Newgen hits new high on strong Q1 results; zooms 126% so far in 2023

Shares of Newgen Software Technologies hit a new high of Rs 813.90, as they rallied 13 per cent on the BSE in Thursday’s intra-day trade in an otherwise subdued market after the company reported a strong 33.9 per cent year-on-year (YoY) revenue growth in June quarter (Q1FY24) at Rs 251.7 crore.

The company said it witnessed the highest quarterly YoY revenue growth rate over last 5 year. The annuity-based revenue (SaaS, ATS/AMC & Support) forming 66 per cent of revenue mix grew by 26.3 per cent YoY.

At 11:31 AM; the stock quoted 11 per cent higher at Rs 799, as compared to 0.05 per cent decline in the S&P BSE Sensex. The average trading volumes at the counter jumped over seven-fold today. A combined 4.3 million shares changed hands on the NSE and BSE. Thus far in the calendar year 2023, the stock has zoomed 126 per cent, as against 9.7 per cent rise in the S&P BSE Sensex.

The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) margin increased by 250 bps YoY to 12.8 per cent due to strong revenue growth posted by the company. Profit after tax jumped 57 per cent YoY at Rs 30.2 crore, against Rs 19.2 crore in Q1FY23.

Newgen is the leading provider of a unified digital transformation platform with native process automation, content services, communication management, and AI/ML capabilities.

The management said the continuing the strong momentum, Q1 witnessed robust growth across all geographies. The company witnessed the highest quarterly YoY revenue growth rate. During the quarter, the company said it witnessed strong bookings from both - existing and new customers.

The new orders wins include, providing Digital account opening solution for a privately held bank in the Americas region, providing Lending Origination and Management Solution to a leading diversified business group in Saudi Arabia operating across 7 core sectors. The company also selected for Trade and Supply Chain Finance Solution to a leading financial institution in the UAE market.

Meanwhile, the company has reiterated its guidance of 20 per cent topline growth and EBITDA margin of 20-21 per cent in FY24. ICICI Securities expect traction in its annuity business to provide a strong growth tailwind for a medium to long term.