Newgen Software locks at 5% upper limit, hits new high on bonus issue plan

Shares of Newgen Software Technologies hit a new high of Rs 1,304.70 as they were locked in the 5-per cent upper circuit on the BSE on Monday at 09:30 AM, after the company announced that its board will meet on November 27 to consider and recommend a proposal for the issue of bonus shares.

Around 19,000 equity shares have changed hands and there are pending buy orders for nearly 30,000 shares on the NSE and BSE, the data shows.

Since April thus far in the financial year 2023-24, the stock of the global provider of digital transformation, platform company, has zoomed 190 per cent. In comparison, the S&P BSE Sensex was down 0.17 per cent at 65,685 at 09:36 AM.

Newgen is the leading provider of a unified digital transformation platform with native process automation, content services, communication management, and AI/ML capabilities.

For the July to September quarter (Q2FY24), the company had reported strong results with the consolidated net profit jumping 59 per cent year-on-year (Y-o-Y) to Rs 47.78 crore. The healthy earnings were driven by strong growth in the banking and financial services segment across geographies.

In Q2FY24, the company's revenue from operations grew 29.7 per cent to Rs 293.23 crore as against Rs 226.11 crore in the year-ago quarter. Reported earnings before interest, taxes, depreciation, and amortisation (Ebitda) rose 59.3 per cent year-on-year to Rs 57.2 crore, while margins improved 290 bps to 19.5 per cent.

Newgen said it added 14 new customers' logos during the quarter. A significant milestone, it said, was achieved with the recent order win worth Rs 68 crore from a leading public sector bank in India for the development and management of their complete Digital Business Platform. This is the largest order in terms of value for Newgen so far, it said.

Meanwhile, in August, ratings agency Crisil Ratings said Newgen's focus on larger customers with bigger deal size, continuous development and innovation in product, and increasing overseas sales in new geographies would lead to further revenue growth over the medium-term.

"The group had diversified geographical reach with a strong presence in more than 74 countries in fiscal 2023. The top 10 customer’s generated revenue of 25-30 per cent for fiscal 2023, and exports accounted for around 70 per cent of the topline. Diversity in geographic reach and clientele should continue to support the business," the rating agency said in its rating rationale.