A novel approach to damage detection in composite structures using hyperspectral image index analysis algorithm with neural network modeling employing Weight Elimination Algorithm (WEA) is presented and discussed. The matrix band based technique allows the monitoring and analysis of a component’s structure based on correlation between sequentially pulsed thermal images. The technique produces several matrices resulting from frame deviation and pixel redistribution calculations with ability for prediction. The obtained results proved the technique to be capable of identifying damaged components with ability to model various types of damage under different conditions.