Newgen Software Technologies Ltd (NSE: NEWGEN), is a leading provider of AI-first digital transformation platforms. Its low-code, cloud-native solutions span Business Process Management, Enterprise Content Management, and Customer Communication Management. The company serves 500 plus global clients across BFSI, insurance, government, and healthcare sectors.
Recent Developments
Deal Wins: Secured a €4.22 Mn contract in Europe (via TCS Belgium) and a ₹21.24 Cr order from Kshema General Insurance for a policy administration system.
Financials (FY25): Revenue ₹1,487 Cr (plus 20% YoY), PAT ₹315 Cr (plus 25% YoY), ROCE 21% vs. industry avg. 12%. Q3 FY24 revenue was ₹381 Cr (plus 18% YoY).
Valuation & Financial Health
Market Cap: ₹12,500 Cr; debt-free with strong cash flows and margins.
Concerns: Stock down around 47% YTD despite robust fundamentals. Premium multiples vs. peers, with moderated growth raising sustainability questions.
Investment Recommendation
The stock has traded within a 52-week range of ₹758–₹1,798, and current price action suggests attractive entry opportunities. Strong support levels are placed at ₹870–880, ₹850–860, and ₹750–770, while key resistance levels lie at ₹920–940, ₹1,000–1,020, and ₹1,100–1,150.
Current price action suggests attractive entry opportunities near supports for investors with a medium-to-long-term horizon.
Investment Thesis
Newgen’s strong order book, expanding global footprint, and AI-first digital transformation leadership position it for sustained growth. The sharp correction from ₹1,798 creates an attractive entry opportunity, supported by a debt-free balance sheet and scalable business model.
Recommendation
It is a BUY on dips in the ₹850–880 range, as the stock offers attractive risk-reward potential. In the medium term (3–6 months), investors can expect returns of around 15–20%, while in the long term (6–12 months), the potential upside increases to 30–40%.
Key Drivers: Robust order momentum, strong financials, and market leadership in digital transformation present compelling value for patient investors willing to accumulate on corrections.
Disclaimer
This analysis is intended solely for educational and informational purposes and does not constitute investment or financial advice. Past performance is not indicative of future results. All information is sourced from public company filings, and third-party sources believed to be reliable. In accordance with SEBI guidelines, market data is presented with a three-month lag and without the Target levels. Investors should conduct independent research, perform due diligence, and consult qualified financial advisors before making any investment decisions. The views expressed are personal and may be subject to errors or bias.
