Why did Newgen Software program’s inventory fall 18%? Know what’s the opinion of brokerage – INA NEWS

Newgen Software program share: Newgen Software program Applied sciences Restricted’s shares noticed an enormous fall of as much as 18 p.c immediately on January 21. This inventory closed at Rs 1305.50, down 16.38 p.c on BSE. In reality, brokerage agency Jefferies has downgraded the inventory after the December quarter outcomes. After this information, heavy promoting was seen within the firm’s shares. With immediately’s fall, the market cap of the corporate has come right down to Rs 18,315 crore. The inventory’s 52-week excessive is Rs 1795.50 and 52-week low is Rs 626.05.

Brokerage Opinion on Newgen Software program

Brokerage agency Jefferies downgraded shares of Newgen Software program Applied sciences to Underperform from its earlier ranking of Purchase. The brokerage has additionally diminished its goal value on the inventory by 21 per cent to ₹1,240 from ₹1,500. Jefferies wrote in its notice that Newgen’s outcomes had been under expectations, however sluggish development in annuity income and Indian enterprise are the primary unfavorable surprises.

Jefferies stated that whereas new license wins stay sturdy for the corporate, longer execution cycles are impacting annuity/implementation income development. Jefferies stated that whereas the corporate continues to carry out properly in buying new licenses, the lengthy execution cycle is negatively impacting annuity and implementation income development.

Newgen Software program’s quarterly outcomes

Newgen Software program reported 5.5 per cent development in its income within the December quarter in comparison with the September quarter, whereas its web revenue elevated by 26.5 per cent through the interval. License gross sales for the quarter grew 70% in comparison with final 12 months as a consequence of whole lot momentum.

“We expect Newgen’s sturdy income development, coupled with its investments in driving development, positions it properly to proceed delivering wholesome margins,” Jefferies wrote in its notice. It has raised its margin projections by 10 to 40 foundation factors between fiscal years 2025-2027, taking into consideration the expansion within the present quarter. It expects a 25 per cent margin vary for Newgen over the following two years.

Nevertheless, the brokerage has reduce its earnings per share (EPS) estimates by 4% to six% for fiscal 12 months 2025 – 2027 protecting in thoughts sluggish income development. He expects Newgen’s EPS to see a CAGR of 23% throughout this era. Of the eight analysts overlaying Newgen Software program, 4 have a “Purchase” ranking on the inventory, whereas two every have a Maintain and a Promote suggestion.

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