Newgen Software zooms 20% on robust September quarter results

Newgen Software | Photo: Wikimedia Commons
Shares of Newgen Software Technologies zoomed 20 per cent to Rs 269, also their 52-week high, on the BSE in intra-day trade on Wednesday after reporting a robust set of July-September quarter (Q2FY21) numbers.

In Q2FY21, the company’s consolidated net profit jumped seven-fold at Rs 29. 2 crore, despite reporting flat operational revenue at Rs 155 crore over the previous year quarter. The IT consulting & software company had profit of Rs 4.2 crore in Q2FY20.

Ebitda (earnings before interest, taxes, depreciation, and amortization) margin improved to 26.5 per cent from 5.9 per cent, due to strong cost rationalisation initiatives undertaken by the company.

The company said it posted a strong performance with demand uptick from its existing customers, along with 17 interesting new logo acquisitions.

The major deals during the quarter include license deal with a premier student loan financing organization in Americas committed to ensuring equal access to financial assistance to pursue tertiary education. The company provided solutions for an international bank in Singapore, with more than 150 years of banking history and solution implementation for a US Bank, it said.

Going forward, the management sees a definite shift towards digital transformation, using low code development and cloud platforms. Newgen’s platform enables rapid application development and offers scalability and agility to an enterprise. This low code market is rapidly growing and is expected to proliferate fast in enterprises in the coming 2-3 years, it said.

At 01:43 pm, the stock was trading 16 per cent higher at Rs 262, against 0.13 per cent decline in the S&P BSE Sensex. The trading volumes on the counter jumped nearly 10-fold with a combined 1.7 million equity shares were changing hands on the NSE and BSE.

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