Hold Newgen Software Technologies: target of Rs 660 : ICICI Securities

ICICI Securities recommended hold rating on Newgen Software Technologies with a target price of Rs 660 in its research report dated January 21, 2026.

Broker Research

January 30, 2026 / 21:07 IST

Hold

ICICI Securities's research report on Newgen Software Technologies

Newgen reported subdued revenue growth of -0.1% QoQ/ 5% YoY in Q3FY26, impacted by lower large license deal wins in key markets of India and EMEA. APAC and US registered better growth of 7.4%/20.8% YoY. Annuity revenue fared better with a strong YoY uptick across AMC, SaaS and support. Among verticals, BFSI and healthcare & insurance led the growth. EBITDA margin held up well at 26.5%, despite wage hikes, aided by AI-led productivity in delivery. AI is leading to longer deal cycles, especially in the Indian market. Management expects continued traction in AMC revenue; it aims to increase AI-led productivity gains. It targets better Q4 on recovery in key markets and license deals.

Outlook

We reduce one-year forward target P/E to 25x-in-line with lifetime average (from 35x earlier) with a Dec’26 TP of INR660, as the company missed its benchmark growth of 20% YoY. Maintain HOLD based on expectations of a recovery in growth in FY27 (13.3%), led by bounce-back in license revenue.

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