₹2,716.71 crore at March 31, 2026, lifting the debt-equity ratio from 0.02 to 0.39. The ₹149 crore Axis Bank facility is a Working Capital Demand Loan secured against GPU-project current assets and personal guarantees of Sanjay and Navin Lodha; other facilities carry FDR pledges and guarantees of all four directors. Management stated net debt stood at ₹199.9 crore as of June 30, 2026, with an IR advisor noting "for the first time in a very long -- in many quarters, we've had a positive debt closing figure".
  2. Reported profit has not translated into operating cash over eight years Major - Cumulative CFO of ₹207 crore equals only 0.45x of cumulative PAT less other income of ₹454 crore over the eight years through FY2026. CFO/PAT was -0.12x in FY2025 and 0.24x in FY2024, with FCF negative in both years. Despite this, the final dividend for FY2025-26 was raised to ₹3.00 per share, a cash outflow of approximately ₹17.08 crore.
  3. Revenue recognition is auditor-flagged in both FY2024-25 and FY2023-24 while receivables rose 85.3% Major - The independent auditor identified revenue recognition on multi-product contracts as a Key Audit Matter in both FY2024-25 and FY2023-24. Trade receivables rose 85.3% to 669.96 crore in FY2026 against revenue growth of 90.1%. Customer concentration increased to three customers at 10%+ of revenue, and dealer sales swung from 4.91% of total sales in FY2025 to 28.80% in FY2026.
  4. Promoter family holds all four executive seats; public institutions dissent on approvals Major - All four Lodha directors were re-appointed for five years from August 14, 2026 via a postal ballot dated March 20, 2026. Public institutions voted 51.32% against Mr. Vivek Lodha's re-appointment and 61.88% against Mr. Niraj Lodha's, while the promoter group voted 100% in favour. In the October 17, 2024 postal ballot, public institutions voted 65.94% against ESOP ratification. Commission caps for FY2025-26 require special resolutions as aggregate director remuneration may exceed 5% of net profit.
  5. Customs duty dispute confirmed with penalty; bank guarantees rose 67% Minor - The Commissioner of Customs confirmed differential duty of ₹1,05,94,991 with an equal penalty and a redemption fine of ₹81,55,551 on May 8, 2025. Netweb appealed to CESTAT on August 14, 2025, and the appeal remained pending as of the FY2025-26 reporting period. Bank guarantees in the normal course of business rose from ₹81.7 crore to ₹136.31 crore at March 31, 2026.
  6. Accounting-policy changes are small and disclosed, but estimate changes lifted profit Minor - Netweb changed inventory valuation from FIFO to moving weighted-average cost effective April 01, 2025, restating prior-period figures with a cumulative retained-earnings impact of ₹0.43 crore at April 01, 2024, stated as "not material". In FY2023-24, a change in amortisation method from written-down value to straight-line decreased amortisation by ₹0.41 crore and increased PBT from ₹101.54 crore to ₹101.96 crore. Estimated useful lives for plant and machinery are 5-15 years versus Schedule II's prescribed 15 years.
  7. One customs penalty under appeal and one minor SEBI code violation, no other actions Minor - The customs order of May 8, 2025 confirmed duty of ₹1,05,94,991 with penalty, and the CESTAT appeal remained pending as of the FY2025-26 reporting period. In FY2024-25, one Designated Person traded without pre-clearance and executed a contra trade for 8,660 shares; a warning letter was issued and profit of ₹58,700 was deposited to IEPF. No regulator notices affecting working, performance, or going concern were received in FY2023-24 through FY2025-26.
  8. Only subsidiary is a Section 8 foundation, not consolidated, no off-balance-sheet vehicles Minor - Netweb Foundation, held at 99%, is not consolidated because it is prohibited from distributing dividends or economic benefits, failing the Ind AS 110 control definition. The ₹0.01 crore investment was charged to profit and loss in FY2022-23 rather than carried as an investment. The same single-subsidiary structure was reported in FY2023-24 and FY2024-25.
  9. Related-party dealings limited to pay, dividends, and small CSR transfers Clean - No material related-party transactions under Section 188 were reported, and Form AOC-2 disclosure was not applicable for FY2025-26. No loans were given to directors or their entities during FY2025-26. Dividends paid to Sanjay Lodha were 4.01 crore and 2 crore each to Navin, Niraj, and Vivek Lodha for FY2025-26. CSR contribution to Netweb Foundation was ₹0.02 crore in FY2025-26.
  10. Three consecutive clean audit opinions with Key Audit Matters reported Clean - S S Kothari Mehta & Co. LLP issued unqualified opinions for FY2023-24, FY2024-25, and FY2025-26, with Revenue from Operations reported as a Key Audit Matter in each year. No fraud was reported under Section 143(12) in FY2025-26. CARO responses confirm no benami proceedings, no wilful-default declaration, no repayment defaults, and an audit trail that operated throughout the year with no tampering.

What to watch

Bottom line: This is an audited record with three clean opinions, no fraud reports, and a simple related-party profile. The risk character is growth-funded-by-debt: a 213x jump in secured borrowings with promoter guarantees, weak cash conversion from reported profit, and an auditor-flagged revenue line with receivables growing nearly in lockstep with sales. Watch the debt trajectory, the CESTAT outcome, and whether cash generation ever catches up with reported earnings.