Newgen Software Tech closes higher by 11% on impressive Q2 results; net profit up nearly 60%

Newgen Software Technologies, a small-cap IT stock, finished Tuesday’s session strongly with a gain of 11.37% at 1,041.40. The stock hit an all-time high of 1,060 during the trade. This impressive performance followed the company’s strong financial results for the quarter ending in September.

For Q2 FY24, the company reported a 59% surge in its consolidated net profit to 48 crore, up from 30 crore recorded in the corresponding quarter of the last fiscal. The consolidated revenue from operations reached 293 crore compared to 226 crore in Q2 FY23, up 30% YoY, driven by strong growth in banking and financial services across geographies.

Total annuity revenue streams (ATS/AMC, support, cloud/SaaS, and subscription license) come in at 179 crores, with strong growth in support revenues. Subscription revenues (ATS/AMC, cloud, and subscription license) stood at 90 crores. Revenue from implementation grew by 82% YoY to reach 62 crore, according to the company’s earnings report.

During the quarter, the company said, it achieved a significant order worth 68 crore from a leading public sector bank in India for the development and management of their complete digital business platform. This is the largest order in terms of value for Newgen so far.

The company expanded its operations with existing customers in the EMEA region, especially in Saudi Arabia. During Q1, Newgen added 14 new logos.

According to the company’s earnings report, the EMEA region contributed 34% of revenues in Q2 FY24, while India, USA, and APAC (EX-India) contributed 32%, 23%, and 11%, respectively. In terms of revenue split, banking contributed 74% in Q2 FY24.

Speaking about the results, Diwakar Nigam, Chairman and Managing Director of Newgen Software Technologies Ltd., said, “We continue to build upon the business momentum with four consecutive high growth quarters now. We witnessed a strong Q2 performance with 30% YoY revenue growth and margin expansion compared to the same quarter last year.”

“We have been making deeper penetration through our digital lending platform in the banking sector and have received high-value orders during the quarter as market activity picks up in this segment across different geographies. We are becoming a preferred and trusted platform in the banking ecosystem for accelerating their business. We are further working on expanding our market footprint through the opening of new offices,” he further added.

Newgen is a low-code application development platform company. It is an established player in the market of enterprise content management (ECM), business process management (BPM), and customer communications management (CCM).

The company’s shares this year have rewarded their shareholders handsomely by generating a stellar return of 190%, which is the best yearly performance since listing in CY18. Over the last five years, the shares have been appreciated from 231 to the current position of 1,041, which translates into a remarkable rally of 352%.

Disclaimer: We advise investors to check with certified experts before taking any investment decisions.

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Published: 17 Oct 2023, 04:21 PM IST

mikata