Shares of Newgen Software fell 5% in Friday’s trade after global brokerage Jefferies downgraded the stock to ‘Underperform’ from ‘Hold’, slashing its target price to ₹835 from ₹965. As of 9:48 AM, the shares were trading 5.04% lower at Rs 973.90.
While the company’s Q1 profit came in ahead of estimates, revenue disappointed, dragged by a sharp fall in licence and implementation sales. Jefferies highlighted rising client caution and weaker deal activity as key concerns clouding Newgen’s growth visibility.
The brokerage expects margins to remain steady near 25%, but flagged limited upside potential amid a sluggish demand environment.
Newgen Software Q1 Results
Newgen Software Technologies reported a weak Q1 FY26, with sequential declines across key metrics, though year-on-year growth remained modest.
Revenue from operations fell 25% QoQ to ₹321 crore, but rose 2% YoY. Total income dropped 21% sequentially to ₹350 crore. EBITDA stood at ₹45 crore, sharply down from ₹137 crore in the previous quarter, with margins contracting to 14.03% from 31.9%.
Profit before tax came in at ₹64 crore, down 55% QoQ, while net profit dropped 54% to ₹50 crore from ₹108 crore in Q4. However, net profit rose 4% YoY.
Total comprehensive income stood at ₹52.74 crore, compared to ₹110.26 crore in Q4 and ₹50.35 crore in Q1 FY25.
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