Reduce Newgen Software Technologies; target of Rs 970: ICICI Securities

ICICI Securities recommended reduce rating on Newgen Software Technologies with a target price of Rs 970 in its research report dated July 18, 2025.

Broker Research

July 18, 2025 / 14:25 IST

reduce

26 Aug, 2025 12:21

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ICICI Securities research report on Newgen Software Technologies

Newgen reported a sharp miss vs I-Sec estimate on revenue, with growth of 1.9% YoY – much lower than company’s aspiration of 20%+ YoY growth. Revenue was impacted by lower large-license deals across its key vertical of banking (-5.2% YoY) and key markets of India (3% YoY) and the Middle East (0.3% YoY). Demand was impacted by macro headwinds in the Middle East and a pull-back in spends retail lending in India. We cut our EPS estimates by 4-5% led by a cut in revenue estimates. We model 7%/17%/15% revenue growth in INR terms in FY26/27/28.

Outlook

We continue to value Newgen at 35x on Q3FY27E to Q2FY28E EPS of INR 28 to arrive at a revised TP of INR 970. Maintain REDUCE. There is downside risk to margin estimates if revenue growth is lower than expected, as investments are front-loaded.

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