Newgen Software Technologies Q4 Review - Macro, Recent Run Up In Price Prompt Us To Be Cautious: IDBI Capital

IDBI Capital Report

Newgen Software Technologies Ltd. reported 25% YoY growth in FY23 revenues mainly led by strong growth in India and Europe, the Middle East, and Africa.

Going forward, we have cautiously built in revenue growth of 10% YoY in FY24E mainly due to macro concerns. Further, we have built in net margins of 18% and 19% in FY24E and FY25E.

Hence, we now expect revenue and profit after tax compound annual growth rate of 16% & 21% over FY23-FY25E. This has led to us revising earnings per share estimates upwards by 1% each in FY24E and FY25E.

We believe Newgen is well poised in longer run to gain from higher penetration in mature market, global system integrator partnership, increase client mining, new logo addition and partnering with other software-as-a-system platforms.

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