A Multibagger in the making - Newgen Software Technologies
Global leader in digital transformation solutions
Newgen Software Technologies is a global leader in digital transformation solutions. The company’s unified platform seamlessly integrates process automation, content services, and communication management, empowering enterprises to design and deploy complex, content-centric, customer-focused business applications in the cloud.
Headquarters and Global Presence
Headquartered in New Delhi, India, Newgen has a robust global footprint, serving regions including the USA, Europe, the Middle East, Africa, and Asia-Pacific. As of 2024, the company employs approximately 3,410 professionals.
Flagship Product: NewgenONE Platform
The NewgenONE platform is a unified low-code solution that enables end-to-end enterprise automation. Key components include:
Intelligent Process Automation: Features business rules management, dynamic case management, and robotic process automation.
Contextual Content Services: Offers multi-channel capture, content management, and records lifecycle management.
Omnichannel Customer Engagement: Provides tools for designing, distributing, and monitoring communications.
Low-Code Application Development: Includes an application studio, data model designer, and user interface designer.
AI and Data Science: Delivers automated data science, data visualization, and a model development studio.
Generative AI: Innovations like Marvin and LumYn enhance automation capabilities.
Industry Solutions
Newgen caters to a diverse range of industries, including banking, insurance, government, healthcare, and shared services. The company’s solutions streamline operations, enhance customer experiences, and drive digital transformation.
Certifications and Standards
Newgen’s commitment to quality and security is evident in its certifications:
ISO 9001:2015
ISO 27001:2022
CMMI 2.0 (Development Level 3)
Financial Performance
Newgen Software has exhibited remarkable financial growth, underscoring its strong market position:
Fiscal Year 2023-2024 Highlights
Revenue: ₹1,244 crore, a 28% YoY increase from ₹974 crore in FY’23.
Profit After Tax (PAT): ₹252 crore, a 42% YoY rise from ₹177 crore in FY’23.
Annuity Revenue: ₹750 crore, covering ATS/AMC, cloud/SaaS, and subscription licenses.
Product Sales: ₹222 crore.
Implementation Services: ₹272 crore.
Quarter 2 FY 2024-2025 Highlights
Revenue: ₹361 crore, a 23% YoY increase from ₹293 crore in Q2 FY’24.
Additional Financial Metrics
Debt: Virtually debt-free.
Profit Growth: Achieved a 19.6% CAGR over five years.
Dividend Payout: Healthy 30.5% payout ratio.
Growth Strategy
Newgen aims to achieve $500 million in revenue within four years, requiring a 35% CAGR. Expansion in the U.S. and European markets is expected to be a key growth driver.
Analyst Projections
Earnings Growth: Average annual growth of 25.5%.
Revenue Growth: Expected CAGR of 23.9%.
EPS: Anticipated annual growth of 25%, with ROE projected to reach 24.6% in three years.
Market and Technical Analysis
As of December 17, 2024, Newgen’s stock exhibits strong technical momentum.
Moving Averages
20-day SMA: Above ₹1,235.15.
50-day SMA: Above ₹1,255.81.
100-day & 200-day SMAs: Sustained above ₹1,186.04 and ₹1,034.18, respectively.
RSI and Volume Trends
RSI: At 70, reflecting strong buying interest but nearing the overbought zone.
Volume: Increased trading volume aligns with bullish trends.
Future Price Targets
Time Horizon Target Range
6 Months ₹1,700–₹1,800
1 Year ₹1,900–₹2,100
3 Years ₹2,500–₹2,800
(The above levels do not intend any recommendations but derived from ChatGPT providing long term chart and the other related data points)
Key Observations
Support Levels: ₹1,263 (50-day SMA), ₹1,259, and ₹1,041 (200-day SMA).
Resistance Levels: Immediate at ₹1,500, with potential for a breakout.
Momentum: Sustained by positive financial fundamentals and industry trends.
Conclusion
Newgen Software Technologies is well-positioned for sustained growth, driven by strong fundamentals, innovative solutions, and a clear expansion strategy. Investors should monitor support and resistance levels alongside technical indicators to make informed decisions. Balancing technical trends with Newgen’s long-term potential ensures prudent investment choices.
Disclaimer: This document is for informational purposes only and does not constitute investment advice. Opinions expressed are personal and may be biased and contain inaccuracies. The levels mentioned are the ChatGPT Data derived providing long term chart and other facts n figures. Author don’t own its correctness or otherwise.